IAG-Aer Lingus deal cleared for take-off by EU

Merged IAG-Aer Lingus will have to offer for sale five pairs of landing slots at London Gatwick

IAG has  promised the commission it will enter into agreements with IAG’s long-haul rivals to maintain route link-ups with Aer Lingus’s network. Photograph: Aidan Crawley/Bloomberg
IAG has promised the commission it will enter into agreements with IAG’s long-haul rivals to maintain route link-ups with Aer Lingus’s network. Photograph: Aidan Crawley/Bloomberg

The proposed €1.36 billion takeover of Aer Lingus by IAG, the parent company of British Airways and Iberia, has cleared its last major obstacle after the European Commission conditionally approved the deal yesterday evening.

IAG has committed to offering for sale five pairs of landing slots at London Gatwick, specifically for flights to Dublin and Belfast, to get the deal over the line. IAG has also promised the commission it will enter into agreements with IAG’s long-haul rivals to maintain route link-ups with Aer Lingus’s network.

The commission said it had concerns that the original terms of the merger would have lead to “insufficient competition on several routes”, including Dublin-London, Belfast-London and Dublin-Chicago. It said it also feared that IAG might try to prevent Aer Lingus from connecting its flights with those of IAG’s long-haul rivals. Since the deal was first notified to the commission on May 27th, however, IAG returned with specific competition remedy proposals to sway Margrethe Vestager, the competition commissioner, to rubber stamp the merger.

"By obtaining significant concessions . . . the commission has ensured that air passengers will continue to have a choice of airlines at competitive prices," said Ms Vestager.

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Under the terms of the approval, the merged IAG-Aer Lingus will have to offer for sale the five Gatwick slot pairs, although it is understood these will not necessarily be existing Aer Lingus slots. Iberia and British Airways, both owned by IAG, also own Gatwick slots. The commission has stipulated that whoever buys the slots will have to commit to use them for flights to Dublin and Belfast.

Aer Lingus and IAG confirmed to the stock market last night that at least two of the slot pairs must be used for flights to Dublin, while one must be used for Belfast. Aer Lingus shareholders are to vote tomorrow to approve measures designed to facilitate a commitment to the Government that connectivity will be maintained between Dublin and London Heathrow.

Mark Paul

Mark Paul

Mark Paul is London Correspondent for The Irish Times