Willie Walsh, chief executive officer of British Airways parent IAG, said he's in no rush to complete a deal to buy Aer Lingus as he negotiates with the Government which is keen to see him meet guarantees.
“We’re very relaxed about it at this stage,” Mr Walsh said in a conference call on Thursday as the company kept its guidance for full-year earnings unchanged.
“We’re not under any pressure, nor are we intending to put any pressure on anybody involved in the process.”
IAG is continuing talks to gain approval from the Government, a 25 per cent shareholder, and according to the Minister for Transport Paschal Donohoe speaking on Wednesday, a decision is likely in the "coming weeks".
The Government rejected an indicative bid earlier this year, saying it couldn't back the €1.36 billion offer unless Mr Walsh guaranteed links between Heathrow and Ireland for more than five years and clarifies employment prospects.
“We do understand that there are some other parties who would like to see it resolved sooner rather than later,” Mr Walsh said.
The executive has told lawmakers that London-based IAG would retain Aer Lingus’s brand and a head office in Dublin after a takeover.
He's also looking to lock in the backing of Ryanair which has a 30 per cent stake in the carrier.
The company’s shares fell 2.5 per cent to 545 pence in London this morning, paring the advance to 12 per cent this year.
Cost Discipline
Europe’s third-largest carrier reported a first-quarter operating profit of €25 million ($27.7 million), compared with a loss of €150 million a year earlier.
It was the company’s first ever profit for the quarter, which is traditionally its weakest.
Sales rose 12 per cent to €4.71 billion, in line with analyst estimates.
Mr Walsh, who is looking to expand trans-Atlantic business with the addition of Aer Lingus, said cost discipline at all three of its airlines - British Airways, Spain's Iberia and discounter Vueling - helped drive productivity and keep expenses down, even as the group increased capacity by 5 per cent.
“There was a strong improvement both at a group level and with all three airlines,” Mr Walsh said, adding that the North American market in particular produced “consistent positive performance.”
Operating profit was €117 million at the BA division, compared with a €5 million loss a year earlier, while Iberia’s loss narrowed to €55 million from €111 million.
IAG’s Barcelona-based discounter Vueling’s losses were little changed at €29 million.
Fleet Plans
Mr Walsh said the decline in the oil price “does nothing to change our view on our fleet or capacity plans. It just makes some of the aircraft that we have planned to retire more efficient in the short term from a cost point of view, but that doesn’t encourage us to retain these aircraft in our fleet beyond their planned retirement date.”
IAG isn’t considering adding more superjumbo Airbus A380s, he said.
The group’s revenue passenger kilometers, or traffic, which also reflects the distance flown, gained 6.2 per cent.
IAG reiterated that its full-year operating profit should exceed €2.2 billion, compared with €1.39 billion in 2014.
-Bloomberg