Heathrow slots threat with proposed Ryanair takeover

THE Government this week announced it won’t sell the State’s 25% share in Aer Lingus to Ryanair, something that has been welcomed by Clare County Councillor Sean McLoughlin. He feels a Ryanair takeover would see Shannon lose its Heathrow connectivity for the second time since 2007.
In a statement on Tuesday, Transport Minister Leo Varadkar said the Government won’t sell to Ryanair. “The Government remains committed to the sale of the stake in Aer Lingus at the right time under the right conditions. However, the Government is not prepared to support any offer that would significantly undermine connectivity or competitiveness for Ireland.  “Based on what is now in the public domain, the Ryanair remedies package does not satisfy our concerns about connectivity, competitiveness or employment for Ireland. Obviously, the European Commission will make its own decision in its own time but we do not see any benefit to Ireland in what has been reported.”
However, Ryanair said its bid to take over Aer Lingus wasn’t derailed. “Since the Government owns just 25% of Aer Lingus, it has no power to block Ryanair’s offer, which can still be successfully completed if we acquire a shareholding of 50% or more. Ryanair currently owns 30%.
“The progress of Ryanair’s offer is subject to the outcome of the current EU competition review and Ryanair is continuing to progress that approval process, having submitted an unprecedented remedies package which will increase competition, choice, traffic and jobs to and from the island of Ireland.”
Reports this week said as part of a proposal to persuade the European Commission to allow the takeover, Ryanair is offering to sell 20 of Aer Lingus’ 24 Heathrow slots to British Airways.
Councillor McLoughlin said he isn’t surprised at this and that Shannon will lose out if the takeover does eventually go through. “Heathrow slots are very valuable, you can only buy them through the ‘Grandfather’ system, so that if you have slots you have first pick on them. Most airlines want to fly through Heathrow and some of them who want to increase their business would have to pay very dearly for them. Ryanair only fly into airports that aren’t in the centre of cities, airports that are miles away from cities, really. That’s the first thing Michael O’Leary would sell and he’d be hoping to make a huge chunk of money back by selling the slots. If Ryanair takes over Aer Lingus, Shannon will definitely lose its Heathrow slots. When we lost the slots before we lost a huge amount of traffic. Business people use Heathrow as a connecting airport as well as everyone else. It is a huge hub and this is something we fought for.”
When Aer Lingus was being privatised, Councillor McLoughlin put forward a proposal that some Heathrow slots be ringfenced for Shannon, due to their strategic importance. However, this wasn’t done and in 2007 Aer Lingus opted to take four Heathrow routes from Shannon and base them in Belfast, dealing a huge blow to Shannon’s connectivity.
While three Heathrow slots have since been restored, the episode showed the importance of Heathrow links to business and tourism interests in the Mid-West.