Walsh offers five-year Heathrow guarantee for Shannon

SHANNON and Cork can have guarantees of Heathrow connectivity for five years if IAG buys the State’s share in Aer Lingus, its CEO Willie Walsh pledged at today’s meeting of the Oireachtas Joint Committee on Transport and Communications.

Clare political figures have expressed concern about the possibility of Shannon losing its vital connectivity to Heathrow in the event of a takeover, but Mr Walsh insisted that the guarantee he is offering is far better than what the airport actually has already. He also claimed that while the concern is at one level understandable, it is actually misplaced, given that the route is profitable.

Indeed, he went so far as to say that the current Aer Lingus management could not match the IAG guarantee without drawing the ire of some of the shareholders.

While he said IAG is happy to give the guarantees and that there is no reason to pull away from what is a profitable route, he stressed that he will not give a commitment beyond five years, saying that no one should offer pledges that services will continue, no matter how the operators are being treated.

While some have claimed that any guarantees given by IAG would not be worth the paper they are written on, Mr Walsh insisted that is not the case and that “smart lawyers” are aware of a mechanism by which it can be done.

Mr Walsh said trade union claims that 1,200 jobs would go following a takeover are “utter nonsense” and based on a flawed comparison between Aer Lingus and Iberia, which IAG took over some years ago.

In response to a query about connectivity between Cork and Shannon and Heathrow from Clare TD Timmy Dooley, Mr Walsh said he could particularly understand the concerns in Clare “because of what happened to the services in 2007” when Aer Lingus transferred the slots to Belfast.

However, he said he believed Aer Lingus had made that decision because it was being charged more than a competitor and he felt that Shannon management had erred. Now, he said, he “would genuinely be very shocked if Shannon-Heathrow and Cork-Heathrow are not profitable”.

He said he would like not just to retain the slots but to build on them, saying that links could be made with other IAG services.

When pressed on giving a specific guarantee on Cork and Shannon’s connectivity he said, “You asked me to give a guarantee in relation to Cork and Shannon. That is something I would be prepared to do”, before adding there is no reason not to operate on the routes.

He was adamant that such a guarantee is something that the Government cannot guarantee at the moment and that it could not stop the slots being moved away from the two airports. “There’s nothing that the Irish Government can do today to stop that happening other than criticising the Aer Lingus management team and everyone here jumping up and down.”

He said IAG is the only operator who would make any such offer because it benefits from the feed traffic in London, adding that the Shannon concern is “completely misplaced”.

When quizzed about why he would only guarantee the Heathrow route for five years, he said he feels that five years is quite a long time and that the decision to offer it was only made after “significant internal debate”. He also said that giving long-term guarantees to continue routes without any assurances in the other direction about quality of service would not make sense.

Mr Walsh also said he expected that people would see IAG’s commitment to the service over the five-year period, while he said Aer Lingus management “couldn’t offer it today because other shareholders would ask why are you doing that”.

When further pressed on extending the five-year guarantee to 10 or 15 years, he absolutely ruled it out. “If the proposal is rejected, I may remove it or reduce it but I’m not prepared to increase it.”

Regarding trade union claims that 1,200 jobs could go if the takeover goes ahead, he said the claim is based on a comparison with what happened when Iberia was taken over by IAG. However, he said Iberia had been “an inefficient airline that got trapped in a very serious recession” while Aer Lingus is in much better health.

 

Owen Ryan