Irish government last night agreed to sell its 25 per cent in Aer Lingus to British Airways owner International Consolidated Airlines (IAG) after many setbacks.
The Irish airline’s board recommended IAG’s proposed €1.36bn (£961bn) offer in February, but it still needs support from the other main shareholder, Ryanair, which has previously voiced its support for earlier bids.
If the deal completes it will bring Aer Lingus back under the leadership of Willie Walsh, IAG’s chief executive. Walsh was boss at Aer Lingus from 2001 until 2005.
“Acquiring Aer Lingus would add a fourth competitive, cost effective airline to IAG, enabling us to develop our network using Dublin,” Walsh said in a statement.
Aer Lingus rejected IAG’s two previous offers saying that it had “fundamentally undervalued” the business in making its initial offer.
There were also political obstacles amid Irish politicians’ worries over job losses as well as a loss of connections between Irish airports and Heathrow.
“There’s a number of extremely important changes that have led to this decision by government today,” transport minister Paschal Donohoe said yesterday.
He said he did not foresee any redundancies and that another 635 jobs could be created by 2020, and added that the government would spend the €335m it receives on infrastructure projects.