Ryanair 'planning' sale of Aer Lingus slots

Aer Lingus could lose all but four of its landing slots at London's Heathrow Airport under a proposal being put together by Ryanair as part of its ongoing attempts to take full control of the airline.

Ryanair has offered to sell 20 of Aer Lingus's 24 landing slots at the UK's busiest airport to British Airways as part of an agreement aimed at allaying the European Commission's concerns over competition if it gives the airline the go ahead to take over Aer Lingus.

Ryanair, which owns 29.8 percent of Aer Lingus, renewed its €700m takeover bid in June, five years after the Commission blocked its first attempt.

Its latest bid is more extensive than when the merger was first blocked in 2007, according to the EU competition authority and it faces an uphill battle to win regulatory approval. In a "statement of objections released last month the competition authority said the merged carrier would hold a more dominant position than five years ago and would have an effective stranglehold on over 40 routes.

A determination to change that landscape to allow the takeover proceed has prompted Ryanair to seek deals with both British Airways and the smaller carrier Flybe. The dramatic overhaul of routes between Ireland an Britain would see as many as six British Airways planes and four from Flybe, based in the Republic.

If it is given the green light by the Commission, the BA deal would maintain competition on three routes from Ireland into Heathrow at current levels. The proposed deal between Ryanair and International Airlines Group (IAG), the parent company of British Airways, would see British Airways take over Aer Lingus services from Cork, Shannon and Dublin and run them as normal for a period of between three and five years.

With British Airways operating 20 flights into Heathrow from Irish airports on a daily basis, Ryanair would then be in a position to argue that that a merged Ryanair/Aer Lingus was no longer the dominant carrier on those routes.

A separate part of the same takeover process being planned would see the smaller carrier Flybe operate flights to and from Ireland on 20 other routes where Ryanair and Aer Lingus currently both have services for at least three years. This move would remove the monopoly any merged Ryanair-Aer Lingus operation would have an those routs. .

While the deals would keep services at present levels for now, industry sources have cautioned, that British Airways could eventually use some of the Heathrow slots to expand its long-haul services and reduce the number of flights to and from Irish airports.

"We have signed a non-binding memorandum of understanding with Ryanair which is subject to EC approval, as part of its review of Ryanair's proposed takeover of Aer Lingus, and IAG board approval," IAG said in a statement.

Ryanair told The Irish Times today that it was not commenting on the plans as "the process is ongoing".

Source:   http://www.irishtimes.com

http://www.ryanair.com

http://www.aerlingus.com