INTERNATIONAL Airlines Group (IAG) is poised to take over Aer Lingus after the Irish Government gave the go-ahead last night to the £1.03 billion bid.
Minister for Transport, Tourism and Sport Paschal Donohoe announced that a decision had been made to potentially dispose of the state’s 25.1 per cent minority shareholding in Aer Lingus.
The Dáil is now set to debate the terms of the deal today, with a vote due tomorrow.
Services to and from Britain as well as connectivity stateside and the guarantee of new jobs in Ireland all formed part of the deal between the Irish Government and IAG, the owners of British Airways.
Ireland's opposition parties Fianna Fáil, Sinn Féin and the Socialist Party have argued against a takeover.
But yesterday Transport Minister Paschal Donohoe said: "We have very carefully considered all of the issues involved and have concluded that supporting IAG’s offer is in the best interests of the airline, its employees, the travelling public, job creation and the economy overall given the vital role that air access plays in our economy as an island nation."
He added: "The Government has secured important guarantees in respect of Ireland’s future connectivity, particularly to London Heathrow, and on the maintenance of Aer Lingus’ iconic brand and of its head office in Ireland."
The Government listed a number of factors that led to their decision to support IAG's offer, including assurances with regards to jobs and access to the valuable Heathrow Airport slot.
"IAG has confirmed that the existing employment rights of the employees of Aer Lingus will be fully safeguarded," the Government said.
It added that by the end of 2016 150 new jobs will be created, growing to 635 by 2020.
The Government confimred that Aer Lingus will continue to operate its daily flights between London Heathrow and Dublin, Cork and Shannon for at least seven years following the take over.
Aer Lingus' head office will also stay in Ireland, according to the agreement.
Dublin-born IAG chief executive Willie Walsh says Ireland will benefit from the deal.
He said: "Aer Lingus would maintain control of its brand and operation while gaining strength as part of a profitable and sustainable airline group in an industry that's consolidating.
"Ireland's vital air links to Europe and North America would be enhanced, creating new jobs, with cast-iron guarantees on ownership of Aer Lingus' Heathrow slots and their use on flights to Dublin, Cork and Shannon."
By 2020 IAG believes that, alongside Aer Lingus, it could deliver up to 2.4 million more passengers and four new stateside destinations from Ireland, with the possibility of adding two of these new transatlantic services in summer 2016.
The agreement also includes plans to grow services at Cork and Shannon airport and maintain the London Gatwick to Knock Airport service.
The deal now relies on Ryanair selling its 29.8 per cent stake in Aer Lingus to IAG.
A spokesperson for Michale O'Leary's airline said: "The board of Ryanair has yet to receive any offer, and will consider any offer on its merits, if and when an offer is made."
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