IMPACT urges Government to refer Ryanair’s Aer Lingus bid to competition authorities

IMPACT has today (Wednesday) written to Transport Minister Leo Varadkar to urge the Government to refer a Ryanair bid for control of Aer Lingus to the Irish and EU regulatory authorities. The union, which represents over 1,600 staff in Aer Lingus, argues that any takeover would be uncompetitive as it would create a virtual monopoly in commercial flights between Ireland and the UK, with inevitable ticket price increases. The union also says a Ryanair takeover could jeopardise inward investment, and Ireland’s economic recovery, by placing doubt over the future use of Aer Lingus’s valuable Heathrow slots, which are currently used exclusively for Irish-UK traffic. The full text of the letter is copied below.

20th June 2012

Leo Varadkar TD

Minister for Transport, Tourism and Sport

Dear Minister

Future ownership of Aer Lingus

IMPACT represents 1,600 Aer Lingus pilots and cabin crew members and a number of pilots in Ryanair. The union has another 60,000 members who work in the public, private and community sectors and has been vocal in debates about Ireland’s economic recovery in recent years. I am writing to express IMPACT’s concerns about a potential Ryanair takeover of Aer Lingus which, we believe, would be bad for Ireland’s economic recovery, competition, and the travelling public.

The EU competition landscape has not changed since Ryanair’s previous bid for control of Aer Lingus. Indeed, it is less than a month since the UK Fair Trading Office declared its intention to undertake a formal investigation of Ryanair’s existing 29.8% stake in the company. We believe that a Ryanair bid should be referred to the Irish and EU competition authorities, and that they should and would rule that a Ryanair takeover of Aer Lingus would be uncompetitive as it would leave a single airline effectively in control of commercial flights into and out of Ireland and the UK. Such an outcome would be bad for Irish consumers and businesses as it would and inevitable lead to price hikes and route closures.

Furthermore, it is vital to the Irish economy that all gateways into Ireland remain open to maintain inward investment to create and sustain jobs and economic activity. Ryanair control of Aer Lingus would put this at risk for a number of reasons. First, Ryanair has a history of closing routes and bases when it disagrees with decisions of local airports or regulators. Secondly, Aer Lingus currently uses 100% of its valuable Heathrow slots for Irish-UK routes. The Heathrow slots are a proven factor in attracting inward investment into Ireland. Following a takeover, and with over 50 bases across 18 countries, Ryanair could be expected to use them to grow their business in other jurisdictions, or even to sell them to recoup the costs of buying Aer Lingus.

In reaching a decision over the future ownership of Aer Lingus, IMPACT believes that the Irish Government must give full weight the competition issues and the potential impact of any proposed takeover on to the Irish economy and the Irish traveling public.

I would welcome the opportunity to discuss these issues with you.

Yours sincerely,

Matt Staunton National Secretary