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IATA: Virgin Atlantic sees need for IAG-Aer Lingus remedies

The chief executive of Virgin Atlantic Airways sees a need for competitive remedies in the UK-Ireland market if International Airlines Group’s (IAG) acquisition of a stake in Aer Lingus moves forward.

“We certainly expect that the transaction will ultimately reach conclusion but we’d certainly like to see a hard look at what remedies might be appropriate to allow competitive connectivity to Ireland to continue to exist,” says Craig Kreeger during a media briefing at the IATA Annual General Meeting in Miami.

The Irish government accepted IAG’s offer of €1.4 billion ($1.58 billion) for a 25.1% stake in Aer Lingus at the end of May. The deal has been approved by the Irish legislature but still needs the approval of 90% of Aer Lingus’ shareholders and of European competition authorities.

Asked what kind of remedies should be required for the deal, Kreeger says a special prorate deal that ensures competitive pricing in markets like London-Dublin is one possible option.

“We just like to see customers have competitive alternatives and we’d like to be part of that,” he adds.

The IAG-Aer Lingus deal could also see Virgin Atlantic lose its feed to Ireland. While not a full-fledged codeshare partnership, Kreeger says that the two carriers connect over London Heathrow with Virgin carrying some of Aer Lingus passengers on its flights from the airport.

“We’re certainly hoping through the process… that the government concludes that it might make some sense to have some form of remedy that creates continued connectivity between our network and Aer Lingus’ [network],” he says

Aer Lingus and IAG-subsidiary British Airways are the only two airlines flying between Heathrow and Ireland, Innovata schedules show. Ryanair also flies to Ireland from London Gatwick, London Stansted and London Luton airports.

The European Commission has begun a preliminary investigation into the proposed IAG-Aer Lingus deal and will release a provisional decision by 1 July, ahead of the Aer Lingus shareholders meeting.

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