British Airways May Acquire Heathrow Slots from Aer Lingus

British Airways, the UK-based premier airline, may win around 20 slots at London Heathrow Airport if Ryanair, the Ireland-based low cost airline, acquires the Ireland based carrier, Aer Lingus.

The parent company of British Airways, International Airlines Group (IAG), has entered into an agreement with Ryanair. According to the agreement, Ryanair will be giving away 20 out of 24 Aer Lingus slots at London Heathrow Airport if it manages to acquire the Irish airline.

A statement by IAG said, ‘We have signed a non-binding memorandum of understanding with Ryanair which is subject to EC approval and IAG board approval.’

Ryanair had earlier offered €694 million for Aer Lingus, which was subsequently rejected by Aer Lingus’ board as too low a price. The airline is now willing to offer around 40 routes from major airports in Ireland to other airlines in return for the acquisition.

The airline has stated, ‘This comprehensive remedies package includes a number of new airline bases in Dublin, new entrant competitors on over 40 routes to/from Dublin, Cork and Shannon, as well as specific competition solutions that guarantee increased price competition on routes to and from Ireland.

Ryanair expects that the commission will shortly market test this transformational remedies package, and remains confident that its offer for Aer Lingus will receive competition clearance following any fair assessment by the commission.’

The airline’s acquisition bid is currently being considered by the European Commission, which is expected to come to a decision by January 2013.

IAG, the parent company of British Airways and Iberia, had earlier has offered to acquire a 100% stake in Vueling, the Spain based low cost carrier.

Welcoming the move, Ryanair’s Stephen McNamara said, ‘The merger of IAG Iberia and Vueling is another logical merger of EU airlines operating in the same market and mirrors IAG/British Airways takeover of BMI in the UK earlier this year, Aegean’s offer for Olympic in Greece and Ryanair’s current offer for Aer Lingus in Ireland.

As Europe’s flag carrier airlines continue to consolidate Ryanair believes that its offer for Aer Lingus should be approved by the EU Competition Authorities if they follow – fairly – the precedent set in the BA/BMI merger and last week’s takeover of Vueling in Spain by BA/IAG. These are all inevitable steps in the consolidation process of Europe’s high fares former flag carrier airlines.’