What is the status of the integration of Aer Lingus into IAG?

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International Airlines Group - Aer Lingus, BA, Iberia, Vueling
International Airlines Group – Aer Lingus, BA, Iberia, Vueling

More than a year has passed since International Airlines Group (“IAG”) acquired Aer Lingus and it joined British Airways, Iberia and Vueling under the umbrella of IAG.

The merger is of particular interest particularly because of both the proximity of Dublin to London Heathrow and the fact that Dublin airport offers US Customs & Immigration pre-clearance.

Whilst much has been done to align Aer Lingus to their IAG siblings, there is still a lot to be done, with many announcements yet to be made.

Here’s a quick run through of what has and hasn’t happened, with some added speculation on our part.
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Aer Lingus & BA now codesharing on transatlantic routes

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Aer Lingus and British Airways continue to extend co-operation with each other under the umbrella of their parent company International Airlines Group.

The two airlines are now codesharing on each other’s transatlantic flights between London, Dublin, Shannon and the USA.

This means that Aer Lingus flights from Shannon to Boston and New York JFK and from Dublin to Boston, New York JFK, Washington Dulles, Chicago O’Hare, Orlando and San Francisco can be booked under a BA flight number on ba.com

Codeshares can be booked whether connecting from London or starting your journey in Dublin or Shannon.

The main benefit of this arrangement is that members of the British Airways Executive Club can earn Avios points and Executuve Club tier points in the same manner as a British Airways flight.

All passengers also benefit from US Customs & Immigration pre-clearance in Dublin and Shannon and connections are available from London Gatwick for those who would prefer to avoid London Heathrow.

Similarly, the Aer Lingus code has been placed on all BA transatlantic flights from London Heathrow and Gatwick, giving Aer Lingus passengers access to a more extensive route network.

It’s also worth noting that codesharing does not apply to BA routes to Canada and Central & South America.

Furthermore, a date has not yet been set for Aer Lingus to join the transatlantic joint-venture with American Airlines which is subject to commercial negotiation and regulatory approval. 

Nor has a date been set for Aer Lingus to rejoin the Oneworld alliance.

BA, Aer Lingus, Iberia and Vueling to roll-out in flight WiFi

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International Airlines Group - Aer Lingus, BA, Iberia, Vueling
International Airlines Group – Aer Lingus, BA, Iberia, Vueling

International Airlines Group has today confirmed that WiFi will be rolled out across the short-haul and long-haul aircraft of its airlines: Aer Lingus, British Airways, Iberia and Vueling.

To date, IAG airlines have adopted a piecemeal approach to WiFi. BA has WiFi on just one Boeing 747. Aer Lingus has WiFi on its transatlantic Airbus A330s. Iberia and Vueling also have WiFi on some aircraft.

On short-haul aircraft IAG is expected to adopt an Inmarsat “Air To Ground” system which should deliver fast internet access speeds. The first aircraft will be in service by 2017.

On long-haul aircraft, new deliveries of Airbus A330 (to Aer Lingus & Iberia), Airbus A350 (to British Airways and Iberia) and Boeing 787-10 (to British Airways) are expected to be fitted with WiFi.

IAG will also aim to retrofit 100 long-haul aircraft (primarily British Airways aircraft) with WiFi. IAG will target rolling out WiFi to 90% of long-haul aircraft by 2019.

The fit-out of WiFi on long-haul aircraft is likely to be subject to IAG being satisfied that the technology is sufficiently robust for the global long-haul networks of BA and Iberia and the cost of retrofitting aircraft makes the investment worthwhile

IAG has not yet indicated what pricing model it will adopt for WiFi, which is likely to vary by airline.

As well as providing passengers with in flight internet access and the opportunity for new In Flight Entertainment services, it will be interesting to see what customer service initiatives will arise as consequence of equipping cabin crews will in flight internet access.

Image courtesy of International Airlines Group
Image courtesy of International Airlines Group
Image courtesy of International Airlines Group
Image courtesy of International Airlines Group

Aer Lingus returns to Los Angeles & Newark, launches Hartford

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As was widely tipped online, Aer Lingus has today announced it is to return to Los Angeles and Newark airports next year, and launch a new direct route from Dublin to Bradley International Airport in Hartford County, Connecticut. The latter route will be the sole transatlantic route from the airport.

Aer Lingus will fly five times a week to Los Angeles from Sunday 1 May 2016, and daily to Newark from Thursday 1 September 2016. Both routes will be operated by A330 aircraft. Flights for these routes are on sale now at AerLingus.com

Aer Lingus will also fly daily to Bradley International Airport from September 2016 and flights for this route are expected to go on sale 3 November. This route will be operated by a Boeing 757 aircraft.
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Aer Lingus to launch a new short-haul premium product “Aer Space”

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Aer Lingus London Heathrow
Aer Lingus London Heathrow (Image Credit: Heathrow)

Aer Lingus confirmed during the announcement of its half year results yesterday, Wednesday 29 July 2015, that it is to effectively re-introduce business class on selected short-haul routes, in the fourth quarter of this year.

The new “Aer Space” product will offer full ticket flexibility, lounge access, priority boarding and luggage handling and complimentary food & drink (we don’t know if this includes hot food or alcoholic drinks).

The seat itself will be the same as economy but the middle seat will be kept free.  

There will also be no cabin divider between economy and “Aer Space” (this is so it doesn’t constitute a separate cabin for Air Passenger Duty purposes).

It is very similar to the “Excellence Fare” offered by Vueling and Germanwing’s “Best Fare”.

The routes on which it will be launched have yet to be announced but we expect that London Heathrow – Dublin will be one of the first.

We assume that passengers connecting to/from business class long-haul flights on Aer Lingus and its future IAG/Oneworld partners will be seated in the “Aer Space” seats.

Update:

This product has not, as of April 2018, not been implemented and seems to have been postponed indefinitely.

  

IAG’s bid for Aer Lingus looks certain to go ahead. What do we know now?

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Aer Lingus Airbus A320
Aer Lingus Airbus A320 (By BriYYZ via Wikimedia Commons)

Following the news that the Irish Government has given its support for International Airlines Group’s bid for Aer Lingus and that Ryanair (which holds 30% of the shares in the airline) has also agreed to sell its stake, this means that, barring any last minute complications, it is now a near certainty that the bid will go ahead.

Full details of the bid can be viewed in the offer document. A more easily digestable summary of IAG’s bid for Aer Lingus can be viewed in this IAG presentation.

Here’s a summary of what we know (and don’t know) and what we expect to happen when Aer Lingus joins IAG:
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Irish Government approves sale of Aer Lingus to IAG – What we know

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Aer Lingus Airbus A320
Aer Lingus Airbus A320 (By BriYYZ via Wikimedia Commons)

The Irish Government has today announced its support for International Airlines Group’s bid for Aer Lingus.

Full details of the bid can be viewed in the offer document. A more easily digestable summary of IAG’s bid for Aer Lingus can be viewed in this IAG presentation.

The deal is also far from done yet as Ryanair (which holds 30% of the shares in Aer Lingus) has yet to show its hand. The transaction will also be subject to regulatory approval.

Here’s a summary of what we know (and don’t know) so far
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IAG outlines plans for Aer Lingus to assuage Government concerns

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Since Aer Lingus formally recommended a takeover bid from International Airlines Group (“IAG”) there has been a growing political storm in Ireland amid doubts as to what IAG’s ultimate intentions are for Aer Lingus, specifically with regard to links between the Republic Of Ireland and London Heathrow.

IAG has sought to assuage these concerns by today releasing a statement providing assurances as to connectivity between London Heathrow and Ireland.

Here’s a précis of these assurances.
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IAG makes a further takeover bid for Aer Lingus

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Aer Lingus Airbus A320
Aer Lingus Airbus A320 (By BriYYZ via Wikimedia Commons)

After much press speculation over the past few weeks, International Airlines Group (parent company of British Airways, Iberia and Vueling) has submitted a further takeover bid for Aer Lingus.

Aer Lingus has formally acknowledged the bid, valued at €2.50 a share with a cash dividend of €0.05 per share.

Aer Lingus say the bid remains conditional on, amongst other things, confirmatory due diligence, the recommendation of the Board of Aer Lingus and the receipt of irrevocable commitments from Ryanair and the Minister for Finance of Ireland to accept the offer.

The key stumbling block to IAG acquiring Aer Lingus will be the Irish Government which holds a 25.1% stake in the airline. The Irish Government will need to be satisfied that links between London Heathrow and Ireland will be maintained and Aer Lingus will not loose its Heathrow slot-holdings.

Here are some thoughts we gathered before Christmas on what may happen of IAG is successful in acquiring Aer Lingus.

Update: Ireland’s RTE is reporting that Aer Lingus may make a statement on Tuesday about the bid.

Update:

Aer Lingus has issued a statement on Tuesday recommending the bid. International Airlines Group has also statement confirming that if the acquisition goes ahead Aer Lingus will maintain its own brand and join the Oneworld alliance and transatlantic joint-venture with BA and American Airlines. IAG will also seek to assuage concerns about the maintenance of links between London Heathrow and Cork and Shannon by entering into discussions with the Irish Government.

What would IAG gain from buying Aer Lingus?

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Aer Lingus London Heathrow
Aer Lingus London Heathrow (Image Credit: Heathrow)

When International Airlines Group (“IAG”) was formed a little under four years ago from the merger of British Airways and Iberia, it stated an ambition to acquire up to 12 additional airlines.

So far it has acquired two. These are bmi and Vueling. bmi has been integrated into British Airways (bmibaby was closed and bmi regional was sold). Vueling continues to operate on a standalone basis.

Today we learned of an approach by IAG to Aer Lingus. IAG confirmed in a statement to the Stock Exchange that it submitted a proposal to make an offer for Aer Lingus, which has been rejected by the Board of Aer Lingus.

Aer Lingus also formally acknowledged the approach, stating that the initial approach was preliminary, highly conditional and non-binding. Furthermore, in their view it under-valued the company.

What would IAG gain from buying Aer Lingus and why is it bidding now?

Aer Lingus is the fourth largest airline at London Heathrow with 3.1% of the airport’s departure and arrival slots. Acquiring Aer Lingus would give IAG member airlines nearly 56% of departure and arrival slots.

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