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IEA: Aer Lingus takeover could impair cargo

By control on November 7, 2012

Although a Ryanair-Aer Lingus merger has yet to be finalized, the Irish Exporters Association has concerns about the implications for cargo. The government, which is currently reviewing the deal, hasn’t sufficiently considered the importance of Aer Lingus’ airfreight facility to high-tech and life-sciences exporters, according to an IEA press release.

John Whelan, CEO of the IEA, explained that Aer Lingus carries roughly 52 percent of the value of Irish exports to the U.S. and 43 percent of the nation’s imports from the U.S. At risk by the proposed merger, Whelan said, is €18 billion of pharmaceuticals and medical goods that are flown to the U.S. and €4.5 billion of high-tech imports into Ireland.

“The daily airfreight connection to the U.S. has been at the heart of Irish export growth for several decades,” he said in a statement. “Let us not forget this is our largest export market, as well as our main source of foreign direct investment. The daily airfreight link is a strategic trade corridor for Ireland and must be treated as such.”

In the press release, the IEA said that Ryanair doesn’t handle freight across its entire fleet and could halt cargo operations if they purchase majority stake in Air Lingus. Currently, Ryanair owns 29.82 percent of the Irish flag carrier. “This is not a risk that should be taken with any potential buyer of a majority stake in Aer Lingus,” Whelan added.

The IAE also expressed concerns from a monopolistic perspective, stating that the proposed merger could eliminate competition on many Irish routes. Such concerns are also being vetted by the EU Commission, which launched a Phase II review of the Aer Lingus-Ryanair deal this summer. The issue, according to an EU press release, stems from the fact that “on a large number of European routes … the two airlines are each other’s closest competitors.”

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