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Etihad keen to buy Aer Lingus stake

Abu Dhabi-based airline is interested in buying Aer Lingus stake from Ryanair

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‘Eihad has also had talks about buying the Irish government’s 25 per cent stake in Aer Lingus as it invests in overseas airline tohelp bolster traffic through its Abu Dhabi hub.
Gulf News

Sydney: Etihad Airways PJSC said it would be interested in buying Ryanair Holdings Plc.’s 30 per cent stake in Aer Lingus Group Plc. as the budget airline struggles to take over the Irish flag carrier.

Etihad, which already owns 3 per cent of Aer Lingus, would be “very happy to have that discussion,” Chief Executive Officer James Hogan said by phone from Brisbane, Australia on Thursday. “Dublin is a strong, profitable route for us and we’re very keen to strengthen our partnership there.”

The carrier has also had talks about buying the Irish government’s 25 per cent stake in Aer Lingus as it invests in overseas airline to help bolster traffic through its Abu Dhabi hub. Ryanair’s bid for Aer Lingus has drawn opposition from management and sparked a review by European Union regulators who blocked a similar takeover in 2006.

Etihad has already invested in Air Berlin Plc, Virgin Australia Holdings Ltd. and Air Seychelles Ltd., as well as striking 36 codeshare agreements, to assemble a global network. Talks on a codeshare deal with Air France-KLM are under way, Hogan said. An equity investment isn’t being considered.

The Middle East company has few other carriers it’s interested in buying into as it has ruled out “mega-carriers” and airlines based in North of South America, Hogan said.

“There aren’t many other opportunities,” he said. He didn’t elaborate on potential targets. Non-European investors can’t hold majority stakes in EU carriers because of global aviation agreements.

EU veto

Ryanair offered to buy out other Aer Lingus shareholders in a deal valuing the carrier at €694 million ($852 million). Aer Lingus has opposed the deal, saying the EU will probably veto it on competition grounds.

UK regulators are separately investigating Ryanair’s existing Aer Lingus stake and its impact on the travel market. A tribunal rejected Ryanair’s attempt to block this investigation August 8.

Aer Lingus closed on Wednesday at €1.07 in Dublin trading, 18 per cent below the €1.30 Ryanair has offered. It hasn’t closed above €1.09 since the bid was announced in June.

Hogan separately said that a potential tie-up between Etihad’s neighbour Emirates and Qantas Airways Ltd. on Australia- Europe routes would be a boon for the Middle East aviation sector. Dubai-based Emirates, the world’s largest carrier by international passenger traffic, may reach a deal with Qantas within six months, Chairman Shaikh Ahmad Bin Saeed Al Maktoum, said on August 2.

Gulf connection

“It’s great for the Gulf carriers the more people that fly through the Gulf,” Hogan said. Etihad has a similar cooperation agreement with Virgin Australia on the so-called Kangaroo route.

Etihad said in an e-mailed statement on Thursday it would add new flights to Brisbane from next February, bringing total flights between Australia and Abu Dhabi by the two carriers to 28 per week.

Etihad has also guarded against an increase in fuel prices by hedging 80 per cent of its requirement for the year, Hogan said. Jet fuel prices have risen 23 per cent in Singapore trading since hitting a low for the year on June 22.