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IAG set to take over Aer Lingus

IAG's plan to buy Aer Lingus and build a new transatlantic hub at Dublin airport depended on agreement from Ryanair, which holds a 30 per cent stake in Aer Lingus, and the Irish government, which agreed to sell its 25 per cent stake in May.

Dublin/Brussels - IAG is set to complete its takeover of Aer Lingus after Ryanair said it would accept the offer and a source familiar with the matter told Reuters the British Airways-owner would gain conditional EU approval.
IAG's plan to buy Aer Lingus and build a new transatlantic hub at Dublin airport depended on agreement from Ryanair, which holds a 30 per cent stake in Aer Lingus, and the Irish government, which agreed to sell its 25 per cent stake in May.
It is set to clear the final hurdle and gain European Union antitrust approval for the ?1.3 billion ($1.5 billion) bid after improving concessions to ease competition worries, a person familiar with the matter said on Friday.
The concessions were made ahead of a July 15 deadline and include giving up some airport slots in London and special agreements with rivals, the source said. A spokesman for the European Commission declined to comment.
Shares in the three airlines extended earlier gains on news of the pending EU approval.
IAG climbed 2.6 per cent to 528 pence, one of the top risers on Britain's bluechip index. Shares in Ryanair were 2.3 per cent higher. Aer Lingus's were up 2.1 per cent.
Adding Aer Lingus to its portfolio of airlines - British Airways (BA), Iberia and Spanish budget carrier Vueling - opens a new avenue of growth for IAG, allowing it to expand capacity on lucrative transatlantic routes by using Dublin Airport.
IAG's biggest unit BA cannot do that at its main hub, London's Heathrow, because the airport is full.
"More developments targeting North America are a key strategic objective of IAG and this is where Aer Lingus's acquisition is important," said Euromonitor airline analyst Nadejda Popova.
She added the deal was expected to boost IAG's presence in the value end of the market thanks to Aer Lingus's hybrid position between low cost and traditional airlines.
IAG chief Willie Walsh has led the charge to consolidate Europe's fragmented airline industry, combining BA and Iberia in 2011, and then in 2013 adding Vueling to give it exposure to fast-growing budget travel in Europe's short-haul market.
It has said there could be more deals to come. The top five airlines in Europe have a market share of 43 per cent in the region, compared with a 92 per cent share for the top five US airlines in their home market, German airline Lufthansa said last month.