Maximise your Avios, air miles and hotel points

Aer Lingus turns down formal takeover bid from British Airways

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

British Airways’s parent company, International Consolidated Airlines Group SA, announced yesterday that it had made a takeover approach to Aer Lingus.  The board of Aer Lingus rejected the offer.

The idea that Aer Lingus would make an excellent takeover target for BA is hardly new.  To some extent, the surprise is that they chose to move now when it could have been acquired for a fraction of the cost a few years ago.  Aer Lingus has been turned around and is being bullish about its expanding long-haul network with fully flat business class seats on the way in 2015.

The obvious appeal for British Airways is the Aer Lingus landing slots at Heathrow.  You may be surprised to know that Aer Lingus is 3rd largest owner of Heathrow slots at 3% (23 daily pairs).  With recent transactions continuing to value slots at $20m – $30m per pair, Aer Lingus is sitting on a hugely valuable asset.

(Most people have forgetten that, when Ryanair bid for Aer Lingus in 2012, BA announced a side deal with Ryanair to take 85% of the Aer Lingus Heathrow slots if it succeeded.  The bid eventually failed.)

It isn’t that simple, of course.  The Irish Government has a 25.1% shareholding in Aer Lingus.  They are hugely unlikely to agree to any transaction which sees British Airways slash Aer Lingus services into Heathrow.  That said, it would be easy enough for BA to give ‘undertakings’ which it conveniently forgets about a couple of years later.

The other major shareholder in Aer Lingus is Ryanair, with a 29.8% stake.  With Ryanair now blocked from increasing that stake – and at risk of having to sell down to 5% if their Court of Appeal ruling goes against them next year – the company would probably be happy to exit if it meant a decent profit.  Ryanair would, of course, be quietly pleased if British Airways decided to wind down the Aer Lingus operation at Heathrow.

Vueling, the low cost Spanish airline owned by IAG, is an interesting template for Aer Lingus.  When IAG took full control of Vueling last year, they made it clear that it would NOT be merged into (higher cost) Iberia.  Vueling is proving very successful and, with innovations such as wi-fi on its short haul flights, is making its big brother and sister look a little second-rate.

(Of course, British Airways has been quietly taking over the slots that Vueling had at Heathrow and it no longer operates from the airport.)

Aer Lingus may survive in its own right under IAG ownership, although there is far less potential for it than there is with Vueling.  After all, if IAG wants to start a low cost operation in, say, Hungary, it has Vueling for that.  I doubt Aer Lingus will be opening hubs across Europe.

Any takeover would also involve another inquiry into the control of Heathrow landing slots which itself would get tied into the debate over a third runway.

This one seems set to keep me in article material for much of 2015.


How to earn Avios points from UK credit cards

How to earn Avios from UK credit cards (June 2022)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards.

Until 18th July 2022 there is an astonishing special offer on these cards. You get 50,000 Avios on the Avios Plus Mastercard and 10,000 Avios on the free Avios Mastercard. You can apply here. We strongly recommend getting the Avios Plus card whilst this offer is running.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

50,000 Avios for signing up (A CRAZY SPECIAL OFFER!) and an upgrade voucher for spending ….. Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

10,000 Avios for signing up (SPECIAL OFFER) and an upgrade voucher for spending £20,000 Read our full review

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable card perk – the 2-4-1 voucher Read our full review

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.

SPECIAL OFFER: The sign-up bonus on Amex Gold is increased from 20,000 Membership Rewards points to 30,000 Membership Rewards points until 19th July 2022. This card is free for the first year.

American Express Amex Gold

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,000 Avios.

Capital On Tap Business Rewards Visa

10,500 points bonus – the most generous Avios Visa for a limited company Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

Comments (32)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Poincianakings says:

    I think Vueling do still operate from LHR. Palma, Florence, La Crouna and a couple of others IIRC.

    • BA says:

      Vueling do operate from LHR T3. BA proved below the wing services to them, amongst others.

  • Anon says:

    Would love to see Virgin/Delta give it a go, might even bring Little Red back from an early grave.

  • Mr Bridge says:

    its not dead, IAG (willie) was probably testing the water 1ST, and mr walsh does love a bargain.

    what do you think the benefits to (HFP) customers might be in a takeover?

    • Rob says:

      None!

      Aer Lingus reward seats may finally appear on ba.com, but that means the general public will start booking them and it will stop being a secret …..

      The US services would have the full BA surcharge attached – so another £350 per person return – because BA would add them to the transatlantic joint venture operation.

      • Andrew says:

        If a full merger was to happen presumably Aer Lingus’ Gold Circle loyalty scheme would be rolled into Avios as was the case with BMI. Are there any interesting arbitrage opportunites?

        • Rob says:

          It would probably convert to an Avios -earning scheme, I agree. I’m not going to start digging into arbitrages until the news is more concrete though, and you wouldn’t be certain of arbitraging anything until the Gold Circle to Avios conversion rate was published.

  • Froggitt says:

    BA had a low cost airline that competed with BA, albeit from Stanny. They sold it. Why would they want another one?

    • Andrew S says:

      The difference is that IAG is not BA, GO was never universally supported within BA as its culture is and has never been low cost. The creation of the IAG group allows a different set of management to bring about the benefits of scale and allows the individual management teams of the airlines to optimise what they know best.

  • Oh! Matron! says:

    Surely, having more than 50% of the slots already at Heathrow is anticompetitive, and any more of them would be appalling. If Heathrow wants to survive against the likes of Schipol and Frankfurt, it needs to allow itself to become a hub for other airlines, not just for BA

    • Rob says:

      The argument here is that Air France controls more of CDG and Lufty controls more of Frankfurt than BA controls at Heathrow. That ignore the status of Heathrow as a hub, though. You should probably also include in BA’s number flights by other airlines but where BA effectively splits the revenue, eg AA on US routes, JAL on Japan etc.

      • Blackberryaddict says:

        Or KLM/AF at AMS. But don’t forget LH also controls SK, SN, LX and OS flights at FRA, plus all the revenue shares with its Star partners.
        I’d go the other way and say that BA plus partners need to own an even larger share of LHR to be successful.

    • Richie says:

      Iv never seen prices as low as they are now with ba . So to say it’s anti competitive is incorrect. I often have return Europe flights sub £100 , being a gold and getting lounge access, extra bag, avios, etc I think ba is [email protected]@king brilliant. Regularly they have flights to ny and dubai for sub £400 in Eco, and sub £700 in premium. Compare that to flight prices 10 and 20 yeArs ago. (With inflation). So what if it’s anti competitive . I’m all for the more landing slots to ba the better.

  • James W says:

    BA Clubworld sale out of Dub, CPH & BRU.

    • Richie says:

      Cheers for heads up. Not as good as previous but not bad at all

    • Rob says:

      Dublin to Hawaii now Euro 1,395 in the sale! Specific travel dates required but it does price.

      • Richie says:

        I’m up for that , What are the dates rob?

        • Rob says:

          * Buy 28 days in advance
          * Must include a Saturday night
          * Outbound travel must be between 23/12/14-02/01/15, 27/03/15-12/04/15, 01/07/15-31/08/15, 22/11/15-30/11/15

          You should try pricing it on aa.com as well as you may be offered different routings. If doing this for tier points you want to go via New York and LA. If doing this for a cheap holiday, flying direct to LA from London is obviously easier.

  • squills says:

    BA today: they needed to offload a few people and offered us £250 x 5 = £1250 to take the evening flight instead (hanging around for 7 hours).

    Wife said no 😉

    Squills would have said yes but what the hell lol

    She wear de trousers

    • Rob says:

      Had a similar offer in Dubai in Easter 2013 but turned it down (and it was for a lot more than that) as my youngest was too young at the time and we didn’t want an overnight back.

      That said, when I was young I used to specialise in getting myself offloaded from Air Canada flights!

      • squills says:

        Well I reckon I could have bribed our 3 with a lot less than £100 of goodies to keep them happy for a few hours, the wife with £150 – and banked a cool grand!

        • Richie says:

          Next time go to the desk yourself then check the wife in on your phone. 🙂

    • Polly says:

      Yes they were Xmas cards! If that jogs your memory, it was only a couple of days ago! Tnx

  • Oliver says:

    I was surprised to find out that aer lingus held the 3rd largest landing slot at Heathrow and found it quite interesting, so I looked it up and found that they are actually the fourth largest landing slot holder at Heathrow with a 3.5% share, via, http://www.acl-uk.org/UserFiles/File/LHR%20S14%20Start%20of%20Season%20report.pdf

    • richie says:

      V.interesting read

    • Rob says:

      Thanks Oliver. I tried to find these numbers when I wrote the piece but couldn’t, so I just took the number from the other press reports.

      Does the LH number reflect the transition to Germanwings of most of short-haul though? Only LHR-FRA and LHR-MUC will remain LH branded and I doubt there are 250 departures a week to those two. That said, it is a technical point at LH owns Germanwings.

      • richie says:

        thant then asks the question should the numbers for aa and united be added together or even ba iberia and aa

        • Oliver says:

          I would assume that next year aa and United will be added together thanks to their 2015 merger, but Ba, Iberia and aa are partners, not part of one company like Lufthansa and Germanwings so will remain separate.

      • Oliver says:

        Yes you make a good point there that I had not thought of, Lufthansa only flies to/from Heathrow and, Munich, Duaseldorf and Frankfurt whereas Germanwings flies to/from Heathrow and, Berlin, Cologne, Hamburg and Stuttgart. All of the German wings short haul flights will substantially increase the landing slot number so I would assume that you are right.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.