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IAG acquisition of Aer Lingus gets final EU clearance – with some conditions

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The acquisition of Aer Lingus by IAG, the parent company of British Airways, is now certain to go ahead following the approval of the deal by the European Union.  This follows the announcement last week that Ryanair had agreed to sell its 29% shareholding.

The EU did not roll over entirely, however.

Aer Lingus 350

It has imposed the following conditions on the transactions:

British Airways must give up five slots at Gatwick (yes Gatwick, not Heathrow) which will be ring-fenced for any airline wishing to start London-Dublin or London-Belfast services.  Ryanair has already expressed interest.

Aer Lingus must continue to sell seats to other airlines wishing to use its flights to connect to long-haul services from Heathrow, Gatwick, Manchester, Amsterdam, Shannon and Dublin.  This means, for example, that Aer Lingus cannot refuse to work with Virgin Atlantic to allow Virgin to sell Dublin – Heathrow – Detroit as one ticket.

The full EU press release is here.

IAG has already made its own concessions – to retain the Aer Lingus brand (binding), to retain the core schedule for seven years (binding) and to launch four new long-haul routes (not binding).

Going forward, we can expect – and these are my guesses only – good news and bad news:

Good news:

tier points and full Avios points (as opposed to the current reduced number of Avios points) available on Aer Lingus flights

Aer Lingus redemptions to be available online via ba.com

Gold Circle points to be turned into Avios

ability to effectively earn Avios points on United flights in the US by crediting them to Gold Circle and waiting for the conversion to Avios

Aer Lingus to join oneworld

Bad news:

fuel surcharges to be added to Aer Lingus redemption flights to the US as soon as permission is received for the airline to enter the Iberia / Finnair / BA / AA pricing cartel on transatlantic flights

Aer Lingus redemption seats become harder to find – at present, because you need to ring to book them, few people know they exist

competition from members of other oneworld frequent flyer programmes for Aer Lingus redemption seats

None of this will happen immediately as the deal will take a couple of months to reach legal completion.  Whatever happens, Aer Lingus flights from Dublin to Boston will still be the cheapest way of flying to the US on Avios points.  It remains under 3,000 miles and therefore in the cheaper pricing band.

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Comments (24)

  • Tangey says:

    In terms of EI flights remaining a sweet redemption option post the acquisition, they are a few scenarios that might well remain favourable.

    1) using AA miles to book EI redemptions out of Ireland. This might also include connecting via LHR.

    2) Using avios.com to book EI flights. If avios is consistant with its Iberia policy, then there will be no surcharges.

    3) booking using EI.com. Booking Iberia flights using Iberia.com is often cheaper. I wonder will we end up with EI avios , and being able to combine these ala Iberia.

    A couple of other points.

    Redemptions might well become easier to get as they will be available online, however that might be tempered by the fact that direct BA redemptions will now incur a surcharge, reducing the appeal to many.

    Aer Lingus has an extensive short haul schedule out of Ireland to Europe, currently it is practically impossible to get EI European flights using avios. This entire network should become available using avios. Yes surcharges might/might not apply, but it still opens up an entire new network for avios redemptions.

  • Dean says:

    I’m sure its too early to know what the conversion rate of Aer Lingus Gold Club to Avios might be, but I have a couple of transatlantic EI business flights coming up, any thoughts on whether these should be credited to a new Gold Club account (to convert later) rather than Avios? Thanks.

    • Rob says:

      EI earning rates are generally pitiful so my gut feeling is that Gold Circle would be better, but we don’t know. Small risk it doesn’t come into Avios at all.