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

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• Mark B says:

  16 Jul16 July 07:30

  Releived that Boston hasn’t got further away 🙂

• Nick says:

  16 Jul16 July 10:45

  Does this mean that the “fuel surcharges” for the Dublin–>Boston flights are going to quadruple? Why? This is exactly the same flight, with exactly the same taxes and using exactly the same fuel, before and after the takeover.

  How were Aer Lingus able to fly this route with taxes and fuel costing only (say) £100? Are BA really so terrible at negotiating fuel prices from suppliers that the cost goes up to (say) £400? If BA really are that crap, it should be Aer Lingus buying IAG and not the other way around. If ever there was an opportunity to attack BA on these fuel charges, this is it. The ludicrous, arbitrary nature of the charge is really made clear when you look at what is happening to the cash element of redemption flights on that route.

  • CP says:

    16 Jul16 July 11:45

    They’re not really fuel charges as such. Well, a portion of them are, but most of the charges are carrier (ie. BA) imposed, and are simply profit-making for the airline.

    • Nick says:

      20 Jul20 July 09:56

      Exactly. And when you see that BA will be charging it for this flight when Aer Lingus did not impose the charge for exactly the same flight, the naked profit-making nature of the surcharge is laid bare.

      BA really should describe it as the “cash element” of a redemption rather than a surcharge, and stop pretending that avios actually get you anywhere. They do not – they simply allow you access to some fixed-price flights.

  • Rob says:

    16 Jul16 July 14:06

    American has no fuel surcharges but BA still adds £300 to an AA redemption transatlantic – and then pockets it.

    • Blackberryaddict says:

      16 Jul16 July 15:36

      How do you know BA pockets it? Since they have a joint venture on the North Atlantic, presumably they share revenues – including revenues from “carrier imposed surcharges”. All this reflects is different markets – ie the UK market accepts these charges, but the US market doesn’t.

      • Rob says:

        16 Jul16 July 17:38

        It isn’t clear how the revenue share on the JV works, especially with regard to Avios seats. However, the ticketing airline keeps the fuel surcharge. That is standard policy AFAIK. It is why American Airlines does not add fuel surcharges to ANY redemptions except those on BA, even when the operating airline itself adds them. If they had to be passed on, AA would obviously have to charge them. Similarly, United in the US does not add fuel surcharges to anyone – book a Lufthansa redemption via United miles and you don’t pay a surcharge. Use Lufthansa miles and you will.

  • Nick M says:

    16 Jul16 July 19:46

    Anyway, it’s about time BA reduced their fuel surcharge… they can’t use the excuse that they hedge fuel for too much longer!

• Brendan says:

  16 Jul16 July 12:29

  Why do you think fuel surcharges will be added? Iberia haven’t added them or have they?

  • RIccati says:

    16 Jul16 July 13:17

    One is an acquisition and another was a merger 😉

  • Rob says:

    16 Jul16 July 14:00

    If you book IB flights via ba.com on Avios, BA adds a fuel surcharge.

    If you book the same IB flight via iberia.com on Avios, there is no fuel surcharge.

• John says:

  16 Jul16 July 13:17

  You continue to sound sceptical about Walsh’s motives for this deal, Rob.

  But if you look at EI’s stats fo the year to June, long-haul passengers (ie transatlantic) were up another 15.6% whilst shorthaul was up just 1.5%

  This is all about turning Dublin (like Madrid) into another Heathrow runway for IAG (in the absence of a real third LHR runway).

  The new transatlantic routes are effectively binding because there are set deadlines for implementation and legal agreements relating to staffing. But regardless, IAG and the pretty good EI management team (who are staying in place) are already planning for next year’s launches.

  It’s a good deal for travellers even if they add fuel surcharges. The problem for IAG is that EI (like Iberia) now has a markedly better business offer than BA. Walsh will have to seriously upgrade Club World to bring BA into line with its sister brands.

  • Anthony Dunn says:

    16 Jul16 July 15:20

    You’re absolutely right: this is Willy Walsh putting his shareholder’s cash where his strategic view (that the UK lacks the cajones to build a new runway in London and the south-east/to have a coherent civil aviation strategy) leads him. That means IAG taking a serious tilt at all of that ex-UK regions traffic via KL/Schipol and attempting to siphon a lot of the westbound/trans-Atlantic traffic through DUB instead. If US immigration pre-clearance works well out of DUB, then this becomes a seriously attractive option.

• Hingeless says:

  16 Jul16 July 13:23

  I find it really amusing that everyone assumes that ba will use short haul slots to turn into long haul. Everyone expected the LBA flights to be temporary and the have now been in operation for 3 years. I think the point is that you can never predict what BA will do as we simply don’t have the research that they do.

  • John says:

    16 Jul16 July 13:36

    Not sure what you mean. IAG will fly customers from UK and Euro regions to Dublin for transatlantic flights. Imagine they intend to use existing LHR-DUB services similarly.

• Londonbus says:

  16 Jul16 July 13:33

  The slot remedies are truly bizarre. GATWICK? Still, I thought FR already fly LGW-DUB.

  • John says:

    16 Jul16 July 13:42

    It’s really odd and the EC decision seems to have surprised everyone.

    You’re right Ryanair does already have limited services from Gatwick (mainly to Ireland) but is keen to expand (to continental destinations),

    Obviously that will increase competition at Gatwick but the EC ruling still seems strange overall.

    • Mark says:

      16 Jul16 July 14:16

      If Ryanair get the slots I would have thought that defeats the object of the slot Remedies as they would presumably be able to use the remedy slots for Irish services whilst repurposing their existing slots for other destinations. Consequently it wouldn’t necessarily result in any additional competition for IAG on the routes to Ireland.

  • Callum says:

    16 Jul16 July 17:38

    Makes perfect sense to me. The number of airlines willing to start a new LGW-DUB route are much more than those that would do LHR-DUB.

• Lochlann says:

  16 Jul16 July 14:51

  In some ways I’m not too surprised by the slots being LGW – it’s only DUB-LHR where EI and BA compete, and with Easyjet, Norwegian and Ryanair at Gatwick (as well as plenty of long haul operators incl. Virgin) you’ve got a better chance of the slots being used successfully (who would credibly come into LHR to operate to DUB, ORK, BFS/BHD etc given Virgin experience with MAN and Scotland?)

• Blackberryaddict says:

  16 Jul16 July 15:16

  After the slots debacle at LHR with Little Red, does anyone seriously believe that another airline would come in and use slots in LHR? Especially now the airline that has actually operated Little Red is being bought IAG. They had no alternative to offer slots at LGW. In fact, I think that is the deal that MOL and WW agreed between them. MOL was at IAG head office recently to hammer the deal out.

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