IAG and Aer Lingus – all about the slots?
It seems that the possibilities of an IAG acquisition of Aer Lingus are increasing as the Irish carrier considers the latest offer of €2.55 a share, valuing the business at about €1.36 billion. Using our schedules and traffic analytics tools we’ve taken a quick glance at what the offer means and the top level elements of any such agreement.
While it’s clearly not all about slots at London Heathrow that is certainly a major part of the logic for IAG from what we can see. Aer Lingus are currently the third largest airline at Heathrow in terms of slots with a 3.3% share of the available pool. Any acquisition would give IAG - or perhaps in this case more appropriately, British Airways - around a 54% share of monthly frequency from the airport; some ten times more share than their nearest competitor, Virgin Atlantic. With no planned capacity increases at Heathrow for sometime, securing a further 3% share of movements for IAG at the proposed price would seem to represent a very smart strategic investment as well as commercial opportunity.
Not surprisingly the current Aer Lingus slot portfolio is evenly distributed throughout the day, with departures from 06:50 through to 22:00 and arrivals from 08:05 through to 21:15. As such there is a very attractive spread of potential timing available from which to explore potential new routes and additional frequencies for BA. Again, as you would expect, Dublin is currently the best-served of the four markets that Aer Lingus operates with 10 frequencies a day; Cork and Belfast have four each and Shannon has the balancing three frequencies.
Should IAG complete the acquisition then the focus will be around how those slots are used; some will undoubtedly still be used for services to Ireland but everyone realises that the real prize is long-haul usage of those slots.
Read the rest of this blog at: http://www.oag.com/OAG-Blog/iag-and-aer-lingus-all-about-slots