Oireachtas Joint and Select Committees

Tuesday, 17 February 2015

Joint Oireachtas Committee on Transport and Communications

Proposed Sale of Aer Lingus: (Resumed) Aer Lingus and Stobart Air

5:00 pm

Mr. Stephen Kavanagh:

All of the carriers, as part of the Atlantic joint business arrangement, sell one another's capacity on a neutral basis as if it is their own. It is a revenue sharing arrangement. It is what happens between Finnair, British Airways and Iberia, United Airlines, Air Canada and Lufthansa, and Delta Airlines, KLM and Air France. That is why I referenced the tension there might be if Air France were to undercut the price of a Delta Airlines seat. What we are discussing is access to greater market opportunities. This means that the Shannon-New York route has greater potential to be sustainably profitable in the context of IAG's proposal than on a stand-alone basis. There would be more people with a vested interest in generating revenue on it.

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