Oireachtas Joint and Select Committees

Thursday, 2 April 2015

Joint Oireachtas Committee on Transport and Communications

Proposed Sale of Aer Lingus: (Resumed) Virgin Atlantic Airlines

10:30 am

Mr. Joe Thompson:

The European Commission will review the competitive impact of this proposed transaction if and when it is confirmed. We are in the process of making a submission to the Commission outlining very similar arguments to what we have laid out today.

There was a point as to whether there is a commercial impact on Virgin Atlantic and I have been quite transparent in saying there is such an impact. There is also a commercial impact on a number of other airlines which currently operate in partnership with Aer Lingus today who are not IAG or IAG partners. We operate in a commercial world and airlines must deal with changing market conditions. In such a scenario we would have to find a way to adapt to the new world in the way we adapt to a new world every day. The important point is that Irish consumers will not have that option. We would seek other partners and we might change the size of aircraft or timing of flights to ensure we can adapt to the new world in the way we do. We should not have to do that as appropriate remedies should be applied. Nevertheless, we have the ability to do that but the Irish consumer does not have that choice. There was a point about Ireland and Dublin becoming more of a hub for flights, particularly across the Atlantic. We would welcome that coming about and we support competition. We have competed intensely with a number of airlines over many years, and if this comes about, we will compete with future services

To apply a network planner's view, one of the key enablers of a really strong hub is the size of the local market and the customers who want to travel point-to-point through flight services. If there is a strong local market that can be supplemented with feed, one would be in a really strong position. The size of the long-haul market from Heathrow is 27 million passengers per year, and the size of the local market from Dublin is 3 million passengers per year. I am sure there are opportunities for expansion in long-haul services in Dublin for the right airline, and that is what every country, city and airport wants. When it comes about, we will compete with it effectively. It is important at this point to examine the competitive position as it is today; second-guessing what will happen in future is very difficult. We need to examine consumer behaviour and the impact this transaction would have on those consumers and their choice.

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