Ireland says IAG commitments not enough to accept bid for Aer Lingus

The Irish government needs more commitments from International Airlines Group (IAG), which proposed a third takeover bid for its national airline Aer Lingus, a cabinet minister said on Tuesday.

"The information and commitments that have been provided to date do not at present provide a basis on which the government could give an irrevocable commitment to accept an offer to dispose of its shares, should one be made by IAG," Irish Transport Minister Paschal Donohoe said.

IAG, one of the world's largest airline groups, is the parent company of British Airways, Iberia and Vueling.

IAG has made three takeover bids for Aer Lingus, but the Irish government, which holds 25 percent stake in Aer Lingus, has opposed these bids primarily on competition grounds.

IAG's latest bid took place on Jan. 24, 2015, when it proposed a 2.55 euro (about 2.9 U.S. dollars) per-share takeover offer, totalling close to 1.4 billion euros.

"The government has today confirmed that it will continue to pursue a policy based on competition between at least two airlines with significant home bases in the Irish market," Donohoe said in a statement.

"The government also considers an open and competitive aviation sector to be the best mechanism to meet the challenges inherent in the aviation industry and strongly supports the maintenance of an open aviation market," the statement said.

In the statement, Donohoe expounded on the latest government position in relation to IAG's new proposal.

He said progress had been made on guaranteeing jobs, but further clarity was needed.

"Clarity on the overall employment prospects on the basis of the proposals received is still needed, with particular reference to the timeframe within which net additional employment would be created," Donohoe said.

The Irish minister said the government needs firm commitments and details on IAG's transatlantic traffic and other market growth plans.

On IAG's proposed commitments on the Heathrow slots and term-based commitments on routes, the statement said the commitment in relation to routes is for five years, but the government requires a longer period.

It also said the nature and acceptability of oversight measures on the Heathrow slots and routes "needs to be confirmed".

"These would also be subject to any EU considerations," it added.

Donohoe said the government has noted that the Aer Lingus Board was satisfied with the level of the cash offer from IAG.

"This is being evaluated by the Steering Group and its advisors," he said in the statement.

"In line with stated policy, the government remains open to considering any improved proposal which IAG may bring to the Steering Group," he added. Endit