Aer Lingus’s ownership was dysfunctional before IAG stepped in

Sir, – Eoin Burke-Kennedy really misses the point when he asks “Was joining IAG a strategic mistake for Aer Lingus?” (Business, August 7th).

Before being acquired by IAG, Aer Lingus had a dysfunctional shareholding group. About 30 per cent was owned by Ryanair, whose main interest was in devaluing the company to support its attempts to acquire it. About 25 per cent was owned by the Irish government. Its main interests appeared to be in maintaining uneconomic year-round operations and ensuring maintenance of Aer Lingus’s London Heathrow slots. About 10 per cent was owned by the company’s employees who, naturally, were mainly interested in working conditions and job security. A further 4 per cent was owned by Etihad Airways, which was interested in having Aer Lingus operate to Abu Dhabi. And finally, 3 per cent was owned by a private individual who wished to maintain quality air services into and out of Ireland.

So two-thirds of a supposedly public company was closely held by five shareholder groups with disparate interests. This was not a recipe for long-term corporate success and would have left Aer Lingus vulnerable if it wished or needed to raise additional capital. It left the board with little option but to seek a more solid shareholding.

The success of Aer Lingus as part of IAG is apparent. In the 10 years since it acquisition, Aer Lingus revenues have grown by nearly 50 per cent, despite suffering more than two years of negative growth during Covid. The Aer Lingus strategy of using Dublin as a hub between North America and Europe, which was initiated prior to the acquisition, has been greatly enhanced by being part of IAG. In 2025 Aer Lingus served more US cities than any other European airline other than British Airways. These facts don’t appear to be the outcome of a strategic mistake.