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Aer Lingus, IAG deal opposed by pilots group

[LONDON] Aer Lingus Group Plc doesn't need a takeover by IAG SA, the owner of British Airways, the head of a pilots group and an investor in the airline said, adding to opposition to any potential bid.

"Aer Lingus does not need IAG," Evan Cullen told a parliamentary committee hearing into the proposed takeover, in Dublin on Thursday. "IAG needs Aer Lingus."

Mr Cullen said it was "nonsense" to suggest that binding legal constraints could be put on IAG if it took over Aer Lingus, as lawmakers fret over the loss of connections between Irish airports and the UK if the deal goes ahead.

Lawmakers are also concerned that a takeover will lead to possible job losses at Aer Lingus in the run up to a general election due next year.

"IAG will eliminate duplication of backroom resources," Mr Cullen said. "That is how consolidation works."

The pilot group built up a stake in Aer Lingus, as it sought to ward off earlier attempts to take over the airline by Ryanair Holdings Plc.

Aer Lingus dropped as much as 4.9 per cent to 2.25 euros in Dublin, and traded at 2.26 euros as of 3:18pm in Dublin. The company said on Tuesday that an indicative IAG bid of 2.50 euros a share plus a 5 cents cash dividend were enough for it to recommend an offer to investors, subject to conditions.

Aer Lingus said the deal won't go ahead unless the state sells its 25 per cent stake in the company.

Prime Minister Enda Kenny said on Wednesday in an interview with Dublin-based broadcaster Newstalk that he would have to consider the impact of selling the company on the wider economy.

BLOOMBERG