Northern Ireland

Aer Lingus 'did not break Belfast International Airport contract'

Aer Lingus Image copyright PA
Image caption Aer Lingus moved to George Best Belfast City Airport in 2012

Aer Lingus did not break any 10-year contract to fly out of Belfast International Airport, its chief executive has told the High Court.

Stephen Kavanagh said it honoured a pricing arrangement to pay for having a base at Aldergrove and only left when the operation became unsustainable.

BIA is suing Aer Lingus for £20m in damages over the switch to George Best Belfast City Airport in 2012.

The terms of a deal said to have been agreed in June 2007 are being disputed.

The deal followed months of negotiations as the airline sought to establish a base outside the Republic of Ireland.

Issues under discussion were said to include charging rates and £900,000 in launch support for three Airbus A320s over the first three years.

According to BIA, the airline then moved its Belfast operation in breach of a binding 10-year contract.

Mr Kavanagh rejected that assertion, telling the court his company lost up to 44m euros from having a base at the International.

Under cross-examination by counsel for BIA on Tuesday, he was asked if he thought the five years spent at the airport had been financially "disastrous".

The airline chief replied: "It was my belief that the investment was not capable of securing or delivering the targeted return and in that context was not sustainable."

The move to Belfast City was because Aer Lingus could not make its arrangement at BIA work, the court heard.

Mr Kavanagh said there were three options: Terminating the base and re-deploying assets elsewhere, keeping the base at Aldergrove with a revised network strategy; or switching to the rival airport.

Belfast City was said to have emerged as a potential alternative due to a focus on domestic flights.

'Agreement honoured'

Despite acknowledging BIA's "operational advantage" of 24-hour flying, Mr Kavanagh added that there was little demand for flights arriving from London "in the wee small hours".

He stressed, however: "We never had any issue with the performance of the airport. We had an issue with the performance of the business at the airport."

Pressed further by a barrister for BIA on the circumstances surrounding the airline's exit, the chief executive said: "I dispute that we broke a contract.

"We honoured our pricing agreement, we followed (it) and we paid as was detailed in the pricing agreement."

The case continues.

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