IAG win over trade union in boost to Aer Lingus bid

DUBLIN, Feb 22 (Reuters) - A trade union group representing Aer Lingus (Other OTC: AELGF - news) workers has reversed its position and said it will now back a takeover approach by IAG after the British Airways' owner laid out its growth plans for the Irish airline.

Aer Lingus' board recommended the 1.36 billion euro offer from International Consolidated Airlines Group last month, subject to the Irish state selling its 25 percent stake, but political and trade union opposition has been significant.

Aer Lingus' Central Representative Council (CRC) -- a grouping of staff representatives from the company's trade unions -- said last month that a sale could have a devastating effect on employment and lead to up to 1,200 job cuts.

However it said it had changed its stance after IAG's Dublin-born chief executive Willie Walsh, who began his career as an Aer Lingus pilot, told a parliamentary committee that job cuts would be minimal and be far exceeded by new roles as it expands Aer Lingus's fleet.

"The danger of this going away is that the company could eventually go into a downward spin and who knows going forward what would happen if that was the case," CRC Secretary Myles Worth told national broadcaster RTE.

"There doesn't seem an immediate threat to the company but if this bid was to fail and the share price goes down, there's a likelihood that the new CEO would have to put together a very aggressive cost-cutting plan."

Senior government ministers have said they are not yet convinced on the merits of selling as a government-appointed group prepares a report on its options. Resistance is especially strong among members of the junior coalition partner the Labour Party ahead of tough elections next year.

But one senior member of the centre-left party, which has close trade union links, said on Sunday that the state should sell.

"Before we heard from Walsh, my tentative disposition was not to sell," Pat Rabbitte, a former Labour leader and minister before a reshuffle last year, wrote in the Sunday Business Post newspaper.

"I appreciate that IAG may not seem the best option for government colleagues (but) the best option, I suspect, is to do business with Willie Walsh and IAG." (Reporting by Padraic Halpin; Editing by Robin Pomeroy)