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Division over Aer Lingus Sale

CLARE’S five Government Oireachtas members are divided over the possible implications of the decision to press ahead with the €1.4 billion sale of Aer Lingus to International Airlines Group (IAG).
Furthermore, Fianna Fáil’s Timmy Dooley has added a twist to the debate in claiming the Irish Government might have no option but to sue IAG if the Aer Lingus Heathrow slots are sold.
Fianna Fáil said it will table a Private Notice Question in the Dáil on Thursday, in a bid to suspend the proposed vote to sell off the national stake in Aer Lingus. The move follows the emergence of a report prepared by aviation consultants Nyras for Aer Lingus, in which the company sets out a range of cost reductions across the airline, including a proposal to outsource part of aircraft maintenance to Eastern Europe.
The Government is recommending the sale of the State’s 25.1% stake, worth €335million, in Aer Lingus to IAG and put a motion to the Dáil on Wednesday, to be followed by a vote this Thursday.
Clare Fine Gael TDs Pat Breen and Joe Carey are supportive of the move, as is party colleague Senator Tony Mulcahy. Senate colleague Martin Conway is opposed to the sale, while Labour’s Michael McNamara is reserving judgement.
“I supported a motion at the recent Labour Party conference calling on the Government to reject any further takeover bid that does not clearly ‘articulate a plan which would promote Shannon and Cork airports’, taking into account their distinct business models and impact on their individual regions,” Deputy McNamara explained.
“I would need to see the detail of the agreement and be assured that it is in the best interests of Shannon Airport, balanced regional development and the thousands of people whose livelihood, both directly and indirectly, depend on the airport,” he added.
Deputy Pat Breen claimed the Government has “effectively a veto” over the possible sale of Aer Lingus slots at Heathrow.
“With a golden share being retained in the control of our finance minister, the State will now have a greater say on any potential slot disposal. These guarantees will provide far greater certainty around connectivity to Heathrow into the future than the State currently has, as a minority shareholder in Aer Lingus. The Government announcement on the proposed sale of shares in Aer Lingus makes specific reference to IAG’s plans to sustain and grow Aer Lingus’ business at Shannon Airport and to explore the new growth opportunities that will be available as part of IAG,” he said.
Senator Martin Conway is opposed to the development. “I would be considered a contrarian voice on this particular issue within Fine Gael,” he claimed, adding, “I have always been against the privatisation and the sale of Aer Lingus. I was against the sale of 75% of Aer Lingus in the first instance and I have been a firm advocate for not selling. I have spoken to the minister and told him about my opposition to it. It would appear that it’s going ahead. I would consider it the best of a bad lot at this stage.
“I would still put it on the record that I don’t believe it should have been sold. It was a company that had made millions upon millions of profit. There was absolutely no reason why this gem of Irish aviation couldn’t have continued in Irish ownership. But the people who are above my pay grade took a different view on this. I would just be positively cautious that at least the noise that I’ve made in the last couple of years, and more recently in the last number of months, in my several conversations with the minister, we can say definitively that there is a seven-year protection barrier there. I am meeting the minister again this evening [Wednesday] to seek further assurances on this legal guarantee that they have over the sale of the slots,” Senator Conway stated.
Deputy Joe Carey holds the completely opposite view on the proposed sale. “This deal removes all of the uncertainty around the future of Aer Lingus and is, in essence, all about connectivity, jobs and growth. The significant concessions secured during the course of detailed negotiations will really benefit Shannon and the Mid-West Region,” the Fine Gael TD maintained.
However, Fianna Fáil Transport spokesperson, Timmy Dooley, claimed Shannon’s Heathrow slots could be sold and that the Government’s only recourse could be through the courts.
“The biggest concern that we have are the slots access at Heathrow. Everybody in the region knows the impact that the loss of connectivity would have if IAG either reallocates the slots or sells them. It’s not clear from the guarantees that are being talked about if they’re sufficient or if they’re enforceable,” he stated.
“Even if they are enforceable, if the company takes a decision to dispose or reallocate them, the only thing available to the Government would be to sue IAG. So at the end of a protracted legal battle, the outcome might be that the State would get some additional monies as redress for the breach of contract. Financial contribution could be no redress for the regions. The fact is you would have lost the connectivity,” Deputy Dooley pointed out.
Shannon-based Senator Tony Mulcahy holds a similar view to that of Deputies Breen and Carey. “British Airways will strengthen its throughput of business class passengers through Shannon’s US pre-clearance facility, which will allow for pick-ups in Shannon. This is hugely important for our business community, giving them high-quality access to the USA,” Senator Mulcahy said.

By Peter O’Connell

FF to table Private Members Motion

FIANNA Fáil is to table a Private Notice Question in Dáil Éireann this Thursday in a bid to suspend the current debate and proposed vote to sell off the national stake in Aer Lingus.
The move follows the emergence of a report prepared by Nyras consultants for Aer Lingus, in which the company sets out a range of dramatic cost reductions across the airline, including a proposal to outsource part of its aircraft maintenance to Eastern Europe.

Deputy Timmy Dooley .
Deputy Timmy Dooley .

“The Government’s approach to the whole debate around selling the national strategic stake in Aer Lingus has been appalling. Despite promises to bring all relevant information before the Transport Committee and assurances that there would be a proper, well-informed debate before any decision to sell, the Government is now seeking to rush through a vote, without even its own backbenchers being in possession of the full facts,” Deputy Timmy Dooley said on Wednesday evening.
“We know this to be the case because Fianna Fáil has come into possession of a report prepared by the Nyras consultancy for Aer Lingus, which compares the airline’s cost base to a range of low-cost airlines and sets out cost-reduction strategies that would directly impact jobs at the airline and speaks directly to the issue of the value of the airline.
”However, the Government itself claims to be entirely unaware of the report – a very serious situation in itself, given the Government’s status as a 25% shareholder. If there is a shred of good faith on the Government benches, there will be no vote on the future of Aer Lingus, unless and until TDs get to examine all the relevant paperwork relating to this deal and to the airline’s plans, including the Nyras report,” he added.
Fianna Fáil will table a Private Notice Question to suspend the debate, until this examination takes place.
“We will be calling on TDs from all parties, who claim to have an interest in the airline’s future, to support this motion,” Deputy Dooley concluded.

 

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