Varadkar sceptical on Ryanair proposals

THE MINISTER for Transport, Leo Varadkar, does not believe remedies being proposed by Ryanair to the European Commission as it seeks approval to acquire Aer Lingus would be in Ireland’s best interest.

In an interview with The Irish Times yesterday Mr Varadkar said such proposals could result in job losses here and a loss of some international connections.

“It seems that their remedy package involves giving some Aer Lingus routes to foreign airlines and some Ryanair routes to foreign airlines, which to me isn’t very appealing because it would certainly mean Irish job losses I would expect,” he said.

“And while foreign airlines are of course extremely welcome they are likely to come off those routes more quickly if they are not profitable. If that’s the way it’s going I fail to see the upside for Ireland.”

Mr Varadkar said it would be “tough but not impossible” for Ryanair to take over Aer Lingus, adding that Aer Lingus was highly vulnerable to a takeover at some point. “The key policy concern is that if it falls into the wrong hands they might either asset-strip it or use it for their own purposes, which is why I’m very mindful that if we sell the stake we want to sell it to someone who is interested in flying planes in and out of Ireland.”

Ryanair has offered €1.30 a share for Aer Lingus and the bid is the subject of a phase II investigation by the Commission.

Mr Varadkar also said there was nothing untoward in the delay in the publication of CIÉ’s 2011 accounts.

“The accounts for 2011 are fine, he said. “There’s nothing corrupt or dodgy or anything like that whatsoever. I can absolutely guarantee you that. The issue holding it up was the directors’ concerns about the future viability of the company. That’s now largely been addressed. I expect the accounts to be published in November. They won’t be very exciting. There’s nothing hidden away.”

The Government has agreed to provide an additional €30 million to CIÉ this year to plug a gap in its finances. He said a package of measures would address the bus and rail group’s financial viability in future years.

“We’re trying to put together a package of measures that involves changes to work practices and terms and conditions.

“The Irish Rail unions have already balloted and accepted that two to one and the bus companies are in the LRC as we speak. There will probably be the sale of some assets and a new lending facility will be put in place.”

Mr Varadakar has held back the additional subvention for this year until all elements of the package are agreed.

“I don’t want to be in a position where the NTA hands over a cheque only to be told a few months later that the other stuff isn’t working out,” he said.

“This should ensure the financial viability of the company well into next year and hopefully beyond.”

He said CIE’s subvention for 2013 would be €216 million as previously announced.

Mr Varadkar also ruled out major changes to the free travel scheme for pensioners and some other travellers. “I would be shocked and bowled over if it was abolished. Nobody has even suggested it be abolished,” he said.

“There appears to be a fair bit of fraud going on. We’d like to move it to a smart card.

“We’re trying to study the scheme and modernise it. I don’t expect any dramatic announcement in the Budget.”