Cabinet to be briefed on Aer Lingus crisis

The Minister for Public Enterprise, Ms O'Rourke, will brief Cabinet colleagues today on the extent of the crisis facing Aer Lingus as a result of the economic slowdown resulting from the terrorist attacks in the US on September 11th.

With earnings badly affected as bookings fall up to 75 per cent on transatlantic routes and short-haul business suffers sever inroads, the Minister will have little difficulty in persuading the Cabinet of the severity of the problems facing the State airline. Commercial difficulties caused by the slowdown in the US economy before September 11th are now seen by those connected to the airline as insignificant compared to the impact since.

No immediate Government initiative on Aer Lingus is anticipated. However, given Washington's virtually open-ended commitment to support the US airlines, a consensus was emerging last night that Brussels must also put in place supports for stricken European airline companies, such as Aer Lingus.

Ms O'Rourke has been been in close contact with EU Transport Commissioner, Ms Loyola de Palacio over the past two weeks and is due to attend a meeting of EU transport ministers in Brussels on October 15th at which the European response to the aviation crisis is expected to be formalised.

The Government's immediate concern is the commercial plight of the company and the future for its workforce, a spokesman for the Minister last night emphasised as he sought to allay concerns, raised at a trade union seminar on Aer Lingus in Liberty Hall, over a media report that Ms O'Rourke was pressing ahead with plans to sell Aer Lingus. "In the current commercial climate, the issue of a flotation or a trade sale of Aer Lingus is not relevant," the spokesman said. Speaking in a "private capacity", a senior public servant in Ms O'Rourke's Department, Assistant Secretary General Mr John Lumsden, told the SIPTU seminar that in his opinion, Aer Lingus should be privatised "if it was operating under normal commercial conditions".

This was not an ideological position, he emphasised afterwards. It was just his opinion of what was best for Aer Lingus under normal conditions. He appreciated that normal economic criteria had changed utterly since September 11th.

ICTU general secretary Mr Dave Begg described the US as "very pragmatic" in business. In reference to the government supports for US airlines, he said: "They export a model of capitalism they never apply in their own country."

The trade union movement had never bought into laissez-faire economics: "We believe that intervention is the best thing to do when this is reasonable."

Mr Des Geraghty, the SIPTU president and a former MEP, said the key to the crisis facing Aer Lingus from a competition viewpoint was the fact that the impact was felt directly on its North Atlantic business.

It was not in competition with Ryanair on these routes but with the US airlines.

EU competition rules were broken all the time, he insisted: "We must put forward the most convincing arguments possible in tandem with a powerful coalition led by the Brussels-based European Trades Union Congress and the wider trade union movement within Europe."

Politicians from all parties except the Progressive Democrats attended the seminar and unanimously supported a proposal from SIPTU's national industrial secretary, Mr Noel Dowling, which called for a three to four-year moratorium on any proposal coming from Government to privatise Aer Lingus.