Varadkar insists there will be no sale of Aer Lingus stake until the price is right
Minister for Transport, Tourism and Sport Leo Varadkar says he does not favour selling the State’s 25 per cent Aer Lingus stake “at the moment”. Photograph: Eric Luke
The Government has cooled on proposals to sell the State’s 25 per cent Aer Lingus stake and is not likely to pursue any such deal unless a bidder meets conditions that the Minister responsible believes would not be attractive to a commercial player.
Minister for Transport, Tourism and Sport Leo Varadkar says he does not favour selling the holding “at the moment”, stressing that the Government is neither pursuing nor likely to do so during its lifetime.
A possible disposal of the shareholding was part of the Government’s State asset sale programme announced early last year by Varadkar’s Cabinet colleague, Brendan Howlin, along with other businesses, such as Bord Gáis Energy, a number of ESB plants and Coillte’s harvesting rights.
Since then there has been some speculation that Etihad, which already owns 3 per cent, is interested in buying the Government’s shares.
Its chief executive, James Hogan, has signalled several times that the Middle Eastern carrier would be prepared to bid for it.
It also emerged recently that Aer Lingus has engaged in inconclusive talks about a possible merger or link up with another airline.
Its biggest rival, Ryanair, which holds 29.8 per cent of the company, has unsuccessfully attempted to buy it outright on three occasions.
Varadkar points out that the Government has consistently said that it would sell the stake at the right time and at the right price and under the right conditions. “And more and more I think about what that means, I find it very hard to see when the right time is, what the right conditions are and what the right price would be.
“What I don’t want to do is say that I’m ruling it out, because a situation could arise where somebody comes along, offers the Government a huge amount of money for the stake and makes commitments to Ireland that we know they will honour in the long term, but do I see that happening? I don’t know. Why would any buyer want to do that anyway?”
The Minister acknowledges that during his time in Government, his views on privatisation generally have changed. He argues that small states such as the Republic should be cautious, as what works in large economies such as the US or Germany may not necessarily apply here.
Events during Ryanair’s last bid for Aer Lingus opened his eyes to that, he says. In an effort to allay any objections on competition grounds, Ryanair agreed that if it were successful, it would transfer Aer Lingus services from Dublin, Cork and Shannon to Heathrow to the International Airlines Group (IAG) subsidiary, British Airways.