Varadkar rules out sale of State’s stake in Aer Lingus

Minister for Transport Leo Varadkar has all but ruled out any sale of the State's 25 per cent stake in Aer Lingus saying it is difficult to see the "right conditions" for such a sale occurring at any time in the near future.

When he announced Government plans to sell a number of State assets, Mr Varadkar's Cabinet colleague, Brendan Howlin, said the 25 per cent holding in the airline would be put on the block, under the right circumstance.

In an interview with The Irish Times today, Mr Varadkar said he did not favour selling the stake for the moment and that the Government was not pursuing it. "What we've said consistently is that we'll sell the stake at the right time, at the right price and under the right conditions."

“And the more that I think about what that means, I find it very hard to see when the right time is, what the right price is and what the right conditions would be.”

Mr Varadkar also said that it would be very unlikely any investor would come along at the right time and meet those conditions.

Industrial relations
The comments by the Minister on Aer Lingus come as the airline faces a period of potential industrial relations turmoil and further disagreements on the pension scheme operated for its staff and those employed by the Dublin Airport Authority (DAA).

The outcome of a ballot for industrial action by cabin crew at Aer Lingus is expected to be made known today while separately unions seem set to look for the airline and the DAA to invest further funds in a bid to plug a deficit of about €780 million in the joint pension scheme.

However Aer Lingus has already signalled in recent weeks to the markets and to the trustees of the pension scheme that it will not put up any additional money on top of the €140 million it has agreed to invest. The ballot for industrial action relates to a number of issues including rostering arrangements and the plans by the company to close its cabin crew base at Shannon airport.

Any announcement of threatened strike action could cause difficulties for the airline’s advance bookings in the run-up to the Christmas even if the dispute did not ultimately result in work stoppages.

Pensions
Meanwhile trade unions have said they intended to ask Aer Lingus and the DAA to provide "support for measures which will result in members having the confidence that the pension contributions that they make will result in decent and sustainable retirement income".

The unions told the trustees of the scheme that they intended to meet management at Aer Lingus and the DAA this week over the pension scheme.

The unions have rejected proposals from the trustees. They said the trustees’ proposals could result in benefit cuts of between 25 and 30 per cent for active and deferred members of the scheme.

In his interview Mr Varadkar also criticised a Ryanair-International Airlines Group (IAG) proposal, made during the last takeover battle for Aer Lingus, that IAG subsidiary British Airways would buy and operate the Irish airline's services from Dublin, Cork and Shannon to Heathrow for a period of three to five years.

The Minister said that it was simply designed to feed passengers into Heathrow and had nothing to do with ensuring that the Republic maintained vital transport links with destinations to which Irish people regularly travel via the London hub.