Aer Lingus deal depends on jobs, says Minister

The sale of the State's 25 per cent stake in Aer Lingus to International Airlines Group (IAG) has been recommended by the Cabinet and will go before the Dáil on Wednesday.

Announcing the move, Minister for Transport Paschal Donohoe said the seven-year guarantee on the company's slots at Heathrow and commitments on jobs were among the key elements which swung Coalition support.

He said the deal would create 150 net new jobs by the end of 2016, with the possibility this could rise to 635 by 2020. The existing rights of all Aer Lingus employees “will be safeguarded”, he added. He said Aer Lingus is a “great company” and selling it to IAG means it will continue to serve Irish people in future

Mr Donohoe said there would be an additional four transatlantic services, with two introduced next year. Legally binding guarantees have been provided on all of the airline's existing slots at Heathrow Airport for an "unlimited" period of time.

The current daily services between the London hub and Dublin, Cork and Shannon will be maintained for “at least” seven years, with the final two years conditional on airport charges not increasing beyond specified levels. For five years, Aer Lingus’s remaining Heathrow slots, currently operated from Belfast would “continue to be operated to/from routes on the island of Ireland”.

The Government says this will offer greater certainty than is currently the case with the State’s minority shareholding.

The Minister for Finance will retain a share in the company, designated as a new class of share, which will only allow any changes to connectivity to be made with the consent of the government of the day. A legally binding commitment has also been provided to protect the Aer Lingus brand, as well as ensuring it is headquartered in Ireland.

Broadly happy

The group of

Labour

TDs who had concerns about the deal are understood to be broadly happy after being briefed on Tuesday evening.

However, Clare Labour deputy Michael McNamara, whose primary concerns are around connectivity, said he wants to see the details of the deal rather than just be briefed on it.

Mr McNamara said he will vote against the sale in the Dáil if he is not shown the full details of the deal beforehand or is not satisfied with it. The proceeds of the sale are to be used for investment in other transport projects, as well as in areas such as broadband.

The deal being would mean the establishment of a so-called “connectivity fund”, which would be administered by the Strategic Investment Fund.

Sale of the stake will yield about €400 million for the State but any investment will be in the form of public-private partnerships.