Government will resist 'fire sale' of 25% in Aer Lingus

Thu, Jun 21, 2012, 01:00

TAOISEACH ENDA Kenny has said the Government will not be “shoved into a fire sale” of its 25 per cent Aer Lingus share following Ryanair’s renewed bid for the company.

He said the entire area must be considered in terms of its regulatory, competitive and economic value.

“If and when that decision is made, it will be in the best interests of the people and the country in respect of all of those issues,” Mr Kenny added.

He said the Government had not, collectively, considered the bid.

Fianna Fáil leader Micheál Martin said the fundamental question was whether the Government had assessed the competition issues surrounding such a bid, the strategic considerations and the impact on consumers.

In 2007, the European Commission had come to definitive conclusions that a takeover by Ryanair would be very harmful to competition and would create a dominant position on 35 routes operated by both parties. This would lead to increased fares for 14 million EU passengers, he added.

Most people, Mr Martin added, identified the Aer Lingus shares and the Heathrow slots as being of significant strategic value.

Mr Kenny said the Government would be concerned in terms of competition, consumer facilities relating to price, access to the country and other matters.

“It is, however, a minority share the Government has and we do not have any veto over this,” he added. “We have no blocking rights.”

Mr Kenny said the Government had looked in detail, over the past six months, at the question of a definitive list of State assets that could be disposed of from a regulatory, competitive and economic point of view.

“We have made it perfectly clear that in respect of each and every one of those, they would only be disposed of in accordance with best principles in the interests of the country and the people at the right time and at the appropriate price,” he said.

Independent TD Shane Ross called on the Taoiseach to state specifically that he would not allow a monopoly or a dominant position in airlines in Ireland, any more than it would be allowed in any other sector.

Mr Kenny repeated that the Government would not be pushed into a fire sale because €175 million was put on the value of the Government’s shareholding.

“While the director of Ryanair is a person who has made very important moves in the past, in the sense of bringing real competition and access to and from this country for hundreds of millions of passengers, the fact is that the Government has a 25 per cent stake in Aer Lingus and there are other players in the field,” he said.

Mr Ross said there was a madcap proposal 10 years ago by Bank of Ireland which wanted to merge with AIB, which would have had catastrophic consequences.

“Thankfully, that proposal went west with, as I recall, the then government’s approval,” he added.

“I hope the Government will see that this particular proposal goes under as well.”

Mr Ross said there was also the question of whether the House was dancing to the wrong tune in discussing the Ryanair bid.

Had the Government considered whether it was an attempt by Michael O’Leary to sell his shares in Aer Lingus?