The chairman of Aer Lingus, Mr Tom Mulcahy, will brief the Minister for Public Enterprise, Ms O'Rourke, on the situation at Aer Lingus tomorrow evening. The airline's management team will work through the weekend to try to finalise a rescue plan to be put to the Minister and the Government.
Ms O'Rourke will fly to Luxembourg on Monday to start drumming up support for a Government-aided rescue of Aer Lingus, which claims to be losing £2 million a day (€2.5 million) and could be bankrupt by early next year.
Ms O'Rourke has already begun the process of building a coalition among transport ministers in the other EU member-states whose airlines are also in difficulty following the events of September 11th. The Minister has already been in contact with her counterparts in Greece, Portugal and France and expects to have spoken to the others ahead of next Tuesday's meeting of the Council of Transport Ministers.
State aid for Aer Lingus is not expected to come up at the meeting, but the Commission is expected to outline its position generally. The council is expected to be split on aid, with many of the smaller and medium-sized countries supporting a round of state assistance.
Britain and Germany, whose airlines would be winners in any European shake-out, may oppose the measures - other than limited aid to compensate for the effects of the terrorist attacks.
The Government favours the option of giving Aer Lingus a short-term loan to allow it to restructure. Such loans are permissible under the EU's strict rules on state aid. Some observers in Brussels suggest the Government would be wiser to bide its time while political pressure mounts on the Commission to allow greater help for the European airline industry.
The sources believe Commission guidelines on state aid appear to rule out allowing the Government to guarantee a loan to Aer Lingus in present circumstances. If the Government makes a formal request for permission to take such a step, the Commission is likely to reject it.
Both the Taoiseach and Ms O'Rourke are expected to reaffirm their commitment to saving Aer Lingus in their addresses to the Fianna Fβil ardfheis in Dublin this weekend. Aer Lingus sources said its plan would not contain any new route cuts. The troubled airline would focus on the operational areas in which cutbacks would have to be made to reduce its cost base by 25 per cent. Some 2,500 permanent jobs are expected to go.
A delegation from Fine Gael yesterday met Commission officials for more than three hours to plead for a flexible interpretation of rules on state aid to Aer Lingus. The party's deputy leader, Mr Jim Mitchell, said it was crucial that the Minister for Finance, Mr McCreevy, and Ms O'Rourke present a united front at EU meetings in Luxembourg next Tuesday. "It is vital that both ministers are singing from the same hymn sheet and that they have a very strong case prepared," he said.
Labour Party leader Mr Ruair∅ Quinn called on the Taoiseach to take direct charge of the rescue efforts and to make the crisis facing European airlines "his absolute priority" for the summit of EU leaders in Ghent next week.
