Aviation to dominate O'Rourke's agenda

With Telecom Eireann - now Eircom - successfully floated on the market, the Minister for Public Enterprise, Ms O'Rourke, has one less company on her plate. But the next few months will be busy, as she brings proposals to the Cabinet on the future of Aer Lingus and Aer Rianta, as well as dealing with key policy issues in a number of other State bodies under her Department.

There is no doubt that aviation will dominate the Minister's autumn schedule. Aer Lingus is now firmly on track for a stock market flotation, according to Ms O'Rourke, and the likely timing is the end of next year or early 2001. However, she emphasises that this "depends on the market" and on the fortunes of the cyclical aviation sector. Aer Lingus is currently negotiating the details of its strategic alliance with British Airways and American Airlines and "before the end of the year they will be back to me with their courting over". Decisions on a float timetable will then be taken, but "the plan would be late 2000 or around the turn of the year".

With Aer Lingus heading into the private sector, what of the restriction that airlines flying transatlantic into Dublin must operate matching routes from Shannon? Critics of the policy say it will limit Aer Lingus's ability to increase its transatlantic traffic as part of its new alliance.

A definite decision had been taken to encourage growth in business from all airlines into Shannon, with minimum delays on approvals for new routes, according to the Minister. This has led to a 14 per cent growth in business in the first half of this year, compared to the same period last year, and Ms O'Rourke is confident that this is the start of a rising trend.

"Shannon now needs a few good confident years," she believes, before making any further changes in the rules governing transatlantic traffic. The Minister will not be specific on the timescale for a reconsideration of these rules, but says that in the "short to medium term" - and after further growth at the airport - "it will be time to look at that again".

More immediate policy issues face the Minister and the Government in relation to Shannon's owner, Aer Rianta and its future. Aer Rianta has recommended to the Minister that part of the company should be floated on the stock market, with the State selling 49 per cent of the company over the next two to three years. However, in advance of receiving her own consultant's report on the issue, Ms O'Rourke has reservations.

"I don't see the point in exchanging a public monopoly for a private one," she said. She identifies a key issue as introducing fresh competition into the Dublin market, but concedes that this will not be easily achieved.

In relation to the proposals from the McEvaddy brothers for a second terminal at Dublin Airport, she expresses reluctance about allowing private access to a State-built infrastructure. Any such proposal would have to be fully explored and subject to tendering from interested parties, she says.

"Baldonnell is a possibility," she says, referring to the proposal to turn the Air Corps aerodrome into a full airport. But getting the necessary planning permission would be very difficult, she believes.

In relation to Great Southern Hotels, which Aer Rianta wants to sell off, the Minister emphasises that the Government has made "no formal decision". In general terms she is in favour of selling off the hotels as a unit, seeing them as being in need of a substantial injection of capital. However, she points out that the hotels at Dublin - and possibly Shannon - airports may be an exception, operating as they do as part of the infrastructure of the airports. This appears to indicate that these could remain in Aer Rianta hands.

While aviation issues will dominate the Minister's brief during the autumn, other companies are also undergoing change. The Minister indicated this week that an alliance - probably with another European postal company - is the way forward for An Post. The Irish National Petroleum Corporation is undergoing a £70 million (€89 million) investment programme and is investigating joint venture links for particular projects. And Bord na Mona is prospering after a good summer.

Two other major State companies also come under the Minister's wing. ESB is to report to her by the end of the year on its plans for the future - with a flotation seen as a prospect in the medium term following the introduction of competition into the market. Meanwhile, in CIE major investment is planned under the new national development programme. As well as the LUAS project, consultants engaged by the group are to complete costing and feasibility studies by the end of the year on a range of new projects. These include a new inland rail link to Navan and provision or enhancement of services to growth centres identified in the strategic planning guidelines, including Drogheda, Naas, Newbridge, Kilcullen, Wicklow and Navan.

The consultants are also examining the separation of long distance and commuter rail traffic through the construction of bypass lines, with options including a new rail link from the Belfast line through Swords and Dublin Airport to the western lines and a new rail link east of the current loopline into Dublin city centre.