Cullen to present plans for Aer Lingus next week

Transport minister Martin Cullen is set to bring proposals for the part sale of Aer Lingus before the Government next week. The company itself has not yet ruled out the end of June as a possible target date for the controversial flotation of the airline's share capital on the stock exchange. Barry O'Halloran reports.

At a press conference to mark the launch of a new direct Aer Lingus service from Dublin to Dubai, Mr Cullen said he and his finance colleague, Brian Cowen, were in the final stages of putting the proposal together.

"The process is coming to a conclusion in my view," he said. "I hope that we will be going to Government next week with our proposals." Mr Cowen is involved as the Minister for Finance, who is the shareholder on behalf of the State.

Mr Cullen made it clear that they favoured an initial public offering (IPO) - the flotation and sale of shares in the carrier on the Stock Exchange - as the best means of selling the State's interest in the company to allow it to raise cash.

"Certainly it's no secret that that is looking like the most favoured option," he said.

Aer Lingus chief executive, Dermot Mannion, said completing the transaction by the end of June was "still an option" as a lot of the necessary work for the privatisation had been done. However, he added that management would "assess other dates as they become available". Mr Cullen also said that the Government was in the process of dealing with the €200 million shortfall in the company's pension fund. The State is proposing to use part of the sale proceeds and that workers increase contributions to deal with this.

However, Michael Halpenny, national industrial officer of Siptu, the airline's biggest union, said this had yet to be resolved. "No meaningful engagement has taken place between the union and any party with regard to the critical issues of job security, pensions and conditions, as promised by the Minister," he said.

However, an Aer Lingus spokeswoman last night said that consultation was taking place.

The union intends to finish a protective ballot of workers on industrial action - a step that could ultimately lead to a strike - tomorrow.

Questioned about this yesterday, Mr Cullen said that all parties had to understand that Aer Lingus needed to privatise in order to raise the cash necessary to its development. "We have to move on the sale process," he said.

The new route that Aer Lingus launched to Dubai yesterday is its first long-haul service outside the US. Mr Mannion, a former executive of Dubai's Emirates Air, said it would open up a further 21 destinations in the southern hemisphere to Irish travellers.

The Dublin-Dubai service is expected to carry 70,000 passengers in its first year of operation.