Inside the world of business

Airline unions need to be careful

Data from the Central Statistics Office yesterday showed that visitor numbers here declined by 1.1 per cent in the first nine months of the year, with the British market declining sharply.

The data was disappointing and raises serious questions about the wisdom of industrial action next month at Aer Lingus over pension issues. Trade unions are at loggerheads with Aer Lingus over how much the airline should pay to help resolve the deficit in a pension scheme jointly operated with the Dublin Airport Authority.

While it remains to be seen precisely what disruptive action the unions will undertake, the indications are that they will focus on transatlantic services and flights popular with business travellers, notably Heathrow in London.

Such action is aimed at squeezing a better offer from Aer Lingus but it will do little for the image of the State or the economy. Our recovery, such as it is, remains incredibly fragile, as the CSO data highlights.

It certainly won’t help the economy if plane loads of American tourists and investors are left stranded in New York, Boston or Chicago rather than spending their dollars in Irish pubs and restaurants.

Equally, business people and investors are unlikely to be amused by having their Aer Lingus flights cancelled or severely delayed, thereby missing important meetings.

Unquestionably, viewed from abroad, a more benign view of Ireland has emerged in recent months. We’re seen as having taken some harsh medicine, and overseas investors appear willing to do business here once again.

Disrupting the services of the biggest operator of flights into and out of Ireland at this time would be counter- productive to the Government’s efforts to sustain this momentum, to say nothing about undermining the major investment in the Gathering.

The unions should be very careful about how they proceed.

ESB stays on the grid after latest decision

The current issue of the ESB’s staff newsletter indicates that its board has put the final nail in the coffin of any plans to split the State-owned energy group.

In early 2007, the then energy minister, Noel Dempsey, proposed transferring ownership of the Republic’s national grid from the ESB to Eirgrid, another State company which manages the grid, but does not own it.

The proposal was in line with EU policy at the time and was supposed to facilitate competition.

The ESB’s competitors, including fellow State company Bord Gáis, Airtricity, Energia and a range of others, all of which use the grid to transmit their electricity to their customers.

The company itself regarded the plan with some disquiet, but largely kept its own counsel on the issue. Its unions and the staff share scheme were adamant that the group should not lose ownership of the grid.

Dempsey’s successor, Green Party TD Eamon Ryan, said he was committed to the plan, although he ultimately long-fingered it.

Pat Rabbitte, now Minister for Communications, Energy and Natural Resources, changed tack completely and decided not to go ahead.

Rabbitte’s argument is that, in the context of a western European energy market, the ESB will no longer be a big player, but a small one that will have to fight its corner against some real giants.

In those circumstances, he believes it is better not to transfer ownership of the grid, but to leave it as a vertically integrated business that owns generating plants, the grid, distribution network and sells power directly to customers.

The current issue of its newsletter states the ESB board recently approved a new corporate strategy that sets out a plan designed to take the group through to the next decade.

At its heart is maintaining the group as a vertically integrated utility, which presumably means that ownership of the national grid will remain very much where it is.

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