Cabinet to discuss future of Aer Lingus

Proposals on the future of Aer Lingus are to be discussed shortly by the Cabinet, the Minister for Transport, Mr Brennan, told the Dáil.

He said he had recently received a report on future options for the company from its chairman. "The company's view is that a private-sector investments process should be initiated without delay," he added. "I am considering that report carefully and I will bring Aer Lingus's views, together with my own position, to Cabinet in the coming weeks."

The Minister was introducing the Aer Lingus Bill, 2003, giving effect to the employee share-ownership plan agreed by the Government and Aer Lingus unions. The Bill also includes an enabling provision for the establishment of new pension schemes by the company for employees and pensioners.

Mr Brennan said that the events of September 11th, 2001, had greatly exacerbated an already difficult trading position in the company, resulting in near-bankruptcy. Faced with this crisis, the Government had decided to facilitate private-sector and further staff investment in the company. "I want to acknowledge that it was the quick action to cut costs and stem losses, with the co-operation of staff, which resulted in the survival of the airline," he added.

The company had made a remarkable recovery and return to profitability, said Mr Brennan, adding that it was better placed now to withstand competitive pressures.

He was examining a proposal for upgrading the European fleet. "This will see the airline's transition to a single short-haul fleet aircraft type for its European operation with the acquisition of 17 new Airbus A320 aircraft," he added.

The Fine Gael spokesman on transport, Mr Denis Naughten, said there had to be strategic thinking in deciding on the future control of the company.

"While there may have been merit in the past to the sale of Aer Lingus, from the point of view that the company was inefficient and a burden on the State, now that the airline is competing successfully in an open market, we must question why privatisation is being considered," he added.

They were all aware, said Mr Naughten, that the likely purchaser of the company was British Airways, and that the airline could make more money by reallocating Aer Lingus's valuable slots at Heathrow to its long-haul services out of London at the expense of crucially important access to and from the State via London's principal airport.

"Any decision on the sale of such an asset must be made by this House, on behalf of the taxpayer, and not solely by the social partners," said Mr Naughten.

The Labour spokeswoman on transport, Ms Róisín Shortall, said her party was opposing the Bill because it gave the Government power to privatise Aer Lingus without any economic case being put forward or a proper debate in the House about the future of the company.

She was sure, she said, that the Minister knew the name or names of the buyer waiting in the wings. "He should tell us who the predators are who want to get a share of it," she said.

The Sinn Féin spokesman on transport, Mr Seán Crowe, said the Bill was "an act of ideological vandalism" to enable the Government privatise the airline.

Earlier, on the Order of Business, the Fine Gael leader, Mr Enda Kenny, said the Government should produce a White Paper on the issue before the committee stage of the Bill was debated.

Supporting the proposal, the Labour leader, Mr Pat Rabbitte, said the Bill was an irrevocable step towards the privatisation of the airline, probably in a trade sale.