Government opts to float Aer Lingus on Stock Exchange

The Government has opted to float Aer Lingus on the Stock Exchange, although it has refused to disclose when the transaction …

The Government has opted to float Aer Lingus on the Stock Exchange, although it has refused to disclose when the transaction is likely to take place.

Minister for Transport Martin Cullen said last night advisers would "immediately start work on the sale", but said it was not right for the Government to disclose a date for the actual sale.

"It's not for the Government to notionally or artificially pick a date at this stage. The process is now under way, and will be the same as exacted in any company in the private or public sector," he told a press briefing in Dublin.

The Minister said the public would be able to buy shares in the airline, but the heavy marketing associated with the Eircom flotation was unlikely to be repeated.

READ MORE

"I am not going down the route of an all-singing, all-dancing type of approach to this," he said.

The Government has also refused to say exactly what shareholding it will retain in the company. A statement simply said it would keep "at least 25.1 per cent".

There is concern in Government circles that it could find its stake diluted in the future if there is a fresh need for capital. To overcome this the State may retain up to 30 per cent.

Mr Cullen was anxious to emphasise that any sale could deliver more jobs for the airline's staff. "More planes will mean more jobs."

Acknowledging concerns raised by both Siptu and Impact, Mr Cullen said: "We have mandated company management to resolve the key issues raised by the trade unions during the consultation process. I am confident a way forward can be found in which the staff's interests can be addressed and the future of the company can also be secured."

Among the issues to be resolved will be the ability of staff to maintain their current 14.9 per cent interest in the airline. Without specific action, this stake could be diluted to around 4.5 per cent.

Fine Gael welcomed the decision but criticised its timing and handling. Labour and Sinn Féin said the decision was bad for Aer Lingus.

Fine Gael's transport spokeswoman Olivia Mitchell said: "Aer Lingus and Ireland's interests can best be served by facilitating access to capital for the airline, and by allowing it the flexibility to respond in the rapidly changing environment in which the aviation sector operates."

Labour's transport spokeswoman Róisín Shortall said the news made yesterday "a bad day for the company, and a bad day for the country".