Mixed reaction to Government’s decision to sell Aer Lingus stake

ICTU concerned about lack of guarantees on possible job losses and outsourcing

There has been mixed reaction to the news that the government has agreed to approve the sale of its 25 per cent stake in Aer Lingus. Photograph: Getty

There has been mixed reaction to the news that the government has agreed to approve the sale of its 25 per cent stake in Aer Lingus. Photograph: Getty

 

There has been mixed reaction to the news that the government has agreed to approve the sale of its 25 per cent stake in Aer Lingus.

The Irish Congress of Trade Unions (ICTU) said it was concerned the government had failed to achieve any guarantees on possible job losses and outsourcing in Aer Lingus.

Congress General Secretary Patricia King said there are no guarantees that there would be no compulsory redundancies or outsourcing, following an IAG takeover.

“Senior management at the airline will benefit hugely from any sale and that contrasts quite sharply with the failure to provide the rest of the staff with certainty, in relation to compulsory redundancies and outsourcing of existing functions,” said Ms King.

The Dublin Airport Authority, which operates Dublin and Cork airports, welcomed the Government’s decision.

DAA Chief Executive Kevin Toland said: “We believe that this transaction, should it be completed, offers significant potential benefits for both Dublin Airport and Cork Airport.”

“Dublin Airport is already becoming a significant hub for transatlantic travel and this market segment would be further strengthened with IAG as the owner of Aer Lingus. This should enable additional long-haul connections and frequencies into Dublin’s existing transatlantic hub.”

“Dublin and Cork airports currently support and facilitate more than 108,000 jobs in the Irish economy and we believe this transaction will lead to increased employment, as IAG expands its Irish operations in the future.”

The Irish Hotels Federation (IHF) said it welcomed the additional guarantees secured by the Government from IAG in advance of a potential sale of the State’s stake in Aer Lingus.

Stephen McNally, IHF President, said the commitment in relation to Aer Lingus’ Heathrow slots will provide greater certainty for routes into Dublin, Cork and Shannon airports.

“Maintaining strong levels of connectivity with our international markets is of vital importance to Irish tourism and the wider economy. We therefore welcome the guarantees given today by IAG and its commitment to continue service levels from Shannon and Cork airports, which provide crucial tourism and business links directly into the South and West of Ireland,” said Mr McNally.

Niall Gibbons, CEO of Tourism Ireland, has said the deal “represents a huge boost for the tourism sector” in Ireland.

Mr Gibbons pointed to the new connections Aer Lingus would have with American Airlines and the oneworld alliance as a benefit that would “give Irish tourism the benefit of a larger global sales network”.

Sinn Féin Transport Spokesperson Dessie Ellis TD said the deal is a bad one for Ireland in the long term.

“It is very disappointing and I have grave concerns for the effect it will have on Ireland’s connectivity into the future as well as the threat it poses to workers in Aer Lingus and to deferred pension members,” he said.

“IAG have no interest in Ireland and the government have failed to stand up for the interests of the country instead seeking to make a quick profit as an election looms,” he added.

Shannon Group Chairman Rose Hynes welcomed the proposed IAG takeover of Aer Lingus and the Government decision to sell its shareholding in Aer Lingus.

“This decision paves the way for IAG to take over Aer Lingus. It’s good news; it’s a positive opportunity for Ireland, will safeguard the Shannon Heathrow connectivity for seven years and it opens the door to further growth at Shannon,” she said.

Aer Lingus welcomed the decision by Government to support IAG’s proposed offer for the company.

Chairman Colm Barrington said the deal would lead to an increase in jobs at Aer Lingus, the tourism sector and strengthen connectivity to and from Ireland.

“This is a compelling transaction for Aer Lingus, its shareholders, its employees, its customers and for Ireland. Shareholders will realise an attractive return through the premium that the IAG offer provides over the level of our share price immediately prior to the announcement of IAG’s offer,” said Mr Barrington.

“The company will reap the commercial and strategic benefits of being part of the much larger and globally diverse IAG Group and as a member of the oneworld alliance of 17 airlines that together carry over 500 million passengers.

“This access to greater global scale will accelerate growth across our network, enhance Ireland’s position as a natural gateway connecting Europe and North America, give Irish tourism access to major traffic flows and customer loyalty programmes and provide better access for business interests and to cargo flows,” he said.

Trade union Impact, which represents cabin crew, pilots and some ground staff at Aer Lingus said the deal remains bad for jobs, workers and for Ireland’s connectivity and economic development.

“For the staff at Aer Lingus, there are genuine concerns of compulsory redundancies if the deal goes through, along with the prospect of a further erosion of terms and conditions in the inevitable restructuring of the company,” it said.

“Any assurances on the future use of the Heathrow slots will evaporate once the seven-year period has elapsed, after which these vital connection points can be moved to where they will make larger profits for the airline.

“Thereafter, the interests of IAG shareholders will always trump the interests of the Irish economy and the Irish travelling public.”

The Irish Aviation Authority (IAA) welcomed the Government’s decision and said British Airways alone accounted for over 10 per cent of the IAA’s air traffic management revenue during 2014.

Eamonn Brennan, IAA Chief Executive said, “We believe that the proposal as approved by the Government offers significant benefits to Irish aviation, including guaranteed access to London Heathrow from Dublin, Cork and Shannon airports for a sustained period of time. The proposal provides certainty for the future of Aer Lingus.”

Failte Ireland CEO Shaun Quinn welcomed the announcement : “As an island nation, air access is the lifeblood of Irish tourism and today’s developments offer greater certainty regarding Aer Lingus’ long term sustainability and, consequently, the continued growth of our tourism industry.

“I am particularly pleased to note that IAG are committing to an additional eight transatlantic planes based out of Dublin. Given the recent performance of the North American market, this will provide us with the increased access to capitalise on the significant potential to attract even greater visitor numbers from the USA to our shores.”

Employers’ group Ibec said the takeover had the potential to improve air connectivity to Ireland in the future, which would bring with it significant business and tourism benefits.

Ibec Director of Policy and Corporate Affairs Mary Rose Burke said: “IAG’s plan to use Aer Lingus as a springboard for further growth on the key North Atlantic routes could significantly increase the number and frequency of routes to and from Ireland.

Dublin Chamber of Commerce welcomed the decision to support the IAG purchase of Aer Lingus,

Chief Executive of Dublin Chamber of Commerce Gina Quin said: “The decision regarding whether to sell the State stake in Aer Lingus was never going to be easy. IAG has stated an intention to use the acquisition of Aer Lingus as a lever to grow transfer traffic at Irish airports.

“International air connectivity enhances the national economy by facilitating investment, exports, workers, clients and tourists,” Ms Quin added.