Political consensus is IAG Aer Lingus deal can be done

Both Government and Opposition believe sale is possible if last few hurdles are cleared

For a deal that looked to be a non-runner a few weeks ago, the potential sale of the State's stake in Aer Lingus to International Airlines Group (IAG) is on again, albeit with a few significant hurdles left to clear.

The consensus in Leinster House – on Government and Opposition benches – is the deal is there to be struck with IAG chief Willie Walsh.

One Fianna Fáil source, upon reading Minister for Transport Paschal Donohoe's statement after yesterday's Cabinet meeting, said it was a "slam dunk".

A bit like the union official who said there was much excitement among the airline’s staff about a possible deal, the language might be a bit of a stretch but the sentiment was common in political circles.


10-year guarantee

The main stumbling block now is whether the 10-year guarantee on the Heathrow slots being sought by the Coalition is too far for Walsh. He was clear in his briefing to the Oireachtas Transport Committee that there would be no improvement on his opening offer of five years.

While Coalition sources insist they will not accept seven years, there may be a gap between both sides which can be bridged.

The major developments have come over the past week or so, with a shift in Labour attitudes towards doing a deal and the suspicion the Aer Lingus unions may be up for a deal too.

At the weekend, Myles Worth, the secretary of the airline's Central Representative Council – an Irish Congress of Trade Union grouping of the company's unions – first expressed his enthusiasm in an email to Stephen Kavanagh, the incoming Aer Lingus chief executive and followed up with an interview on RTÉ radio.

Although he was later reined in by other officials, the suspicion on the Labour side was that Worth was testing the waters for somebody.

A number of Ministers began to privately express concern the Labour Party could be left exposed if it objected to the sale and unions such as Siptu and Impact struck a deal with Walsh.

TDs and Ministers say the unions will do a deal if they feel it is in their members’ interests, and will use the politicians to get what they want if needed.

One Minister said Labour still felt raw over the 2006 privatisation of the company, which it opposed and the unions eventually accepted.

“We don’t want to be left out on a limb by the unions. If they feel a deal is in the best interests of their members, they will support it and we have to be aware of that.

“There is a sense that some people are doing what they believe Labour should do, but we don’t want to be heroes for the unions.”

Union rivalry

One deputy said a key factor would be if Impact and Siptu members began urging Labour TDs to accept any deal. The rivalry between Siptu and Impact at Aer Lingus was cited by one source as something of which Labour should be wary.

Ultimately, if the unions go for it so will Labour and a senior party source yesterday acknowledged: “For the most part this depends on the workers.”

“[It’s] far from universal but if a better deal with stronger guarantees could be hammered out, that would appeal to some of ours.”

Public sentiment towards the company has also changed and even Opposition northside Dublin TDs acknowledge the Irish connection to the Aer Lingus brand is not what it was.

A Fine Gael minister last week privately said the public liked Walsh and saw no problem with selling, and a party backbencher in the midwest last night accepted a sale was likely.

Many concerned northside Labour TDs say their main concern is jobs and if IAG can address those worries and move from its position on the Heathrow guarantees, a deal is a real possibility.