Union representatives at Aer Lingus are proposing that the pension fund of airline staff be used to buy a significant number of shares in the carrier, possibly up to 6 per cent. The move comes as the Government grows in confidence that the €1.4 billion Ryanair bid can be blocked, write Emmet Oliver and Jamie Smyth in Luxembourg
Union officials this week began discussions in private about using the Irish Airlines (General Employees) Superannuation Scheme as a way to purchase several million shares. A meeting last night of union shop stewards at Dublin airport is believed to have discussed the idea further. However, the scheme is used by staff from three companies and this could pose major difficulties.
Meanwhile trade union Impact has denied it asked Sir Anthony O'Reilly to take over as Aer Lingus chairman. The union's spokesman last night said such suggestions were "rubbish" and it had not approached any business people to replace chairman John Sharman. It is understood Sir Anthony has no interest in serving.
If a major share purchase is to take place, a unanimous vote of the scheme's trustees will be needed to make such a purchase; but earlier this week a similar body belonging to the pilots' pension scheme agreed to buy 9.5 million shares at a cost of €30 million. Based on this, the main pension scheme would have to spend approximately €90 million to get a 6 per cent stake. The shares are likely to prove costly to buy, however, with Aer Lingus closing at €2.90 last night, down 1.6 per cent.
The complicating factor is that the airline's superannuation scheme is a multi-employer scheme, paying benefits to staff from the Dublin Airport Authority and SR Technics, the aircraft maintenance firm. Sources have confirmed that representatives of these staff have been sounded out on the idea.
Meanwhile, Minister for Transport Martin Cullen has expressed confidence that Ryanair's bid will not be successful. Speaking in Luxembourg after a meeting of EU transport ministers, Mr Cullen said he was confident the Government's policy of maintaining a two-airline strategy would be preserved despite Ryanair's surprise bid for Aer Lingus.
He said Government officials would meet European Commission officials next week to outline their objections on competition grounds to Ryanair's bid.
He said he could not reveal any other ways that the Government could act to stop Ryanair due to a complaint issued against him by the airline last week to the Irish Takeover Panel.
One competition law expert in Brussels suggested that the Government's request for a meeting with the commission could just be "optics" for a domestic audience as the EU could not investigate any proposed merger until it is notified of it by Ryanair.
Asked if he had full confidence in Mr Sharman following reports that he might be replaced, Mr Cullen replied: "I have great confidence in the board and the company to see this through."
It is understood some union officials favour bringing in another chairman, including either Seán FitzPatrick of Anglo Irish Bank or Sir Anthony O'Reilly of Independent News and Media. While some approaches have been made, the Government is the key player in the appointment of any chairman.
The Minister also defended his handling of the Aer Lingus flotation and he accused Opposition politicians of "getting over-excited" about the issue. "There is a lot of hot air and political commentary but, from my perspective, I am absolutely confident in the decision taken by me on behalf of the Government," said Mr Cullen.