There seems to be no end to the difficulties facing Aer Lingus. The State airline has been hit by the foot and mouth crisis, the downturn in the US, bitter industrial disputes, inter-union rivalries and sexual harassment charges against it chief executive, which have now led to his departure. Against this background, the decision by the Minister for Public Enterprise, Ms O'Rourke, to put the prospect of a trade sale of the airline on the agenda is difficult to understand. There are important issues to be tackled by the Government, as the main shareholder, before Aer Lingus can be sold.
Strong leadership of the company is urgently required. Following the outcome of the investigation into allegations against its chief executive, Mr Michael Foley, the board is clearly facing the challenge of rebuilding a strong and united management team. Aer Lingus at the moment has no long-term chief executive (the chairman, Mr Bernie Cahill, is to fill the position temporarily) and no human resources director, hardly an ideal situation given the problems it faces.
It will require an imaginative approach to get the company back on the right path. Normal industrial relations appear not to apply at the state airline. But further crippling stoppages to normal services simply must not happen, if the airline's future is not to be further compromised. And the bitter rivalry between different unions in the company - particularly IMPACT and SIPTU - must not be allowed to cause more damage.
This Government - indeed successive governments - must share some blame for allowing this situation to develop. Like many other state companies, Aer Lingus has had politically appointed boards, interfering ministers and a somewhat confused mandate. It has had an extraordinarily rapid turnover of chief executives in recent years, with the inevitable impact on the company's fortunes; the progress which was made in turning the airline back from the brink of insolvency in the early 1990s is now under serious threat.
The ownership structure of Aer Lingus is likely to change over the next couple of years. Even if the company got back into rising profitability, retained earnings would not pay for plans to develop the fleet and expand as part of the OneWorld alliance, which has linked Aer Lingus with a group of leading international airlines. Under EU rules, the Government cannot invest any more cash. The plan had been to float the company on the stockmarket. Market conditions and poor investor sentiment towards the airline sector had already undermined this strategy, even before Aer Lingus hit its current problems.
For this reason, the Government has asked its advisers to look at the option of a trade sale - in other words selling off all or part of the company to another airline or a financial investor. However there are problems in doing this. A bilateral agreement with the US means that 51 per cent of the airline must remain in Irish hands. There may be ways to get around this, but it is a barrier to a sale of more than a minority stake to a foreign investor.
There will also be political calculations for the Government . The large airline workforce might react badly to a sale, while it could also have implications for the service to Shannon, which is currently stitched in to the bilateral treaty with the US. The biggest issue, however, is that anybody buying Aer Lingus with its current difficulties will want to do so at a cheap price. The Government, as the current main shareholder, must ensure that these problems are tackled, before contemplating any sale of its stake.