OF ALL the arguments made in favour of the privatisation of Aer Lingus, the most persuasive was that the airline would no longer be a burden on the State and vice versa. By selling the airline, it was claimed, the Government would ensure the carrier received the investment it needed to stand on its own and also the commercial freedom to succeed in one of Europe's most competitive aviation markets.
By the same token, if the airline failed to prosper it would no longer have any claim - either emotional or legal - to State support. It now looks certain that - one way or another - the truth of some or all of these propositions will be tested over the coming months.
Aer Lingus has just announced losses of €22.3 million for the first half of the year and is predicting that it will, at best, break even in the second half. The increase in the price of jet fuel has combined with the economic slowdown in the airline's main markets to wipe out the positive impact of savings and growth achieved since flotation.
The airline's management have already announced a number of remedial measures such as cutting flights and delaying deliveries of new aircraft. They have also signalled a fresh round of cuts will be necessary, with a figure of €100 million in savings being touted. Aer Lingus has already aped many of the revenue driving measures pioneered by its low-cost rivals - such as charging passengers for baggage. Cost cutting of the magnitude now being contemplated is the next logical step. It will bring Aer Lingus' cost base closer in line with the likes of Ryanair and Easyjet.
Doing so will involve significant changes in work practices and probably job losses. It remains to be seen if the Aer Lingus staff will wear any further erosion in what are still, by low-cost airline standards, very inflexible working practices and expensive pay grades and rates.
But with the airline industry as a whole facing a very tough winter, the prospects of a deal are reasonable. And if Aer Lingus can achieve these savings then the medium-term outlook for the airline - which remains financially strong with over €800 million in the bank - is positive.
The priority now for Aer Lingus is survival, but given the upheaval that is predicted in the industry in the coming months, the issue of the viability of Aer Lingus as a small stand-alone carrier will inevitably come to the fore. That is a bridge the company can cross when it comes to it.