Aer Lingus is extremely anxious that its stock market flotation occurs in November but the chances of this happening are receding by the day. The Minister responsible, Ms Mary O'Rourke, knows that such a timetable would require enabling legislation to be hurried through the Oireachtas in October. She also knows, that at present, the market debut of the airline falls some way short of being a Government priority.
Companies heading to the stock market, like certainty and there is relative certainty in the market at the moment. Aer Lingus, as it is, will be valued at about £500 million and a further £200 million will be raised by the sale of new shares. This will be a modest flotation; much smaller than the Eircom one. Consequently, there will be no need for a hard-sell campaign such as accompanied the Eircom float. If the price of the shares is pitched right - and that is crucial - the flotation should be a success.
If Ms O'Rourke doesn't get her legislation through in October, then the flotation will have to wait until well into the new year because audited accounts for 2000 will have to be prepared. By that stage, there could be a new government which may have more urgent matters to address. And nobody can be certain what the condition of the stock market will be next year. Small wonder that Aer Lingus is pushing vigorously for a flotation this year.
Air traffic growth projections, boosted considerably by joining the One World Alliance, necessitate a larger fleet. In addition, Aer Lingus has too many leased aircraft. Leases may obviate the need to raise the purchase price but they cost more to operate. The financial crisis that the company went through has manifested commendable improvements on the cost front but airline profitability is notoriously cyclical and Aer Lingus needs to be as lean as possible before the next downturn comes.
The November flotation is at risk from matters other than the Government's legislative priorities. The pilots are demanding that 15 per cent of the shares be set aside for an employee share option scheme to add to the five per cent that the staff already owns. Ms O'Rourke has insisted that only 9.9 per cent will be set aside, and she is right. She should stick to her guns. The open war between cabin crew staff and their trade union, SIPTU, could also delay matters. The cabin crew argue that they have been badly served by SIPTU and want to change unions and SIPTU's handling of the issue has simply made them more determined. The cabin crew can obstruct the flotation until they get what they want; they have nothing to lose.
And then there is matter of the Tuskar Rock crash. The withholding of airworthiness records shows that not everything was done by the book for the St Phelim. Depending on the outcome of the new inquiry, there may be a claim against the airline. The certainty so beloved by Aer Lingus management seems a long way off at the moment.