Madam, - We need to be more realistic and avoid ostentatious sesquipedalian circumlocution on the future of Aer Lingus.
The arguments in the media on this topic centre on the two issues of ownership of the airline and its designation as a low-cost airline. Ireland already has a very successful low-cost airline; should Aer Lingus continue along a similar business model, one possible outcome from the competition could be a merger or takeover, as only one will survive in the intensively competitive and cyclical aviation market. Neither the EU's Competition Directorate nor the Competition Authority would be likely to give a seal of approval to any such outcome.
The ownership of Aer Lingus, however, is really about ownership of co-specialised assets, assets that are more valuable together than apart. They are the landing slots at Heathrow airport and the transatlantic landing rights, which will become more valuable under a future EU-US "open skies" policy. When the deliberations on ownership are about private vs public, it is difficult for the Government, as principal shareholder, to prove that it is acting impartially, attempting to maximise the shareholder value.
And this is more acute when private ownership is presented as being preferably to an entity of uncertain economic value going forward under public ownership. But it is only by divesting the worst-run State-owned enterprises that the greatest potential economic gains come from private ownership. Aer Lingus is profitable and has good economic prospects. Therefore, by recasting the ownership of Aer Lingus in terms of the ownership of its co-special assets it should be less difficult for the Government to endorse the public ownership, at this juncture, of a well-run, efficient State airline. It is, as Aristotle observes in the Rhetoric, a matter of putting one's "hearers, who are to decide, into the right frame of mind". - Yours, etc.,
PATRICK McNUTT, Former Chairman of the Competition Authority, Blackrock, Co Dublin.