Airlines

Published on June 2nd, 2015 | by Jim Lee

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Government wins vote on sale of shareholding in Aer Lingus – a look at the background

Minister for Transport Paschal Donohoe  (IMG1755 JL)

Minister for Transport, Tourism and Sport, Paschal Donohoe.

On 28th May, the Dáil voted by 74 to 51 to accept the Government’s motion on the sale of its 25.11% shareholding in Aer Lingus to International Airlines Group (IAG). This followed a two day debate, introduced by the Minister for Transport, Tourism and Sport, Paschal Donohoe. on 27th May, when he moved the following motion: “That Dáil Éireann, pursuant to section 3(5) of the Aer Lingus Act 2004, approves the general principles of the disposal of shares in Aer Lingus Group Plc by the Minister for Finance in accordance with section 3(2) of the Aer Lingus Act 2004, which were laid before Dáil Éireann on 27th May, 2015”.

While the opposition said that the debate was “rushed”, it was the culmination of a process which began 18th December 2014, with an announcement (see here) by Aer Lingus, following media speculation, that it had received a preliminary, highly conditional and non-binding approach from IAG on 14th December 2014, which constituted an offer for the Company. The airline issued ‘possible offer updates’ on 26th January, 27th January and 13th February. These updates included a revised share price (€2.55) and revised terms. By 26th May and much discussion, Aer Lingus published IAG formal ‘Recommended Cash Offer’ document (which can be found here).

Offer considered by the Joint Committee on Transport and Communications

In addition to the Dáil debate, the offer was considered by the Joint Committee on Transport and Communications. They engaged with a range of stakeholders over five days, in order to establish the likely repercussions of any potential sale of Aer Lingus to IAG. During their deliberation, they heard the views on a wide range of witnesses and received a number of documents as follows:-.

Captain Evan Cullen (Irish Airline Pilots Association), Mr. Matt Staunton (IMPACT). Mr. Myles Worth (Representative Council of union groups in Aer Lingus), Mr. Owen Reidy (SIPTU), Mr. Ian Talbot (CEO [chief executive officer], Chambers Ireland), Mr. Conor Healy (CEO, Cork Chamber of Commerce), Ms Gina Quin (CEO, Dublin Chamber of Commerce), Dr. Orlaith Borthwick (CEO, Limerick Chamber of Commerce), Ms Helen Downes (CEO, Shannon Chamber of Commerce) and Mr. Patrick Edmond (Shannon Group plc) all on 29th January. The committee also received a document from Ireland West Airport Knock.

Mr. Emmet Oliver and Mr. Kieran Donoghue, (IDA Ireland), Mr. Niall O’Donnellan (Enterprise Ireland) Dr. Neil Walker and Ms Mary Rose Burke and Dr. Neil Walker (IBEC), Mr. Stephen McNally and Mr. Tim Fenn (Irish Hotels Federation) and Mr. Adrian Cummins (Restaurant Association of Ireland), all on 3rd February. The committee also received a document from the Irish Tourist Industry Confederation, ITIC and a significant number of communications from members of the public.

On 12th February, Mr. Willie Walsh, Chief Executive of IAG accompanied by Mr. Finbarr Griffin, appeared before the committee. Mr. Griffin was required to attend with the IAG CEO under takeover panel rules and during his introduction, Mr. Walsh referred to him as his “chaperone”.

On 17th February, it was the turn of Aer Lingus and Stobart Air. Aer Lingus was represented by Mr. Colm Barrington (chairman), Mr. Stephen Kavanagh (CEO), and Mr. Eduard van Wyk (Goldman Sachs), while Stobart Air (Aer Lingus Regional), was represented by Mr. Sean Brogan (CEO) and Mr. Peter O’Mara (Business Development Director).

Finally on 2nd April, the committee heard from two representatives from Virgin Atlantic Airlines: Mr. Joe Thompson (Director of Network and alliances) and Mr. Dave Hodges. The appearance of the Virgin executives followed correspondence with the committee. They had particular views on connectivity, as each year more than 500,000 passengers travel between Ireland and long-haul destinations, connecting at a UK airport. Approximately 100,000 of these use Virgin Atlantic long haul services. They made it clear that they were not participating in the process as a potential partner, nor were they considering the acquisition of Aer Lingus.

Apart from making presentations, each of the witnesses were subject to questions by members of the committee, chaired by Deputy John O’Mahony. It members are; Deputies Timmy Dooley, Brendan Griffin, Dessie Ellis, Eamonn Maloney, Helen McEntee, Michael Fitzmaurice, Michael McCarthy, Noel Harrington, Patrick O’Donovan, Seán Kenny, Tom Fleming and Senators Eamonn Coghlan, Paschal Mooney, Sean D. Barrett and Terry Brennan. In addition a number of Deputies and Senators, not members of the committee, took part in the proceedings.

Much of the ground covered was rehashed in the subsequent Dáil debate and is considered below. Much of it split was along party political lines as well as on ideological positions, and while the debates generated much heat, they provided little light!

The Dáil debate – the Government’s perspective

Dail Chamber

On 28th May, the Dáil voted by 74 to 51 to accept the Government’s motion on the sale of its 25.11% shareholding in Aer Lingus to International Airlines Group (IAG).

Opening the debate, Minister Donohoe, emphasised three factors, which he said, had “been decisive” in his evaluation of the IAG proposal.

  • Firstly, the airline industry is inherently cyclical and has been severely impacted in the past by a number of global shocks such as 9/11 and the 2008 financial crisis. While it is currently in its fifth consecutive year of positive global airline profitability as a relatively small albeit currently well capitalised airline, Aer Lingus is dependent on the capacity decisions of its larger competitors and may be more vulnerable to future industry shocks or aggressive direct competition than the larger airlines.
  • Secondly, the European airline industry remains relatively fragmented compared to the USA. Many of the European legacy carriers have been forced to implement significant restructuring plans in recent years. This has also driven consolidation amongst European airlines with many formerly State-owned airlines either becoming part of larger groups or having failed. The Minister said he did “not want to leave it to chance only to find that it is a forced decision in difficult times”.
  • Thirdly, Aer Lingus is no longer the national flag carrier. That decision was taken nine years ago when 75% of the shareholding was sold (by the current opposition). Nor is the State the majority shareholder in the company having just 25.11%.

He went on to say that the State had little or no influence today in relation to the company, although it could, with the support of others, prevent the disposal, if not the transfer, of the Heathrow slots. He noted that in 2012 the Government decided, in the context of the State asset disposal under the EU-IMF programme, that the State’s 25.1% shareholding in Aer Lingus could be sold on terms and at a price that were satisfactory. Subsequently in June 2012, Ryanair indicated its intention to make an all-cash offer of €1.30 per share. The Minister said that “for a number of reasons, this was unacceptable to the Government”. No other bidder has emerged to date. While IAGs initial proposals were rejected, the board of Aer Lingus indicated to IAG in January 2015, that it would be willing to recommend the financial terms of a proposal based around a share price of €2.50. An inter-departmental steering group, which was established when the Aer Lingus shareholding was included in the State asset disposal programme, was asked to review the potential sale. The group was chaired by the Department of Transport Tourism and Sport and included representatives from the Department of Finance, the Department of Public Enterprise and Reform and NewEra (part of the National Treasury Management Agency). NewERA engaged expert external financial advisers, Credit Suisse and IBI Corporate Finance, and legal advisers, McCann FitzGerald, to assist the steering group in its work. The group engaged in intensive work over the last few months and it recommended that the Government should accept the IAG offer. The formal decision was taken by the cabinet at its meeting on 26th May.

The Minister went on to outline the terms of the agreement. Apart from a cash payment of €2.50 per share and the payment of a cash dividend of 5 cent per share (payable in any event to shareholders on 29th May), the offer is subject to a number of conditions including the receipt of EU merger clearance of the transaction on terms satisfactory to IAG. The Aer Lingus group will not change its name and Aer Lingus will also maintain its head office in Ireland. The agreement also requires the passing of a number of Aer Lingus shareholder resolutions to approve the provision of the connectivity commitments to the State. The company will also continue to operate all its scheduled international air transport services under the Aer Lingus name. The agreement also requires the making of amendments to the Aer Lingus articles and the re-designation of one Aer Lingus share held by the Minister for Finance as a ‘B Share’. All of these measures are necessary to implement the connectivity commitments offered by IAG. It is also subject to the Minister for Finance accepting the offer, a condition IAG may not waive, and to Ryanair accepting the offer, a condition IAG may not waive unless Ryanair’s shareholding is 5% or less.

In relation to Heathrow, commitments are being given that for at least seven years post-acquisition, that all Aer Lingus’ current winter and summer daily scheduled frequencies on routes between Heathrow and Dublin, Cork and Shannon will be maintained. In addition, all of Aer Lingus’ other London Heathrow slots will be operated on routes to and from Ireland in the first five years. Heathrow accounts for approximately 8% of air transport seats, by destination, from Dublin. In comparison, the next largest hub airports are Paris and Amsterdam, which account for about 3% and 2% of air transport seats, respectively. The Heathrow route accounts for just under 20% of passengers at Cork Airport and nearly one quarter at Shannon.

In addition, for the 2016 summer season, two new transatlantic destinations can be added. By 2020 four transatlantic routes will be in place, delivering up to 2.4 million additional passengers. This will enable Ireland to become an important hub for European traffic across the Atlantic. As part of the north Atlantic Joint Business with American Airlines, Iberia, British Airways and Finnair, Aer Lingus will benefit directly from the sales and marketing of the bigger group, in particular in the United States. In addition, Aer Lingus’ planned long haul growth will benefit from being part of lAG’s global cargo network and customer loyalty unit, Avios. IAG plans to sustain and grow business at Cork, Shannon and Ireland West Airport Knock and have, in particular, referenced the Cork-Amsterdam and Cork-Paris routes, the transatlantic routes from Shannon and the Knock-London route.

The Minister has been assured that growth opportunities with tourism and business interests in the Munster region will be pursued to exploit the potential that exists in all the short haul routes currently operated by Aer Lingus from Cork. For example, IAG has a strong presence in Paris with 56 daily flights, 45,000 active frequent flyer members and a strong sales force. Aer Lingus has also indicated that a combination with IAG would also underpin a new Cork-Germany service, which will be announced shortly. In Shannon, IAG will consider options, including Aer Lingus codeshare and accepting customers originating from Shannon that could enhance existing all-business British Airways two daily services from London to JFK via Shannon. Existing flights to Boston and New York are expected to be strengthened as a result of the company becoming part of the North Atlantic Joint Business. Aer Lingus support for existing American Airlines flights to Philadelphia will provide opportunities for additional capacity and increased connectivity to the US. In addition to the Gatwick route becoming more sustainable, Aer Lingus will also actively work with Knock airport to explore new growth opportunities that will be available as part of the IAG group.

Finally, the Minister noted that IAG has confirmed that the existing employment rights of Aer Lingus employees will be fully safeguarded upon completion of the offer, that it will honour its collective agreements. It is also prepared to confirm that it will re-register existing registered employment agreements, REAs, under the new legislative framework when introduced. This was also confirmed by the CEO of Aer Lingus by letter to the Minister. The letter stated that Aer Lingus considers that having clear registered employment agreements that safeguard the respective interests of employees and the company is mutually beneficial. In addition, Aer Lingus has committed to expanding the scope of REAs, where appropriate, to include staff groups not covered by the current agreements. The letter also indicates that Aer Lingus will engage in a process of consultation governed by agreed structures, with staff and its representatives, when any restructuring is required and that it does not foresee a likelihood of either compulsory redundancy or non-direct employment. Aer Lingus’ current collective agreements provide for flexibility and mobility throughout its workforce without unduly restricting other possible approaches. On the contrary, the assessment is that in the coming year alone, there will be net employment growth of approximately 150 jobs. By 2020, growth in Aer Lingus could lead to the creation of up to 635 new highly skilled jobs, including over 400 pilots, as well as engineers and ground staff.

The Government’s financial advisers have concluded that a price of €2.50 is acceptable, which will generate approximately €335 million, for the State. The offer represents a premium on the share price on the day prior to the announcement of lAG’s initial approach and the Aer Lingus initial public offering price of €2.20 in 2006. Prior to the IAG approach, the Aer Lingus share price had not traded at this level since late 2007. It also compares favourably to the offers made by Ryanair.

The Minister concluded by listing the five key reasons why the deal should be accepted:-

  • Firstly, it will strengthen the competitive position of Aer Lingus and reduce the risk the company faces. It provides the company with an opportunity within a larger group to grow and face challenges in a changing aviation environment.
  • Secondly, it will give greater certainty around connectivity with Heathrow Airport and strengthen the guarantees around the disposal of slots and, furthermore, provide new guarantees around slot use. It allows the Minister for Finance, in consultation with the Minister for Transport, Tourism and Sport, to object (via the ‘B share’) to any proposed disposal of Heathrow Airport slots, any proposed cessation of the operation of Aer Lingus Heathrow Airport slots on certain Irish routes for a specified future of at least seven years.
  • Thirdly, it will promote Ireland’s wider connectivity and bring growth to Irish airports and it is anticipated it will bring benefits to the Aer Lingus long-haul and short-haul networks with IAG as well as having a focus on sustaining and growing routes from Dublin, Cork, Shannon and Knock airports.
  • Fourthly it will create net employment, there will be some changes certainly, but it is envisaged that by the end of 2016, 150 new net jobs will be created in Aer Lingus, rising to a total of 635 new net jobs by 2020.
  • Fifth and most importantly the agreement protects the Aer Lingus brand and keeps its head office in Ireland.

Aer Lingus shareholders

A breakdown of the current Shareholders of Aer Lingus

Other options?

Before looking at the contributions of the opposition, it must be said that most of the contributions were based on fear, exaggerations, a harkening for the past, a lack of knowledge of the current industry and ideological and party political stances. That said, it is only fair to point out that Flying in Ireland, has expressed the view in the past that the big mistake was made with the original privatisation of Aer Lingus and the subsequent acquisition by Ryanair of 29.82%. We have also consistently expressed the view (and as with all things, it is only a view), that the takeover of Aer Lingus by Ryanair, would not be in the countries interest, let alone Aer Lingus. So therefore this writer is not a neutral spectator, having a generally positive view of the IAG offer. Readers, who think they are a neutral spectator, should ask themselves the following questions.

  • Did you think that the state should have sold a majority stake in the first place and if not should the state seek to regain a shareholding of at least 51%?
  • Do you think that the state should retain its existing 25.11% and if so to what purpose?
  • If neither of the above and you are in favour of a sale, if not to IAG, then to whom, Ryanair?
  • Looking at other possible options, and bearing in mind that there have been no other bidders to date, and only been a limited interest by Etihad Airways (4.99%), would they or another Middle Eastern carrier (Qatar/Emirates), if one emerged, be a better fit? Would Lufthansa or Air France/KLM be any better? Is there any other viable option?
  • Is it the particular details of the IAG that you find unacceptable?

One notable feature of the contributions in the debate and during the committee proceedings was that there seemed to be no appetite for the acquisition of Aer Lingus by Ryanair.

The Dáil debate – the opposition’s perspective

The Dail

Deputies Timmy Dooley, Dessie Ellis, Micheál Martin, Clare Daly, Finian McGrath, Shane Ross and Ruth Coppinger all contributed to the Dáil debate.

First up was Fianna Fáil’s spokesperson on Transport, Tourism and Sport, Timmy Dooley, who represents Clare. His first point was the haste with which the Government was moving; he wanted more time, more debate and a further referral to the Joint Committee on Transport and Communications. He said he “could never really get my head around the necessity, from the Minister’s perspective, to sell the remaining 25% stake.” He added that decision taken in 2006, “to change Aer Lingus’ semi-State status and trade it publicly, thereby ensuring it would be run on a commercial basis in the best interest of all, including workers, passengers and the country”. He could not understand how the Government had “failed to realise the importance of retaining the shareholding and having control, although not absolute control, over the direction of the company, or an input into it”. He was also sceptical of the concept of the ‘B share’ and was at a loss to know how, that “one share, ….. will somehow have attached to it all the rights, responsibilities and benefits as obtained previously, with the exception of profit and voting rights.”

His view was that “the current growth trajectory of the company is such that remaining an independent carrier would not be the tragedy some proponents of this deal have depicted”. Could Aer Lingus “through strategic alliances and various other corporate tie-ups” not be “an entity” as big as Ryanair or easyJet, he asked. Noting that IAG has a strategic partnership with American Airlines that works really well, he said he could see the retention of an independent airline with a strategic tie up with somebody like IAG or somebody else, (only snag with that is it is not what IAG wants). He noted that Aer Lingus’ passenger numbers have grown remarkably, with growth “concentrated on the north of England”. This he said “has effectively highlighted the weakness of British Airways’ approach to the regions. Senator Sean Barrett (during the committee hearings) has made much of the fact that the entire north of England and Scotland have no direct access to the United States, even though British Airways is the dominant player in that market. It has routed every flight through Heathrow. There are some concerns that it may wish to do the same with Irish passengers.” No mention by him of the significance, or effects of, the UK’s Air Passenger Duty (APD) or that IAG are the number one partner that Aer Lingus has in respect of its transfer traffic. Willie Walsh has also confirmed that of BA’s 314 daily slots, 49 are domestic and 180 are to European destinations.

On the share price, he quoted Pádraig Ó Céidigh, “an expert in this area having founded Aer Arann and a serial investor in a range of sectors”. He believes that the share price “should be in excess of €3”, which would give the company a valuation of about €1.7 billion. Mr. Dooley claimed that the 24 Aer Lingus Heathrow – London slots are worth a possible €400 million and acquiring these slots would give IAG 55% of all the slots at Heathrow. He believed that the takeover deal was anti-competitive and bad for consumers and said that Virgin Atlantic seems to be of the same view. It is (he understood), in the process of lodging a complaint with the EU competition authority. Although he accepted that “the trend in the aviation sector is toward consolidation”, he went on to say that “these trends have come and gone. We have previously seen consolidation in the aviation sector. Large companies emerge, enter financial difficulty and sell off bits and pieces of the company at a later stage”. “Consolidation and fragmentation of corporations throughout history has been cyclical” he added, and should we see fragmentation at some point, he had fears for Aer Lingus.

Connectivity and Regional connectivity in particular was the one area which he had the greatest concerns from the start, “having seen the difficulties that emerged when Aer Lingus decided to re-allocate slots to Heathrow from Shannon to Belfast in August 2007”. He neglected to note two things. The first was the decision by Shannon to give Ryanair more favourable rates which led to the move and secondly that it is passenger numbers, not numbers of routes that ensures connectivity. He also blamed management for the decision, somehow assuming the board, would not have gone ahead with what was a largely commercial decision. He went on to attack those who were supporting the proposed sale to IAG; particularly the Chambers of Commerce, who he said had a conflict of interest, as Aer Lingus, is a member and a very significant partner.

Most of all, Deputy Dooley could not accept any of IAG’s guarantees, be they on jobs, slots, routes or connectivity. His general belief seemed to be that IAG would dismantle Aer Lingus, shed jobs and funnel passengers to Heathrow. He quoted the Nyras report, commissioned to look at potential cost savings by benchmarking Aer Lingus with low cost airlines such as easyjet and Vueling Airlines, which he said, found “that costs in Aer Lingus were about 40% higher. It estimated that savings of 20% could be made in ground handling operations, 40% in catering services, 15% in maintenance and 25% in heavy maintenance operations in moving operations to Eastern Europe”.

Sinn Féin’s Dessie Ellis was next. He claimed that he had not been “furnished with proper documents” and that the Government had “made its decision behind the closed doors”. “Aer Lingus is worth infinitely more to Ireland than the €335 million the Government will get for cashing in on the 25% Fianna Fáil left the State with after its calamitous reign” he noted. “Aer Lingus is facing into an uncertain seven years which very possibly will be its last, certainly as we know it. It will also be a very uncertain time for the thousands of workers who make their living in Aer Lingus or peripheral to Aer Lingus’ operations in Ireland” he added. He said that job guarantees and promises of no compulsory redundancies are of little consolation to the workforce. “What about the future? Is it all right that future employees will have less favourable employment conditions and wages? Will outsourcing take place” – Rhetorical questions from his perspective.

He too, did not believe in the IAG assurances, noting that, IAG “is a private for-profit operation with only two interests – its bottom line and its shareholders, of which Ireland is not one”. Aer Lingus has he said “provided connectivity and good jobs. Under this deal, sooner or later that will be a thing of the past and Aer Lingus, as we know it, will only be a memory”. He went on to (wrongly) quote the example of Iberia, where jobs were lost “without batting an eyelid and IAG has carried on regardless making huge profits for its shareholders at the expense of the Spanish state which had to help the 4,500 workers to pick up the pieces”. Again, wrongly quoting Willie Walsh, CEO of IAG, he said “he had frequently made clear what his intentions are for companies such as Aer Lingus that has vital slots at Heathrow Airport”. Quoting an interview with ‘The Independent’ last May, he noted Mr. Walsh’s comment that “Where the UK will lose out is that Heathrow will not be able to service the new, booming destinations in the developing markets of the Far East, Africa and Latin America. We just won’t have the slots at Heathrow”, it was a quote out of context.

He went on to attack Stephen Kavanagh, CEO of Aer Lingus, “who supports the deal and will be handsomely rewarded for his shares”. He concluded; “These slots at Heathrow are crucial to the importance of Aer Lingus to Ireland. They provide excellent connectivity with one of our main sources of trade, which is one of the major concerns, after job security, people have regarding this sell-off. The Government will get just over €300 million for its 25% stake, which is less than the value of the Aer Lingus Heathrow slots alone. If IAG decide to sell Aer Lingus or to wind up the company who knows what will happen to these wafer thin assurances the Government is heralding”. He too quoted Senator Barrett, a transport economist turned politician, who said “We are trying to develop this country, yet we are handing over the national airline to an airline whose track record is not to provide services from Belfast, Edinburgh, Glasgow, Manchester, Birmingham or any other region of the UK to North America”. “What hope has Cork, Shannon or other regional airports in that environment” he asked.

Deputy Micheál Martin

Deputy Micheál Martin, leader of Fianna Fáil, failed to add anything of substance to the debate, instead he depended on criticising the debate procedures and accusing the Government of “ramming the motion through the House”

During Leaders’ Questions over a number of days, Aer Lingus was the subject of further discussions. Unfortunately, Deputy Micheál Martin, leader of Fianna Fáil, failed to add anything of substance to the debate, instead he depended on criticising the debate procedures and accusing the Government of “ramming the motion through the House”. He too made great play of the Nyras report. He was joined by Deputy Gerry Adams, leader of Sinn Féin, who basically repeated the points made by Deputy Ellis. He said that the trade unions at Aer Lingus “envisage the loss of 2,500 jobs with this takeover” and asked “what about the 15,000 deferred pensioners who Government Deputies said would be factored into any Aer Lingus deal”? Again old points.

Returning to the fray, Deputy Clare Daly, in typical style, said the decision marked “a new low in the behaviour of this Government in terms of its arrogance, undemocratic manoeuvring and contempt for this House that it would ram through in a matter of days strategic decisions about the future of an almost 80 year old company that has employed tens of thousands of people and has been key to the strategic development of this country”. “I am conscious of the 15,000 members of the pension scheme who can now draw no conclusion other than that the manoeuvres around that scheme were part of a deal to get this out of the way so the Government could get what it wanted all along” she added. The driver of the IAG bid, she said, was “not what is in the best interests of the Irish nation, the workers or the passengers. The driver of the IAG bid is the commercial interests of the British, European and Middle Eastern shareholders who own IAG and that will be the driver of their involvement if they get hold of it”. In her view, for €1.3 billion, they will get a company “with cash reserves of €1 billion and Heathrow slots worth more than €0.5 billion, not to mention the property, the brand and the product”. She described the concept of the ‘B share’ as rubbish. “Where are the guarantees for the workers” she asked. “The Taoiseach has not given any, nor do I expect him to, given that he is a neo-liberal leader of a neo-liberal party”. “The Taoiseach has been silent on the reality that outsourcing and redundancies of ground staff is practically inevitable in this scenario” she claimed.

Deputy Finian McGrath said his first concern was job losses. There are people he said who work in the aviation sector who said they could see the possibility of 1,200 job losses in the coming years “yet the Minister is telling us their will be job gains” He again quoted Iberia who “shed 4,500 jobs since it was taken over by IAG”. He went on to quote a letter he received from a woman, a current Aer Lingus worker as follows: – “I am an Aer Lingus worker and am very worried about the security of my job with the sale of our fabulous airline. Have our government learned nothing after the sale of Irish ferries and Eircom. To me this is a short term gain for long term pain to all employees of Aer Lingus. Aer Lingus management are set to gain lotto figures with this sale so they are of course pushing this sale”. Oddly enough no reference was made to the workers shareholdings, the voluntary redundancy deals which saw workers return to work and present continuous recruitment.

Deputy Ruth Coppinger

Deputy Ruth Coppinger claimed that “the same assurances (on jobs) were given in 1997 when TEAM Aer Lingus, the maintenance company Aer Lingus used to own, was sold to another multinational giant, SR Technics.

Deputy Shane Ross, considered by many, to be right of the Government, made a rambling contribution. From this, it is unclear as to why he is opposed to the sale. Not so Socialist Deputy Ruth Coppinger, to whom privatisation is unthinkable. She claimed that “the same assurances (on jobs) were given in 1997 when TEAM Aer Lingus, the maintenance company Aer Lingus used to own, was sold to another multinational giant, SR Technics. By February 2009, the company had been closed completely, with the loss of 1,300 jobs, and the business moved to Zurich and the Middle East”. This argument completely ignores the development of the MRO sector in both Dublin and Shannon since then. It also completely ignores Aer Lingus’ record in relation to the lack of compulsory redundancies. Suggesting a return to public ownership she added “If the Minister could ditch his ideological aversion to public ownership, the taxpayer spends billions of euro attracting this type of company to Ireland and supporting them through IDA and Enterprise Ireland. This is an indigenous company with a respected brand which contributes to the Exchequer and turns a profit but apparently it must be sold”. Like it or hate it, it was one of the few suggestions made.

And so it went on and on to the following day, with speaker after speaker, government and opposition making the same points, for and against. Would more debate have added to the sum of knowledge, well having sat through most of it, I would say not. Over the weekend, the debate continued in the national newspapers with Minister Donohoe being severely criticised in some quarters over the deal, with Deputy Coppinger describing the sale of the national carrier as an “act of treachery”. What has emerged was that the Minister met with Willie Walsh face to face in the offices of various law firms in Dublin three times during the negotiations. Nevertheless, the process was delayed substantially, as Minister Donohoe and his officials bargained to get sufficiently robust guarantees on the Heathrow slots, employment and dealing with the EU. It also emerged that the Minister met with the union leaders at 08:00 on morning before he went into Cabinet on 26th May, to try to secure their agreement for the deal. He and his officials also met with Labour Deputy Michael McNamara, the following night in order to try and secure his vote but without success. Mr McNamara voted with the opposition against the deal and as a result lost the party whip of the junior member of the coalition government. But as to treason, “absolutely not” said the Minister adding “I do think some of the comments from opposition spokespeople on the deal were quite extraordinary…… the number of allegations of treason made….. I was quite struck by that.”

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About the Author

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Jim has had a life-long interest in military matters and aviation. Initially, he fused both of these interests together with a passion for military aviation, initially as a photographer. He has travelled extensively over the years and has been the guest of many European air forces, plus the air forces of the United States, Russia and others throughout the world. His first introduction to journalism coincided with an interest in the civil aviation industry was when he initially wrote for and later edited, ‘Aviation Ireland’, the club magazine of the Aviation Society of Ireland. Jim was a contributor to Flying in Ireland since its inception over 10 years ago and is now a key contributor to this site. He has also contributed items for a number of other aviation magazines and has produced a number of detailed contributions to Government policy documents, most recently the Irish Government’s White Paper on Defence. He is also deeply involved in the local community and voluntary sector and has worked both in local government and central government.



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