Oireachtas Joint and Select Committees

Tuesday, 3 February 2015

Joint Oireachtas Committee on Transport and Communications

Proposed Sale of Aer Lingus: Discussion (Resumed)

11:00 am

Photo of Sean BarrettSean Barrett (Independent) | Oireachtas source

I welcome our visitors. The journal.ieopinion poll on this found 58% of respondents against the takeover, 6% against it at the price and 21% in favour. I find the comments of the industry representatives strange, given that they do not reflect what I am picking up. My constituency comprises a substantial number of the diaspora and they are appalled that this is getting such credence. The Stock Exchange rules should not have been invoked earlier and the Secretary General of the Department of Transport, Tourism and Sport should have appeared before the committee. Pro-takeover information is being leaked to the newspapers every day and Parliament has been restricted in its discussions of this.

I refer to the positive comments of the representatives of the development agencies. IDA Ireland's submission states: "We need competition between carriers to ensure long-term cost competitiveness." I could not agree more. Economists always oppose these anti-competitive mergers. They welcomed the deregulation of the market and its opening up to new entrants. In its home market, BA is substantially smaller than easyJet - by at least 10 million passengers - and Ryanair. How BA came to be seen in this country as the patron saint of the regions and the tourism industry is bizarre.

Let me tell the committee what its record is on the island of Ireland. Northern Ireland has 190 air routes: eight from Derry, 81 from Belfast International Airport and 29 from George Best Belfast City Airport; of those, only one route is operated by British Airways. In this country there are 264 routes, with 175 from Dublin, 41 from Cork, 30 from Shannon, 12 from Knock and six from Kerry - again, with only one route operated by British Airways. How people formed the view that selling Aer Lingus to British Airways would promote Ireland as a destination is bizarre.

Let us see how British Airways treats its own regions. Glasgow has 268 routes, of which two are operated by British Airways; Birmingham has 217 routes, with none operated by British Airways; Manchester has 225 routes, with one operated by British Airways; and Edinburgh has 179 routes, with one operated by British Airways. Guess where these routes go? They go to Heathrow, because British Airways is Air Heathrow. It promotes that hub.

Let me give an account of what British Airways has done in the UK regions. BA had previously operated a significant hub at Manchester, but Manchester operations ceased, along with all international services outside London, when the subsidiary BA Connect was sold due to a lack of profitability. Passengers wishing to travel internationally with BA, either to or from regional UK destinations, must now transfer in London. When Ryanair was founded, Heathrow had 35 million passengers a year; the figure is now 72 million. It says it is full in order to preserve the value of the slots. It keeps expanding, and that is where BA plans to divert the Irish business. It is really amazing that people from the business community cannot see the value of what is being done by Aer Lingus as a brand, particularly on the north Atlantic routes. Approximately 2.4 million passengers travel between Dublin and Shannon and North America. The equivalent figure in Scotland, which is a bigger country and also has a diaspora, is about 400,000. British Airways is not what Willie Walsh tells you; it is what it does, and what it does is to seriously neglect Manchester, Belfast, Birmingham, Edinburgh and Glasgow. I would advise members to go and look at the numbers before people make these presentations - wondering, as Deputy Fitzmaurice said, about what might be, and whether we can get a guarantee.

On a radio programme last Saturday, I spoke against this measure. I utterly oppose it and I will be voting "No" at every opportunity. After the programme I called in to what used to be Superquinn in Lucan. There is not the slightest shred of evidence that my good friend Senator Feargal Quinn was ever there, that he founded it, or that he worked in it for four decades, because it is now owned by Musgrave and it is called SuperValu. That is what happens when firms take over. Instead of asking whether we can get a guarantee on this and that, people should realise that it comes down to one thing: either they want a national airline, or they do not. The pilots, who own 7%, are strongly in favour of retention. Mr. O'Leary has 30% and the Government owns 25.1%. We can make Aer Lingus a strong airline by it doing what it has been doing. In every market in which it has competed, Aer Lingus has knocked British Airways for six. This is the inferior competitor taking over a profitable airline which has made great progress under Christoph Mueller. The concern I also have is that neither David Begg nor Christoph Mueller was at the meetings at which this was discussed, and we would rely on them to represent what the management and the workers have been doing in recent times.

Handing the decision on a vital national issue over to a committee of bankers, financiers and accountants and the Stock Exchange takeover panel puts aviation policy in the lap of the same people who bankrupted the country on 29 September 2008, which we are now trying to investigate. Do not make the mistake a second time. This is a profitable airline that has been doing a valuable job. It has 11 million passengers and people say it has an uncertain future. In 2001, Ryanair had 9.4 million passengers, and it will have about 100 million passengers this year. EasyJet, which had 11 million passengers in 2001, will have 65 million passengers this year. There is no reason a profitable Aer Lingus cannot grow. It does not have to be bought in a hostile takeover - and it is hostile, as far as the vast majority of Irish people in Ireland and abroad are concerned, and it should be seen as such by this Parliament.

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