Mr. Willie Walsh:

I have heard the statements by representatives of the employees in Aer Lingus about the efficiencies they have generated. My view has always been very clear. If what they say is true, there is no reason to be concerned. I recognise that changes have taken place in Aer Lingus and am fully aware of some, but not all, of those. We do not look to outsource business as a strategy. We only look to outsource business as a solution when no other solution exists. My preferred solution has always been to operate as many of the services as we can within the business because that is the area where one can exercise most control. If it can be done internally, that has always been my preferred choice.

If people look back at my time in Aer Lingus, they will see that while outsourcing was often talked about, it was never done. We did not engage in outsourcing. We restructured the business to make it more efficient and secure the jobs directly within Aer Lingus. I understand that this has continued to happen. I listened to Owen Reidy from SIPTU. No disrespect to the other people but I thought he was probably the most sensible of the people who appeared before the committee. He made very clear what had happened to make Aer Lingus more efficient. That is what I am about - the efficient operation of a business. If it can be done internally, I am all for that.

In respect of legally binding collective agreements, I spent a long time working in industrial relations in Aer Lingus and am very familiar with collective agreements.

I am very familiar with the fact that they are not structured as legally binding documents and, as I see it, they would have to be completely rewritten and restructured in order that they could be understood legally. They were never drawn up with legal enforcement in mind. It was a free collective bargaining process whereby these agreements were open to negotiation, interpretation and resolution between the parties. I am not clear on the dispute resolution procedures that have been put in place in Aer Lingus. I understand there was a move to put such procedures in place in an effort to resolve any difference. I am in favour of systems under which any dispute around interpretation can be resolved amicably within the business. Where this cannot be done directly, it should be done through mediation or arbitration. That system has generally worked well for Aer Lingus.

In the context of the pensions issue, I am a deferred pensioner. My pension has been reduced by 20% in line with those of many others in Aer Lingus. IAG would honour the agreement in respect of the IASS reached by Aer Lingus with its shareholders at the EGM in December, but we would not be doing anything other than this.

The Deputy is correct. During my period with Aer Lingus we stopped providing cargo services on short-haul flights. The principal reason for this was that we were pushing to improve aircraft utilisation and accelerate the turnaround of aircraft in order to make better use of them. It was deemed that the contribution cargo made on short-haul flights was insignificant relative to the benefit that could be achieved in being able to rotate aircraft more rapidly. I am pleased that this policy has been reintroduced because Aer Lingus has not lost any efficiency as a result of it. We are one of the biggest cargo operators in the world and we can bring a great deal of value to Aer Lingus and the Irish economy in terms of cargo services. Both Enterprise Ireland and IDA Ireland have highlighted cargo services as a critical issue. We are leaders in cargo transport and also global specialists in carrying high value cargo, particularly pharmaceuticals. We believe we can assist Aer Lingus in developing its business in this area, especially in the light of the importance of the pharmaceutical industry to Ireland.