Olivia Mitchell (Dublin South, Fine Gael)

I welcome the opportunity to contribute to the debate, although I find myself unable to support the motion or the amendment. I agree with the statement that an airline is a vital strategic element of our infrastructure. However, I do not believe that, to be that, the airline needs to be State owned. The Oireachtas should serve the public interest, as stipulated in the motion, but I do not believe that the interest of the public, the workers or the aviation sector is best served by State ownership. I do not know how anyone could think that such is the case after the experience of the past few years and the manner in which the airline has been abused under State ownership. Its performance has been hobbled and its future prosperity jeopardised by the absence of the willingness of the State to make decisions about the future of the airline.

I have no problem with the investment of the national pension fund in low risk public projects. If this airline was publicly quoted, I would have no objection to the national pension fund being invested in it. However, investing in an airline is extremely risky and I would not like to see my pension dependent on the future of something as liable to market fluctuations as an airline.

I have no problem with most of the Government's amendment to the motion. However, I cannot agree to that part of the amendment that welcomes the Government's strategic approach that allegedly gives Irish aviation a clear direction for the future and an unambiguous mandate for growth. That really makes me despair. We have witnessed a classic example of the Government's inability to make a decision or give clear direction to this industry in recent years. That part of the amendment must have been written by someone with a great sense of humour, or it is an indication that the Government has lost touch with reality.

For the past three years, the Government has prevaricated, procrastinated and obfuscated. It has done anything but make a decision. The result is that the airline has lost its management, growth opportunities and approximately 25% of the value of the airline, according to the market. The restructuring planned for the airline and essential for its future has completely stalled. The business plan has gone to ground because there has been no clear direction about where the company was going.

To call this a strategic approach is to stretch the imagination. The indecision about the terminal is similar. The aviation sector must grow if it is to survive and prosper. It must get new routes, and to do that, we need a bigger runway to take larger aeroplanes that do not require load constraints when they take off. We must have growth capacity and we do not have that. We do not have the runways, we do not have the terminals and we do not have an airline with enough aeroplanes. We have no chance to capitalise on the opportunities afforded to other airports and other airlines with the coming open skies policy. The industry is moving on. Other airlines and airports are making decisions. They are moving in and capturing routes that are being lost to us as our airlines and terminals are not in a position to respond to market conditions.

The sale of Aer Lingus is essential and it will serve everyone's interest well. An airline must be able to react to market conditions in an industry that is volatile. It must have commercial freedom. Over the past few years, it has been unable to make decisions on facing changes in market conditions, and that cannot be tolerated. We have been very lucky that Aer Lingus has survived this difficult few years. However, it is not out of the woods yet. The airline also needs equity capital. It cannot carry any more debt as an airline. It has already invested heavily in the replacement of its short-haul fleet. The State could invest in it now, but not if the airline got into trouble. Its long-haul fleet needs to be replaced. Some Deputies have stated that nobody knows how much that will cost, but the company has been negotiating for a long time with aircraft providers and it should have a fair idea of the cost. The chairman of the company indicated that about €1 billion would be needed. Another €1 billion is required for expansion if the airline is to develop new routes. Aer Lingus operates in an environment in which there is a significant demand for travel services. Passenger growth for the company is 6% compared with Ryanair's figure of almost 50%. An increase in business of the order enjoyed by Ryanair is required if Aer Lingus is to compete successfully. The company is currently profitable but this has been achieved largely on the basis of downsizing and it cannot continue with this approach indefinitely. There must be investment for growth. The business plan, which is the only game in town, requires Aer Lingus to expand and that requires equity capital.

Members who spoke for the motion argued that State ownership of Aer Lingus is essential for tourism and the economy. However, the reality is that tourism and the economy do not depend on the existence of a complacent terminal-provider or a State-owned airline. What is required is an aviation sector in which airline operators are aware they must compete not only with other airlines, terminals and airports but with other states. We must compete and prosper on a European and worldwide scale and we must aggressively seek new business. New airlines must be encouraged to use our airports and existing airlines must provide new routes. That is the best hope for tourism and the economy but it cannot currently be achieved.

Our experience in regard to Telecom Éireann gives us every reason to pause for thought and does not inspire confidence as we contemplate the future of Aer Lingus. There are no guarantees in respect of either State or private ownership. State ownership is not a guarantee of a company's survival even if the taxpayer could prop it up when it gets into trouble. Good management and the ability to grow are the best prospects we can offer to Aer Lingus. We must afford the airline the opportunity to make its own commercial decisions, give it access to capital and allow it to expand into new markets.

I despair in regard to the decision on a second terminal. Reports were commissioned at great cost from all quarters which examined every criteria upon which that decision should be made. None of those reports was considered when it came time to make the decision. The only criterion was the question of party political interests. The Government has badly served the aviation industry in this regard. One wonders about the purpose of the protracted and painful debate and the associated hype when one considers that the Taoiseach had apparently already negotiated away even the possibility of a competing terminal when he promised conditions and pay in the new facility would be similar to those in the existing and dismally failed terminal. How are we expected to believe there was ever a possibility of a competing terminal if the Taoiseach had already decided the pay and conditions that must prevail?

This is a sorry saga of the mistreatment and abuse of both the airports and Aer Lingus. I cannot in conscious support either the motion or the Government's amendment.

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