Martin Cullen (Waterford, Fianna Fail)

I propose to take Questions Nos. 50 and 53 together.

As the Deputy will be aware, in its decision of 18 May 2005, the Government agreed to the State disposing of a majority shareholding in Aer Lingus and retaining a stake of at least 25% to protect strategic interests provided that the Minister for Finance and I are satisfied that this level of disposal is warranted on foot of the analysis prepared by the Departments' advisers for the transaction.

The decision to dispose of a majority shareholding in Aer Lingus was made following detailed and comprehensive consideration of the issue by me and my colleagues in Government. The Government agreed in its decision that the strategic development of the State airports and Aer Lingus was essential to underpin Ireland's competitiveness, industry and tourism. Furthermore, its consideration was based on an acknowledgement that the company had an immediate need for access to equity capital to enable it to compete effectively and to fund growth and that this investment could not, and should not, come from the Government. It is precisely because of the strategic importance to Ireland of a wide range of cost effective air services that a third party investment in the airline is being sought. The question of reviewing the Government's decision, therefore, does not arise. In accordance with the terms of Sustaining Progress, I had also engaged with the trade unions on the issue early in 2005 before the Government finalised its consideration of the matter.

Following a competitive tender process, UBS and AIB Capital Markets were appointed to provide financial advice and assistance to the Minister for Finance and me in respect of an Aer Lingus sale or investment transaction. William Fry and Freshfields Bruckhous Deringer were appointed as legal advisers for the assignment.

The first phase of the advisers' work was to recommend the most appropriate transaction mechanism and advise on the size and timing of a transaction. The advisers submitted their report before the end of last year and the key conclusions and recommendations are being considered by the Minister for Finance and me. No decision has yet been made on the basis on which the investment transaction will be implemented. I have instructed the company's management to engage intensively with the trade unions over the coming weeks to address issues relating to the company's pension schemes in advance of the planned investment transaction. It is my intention to revert to Government, in conjunction with my colleague the Minister for Finance, in the coming weeks.

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