Bertie Ahern (Dublin Central, Fianna Fail)

Following consideration of the report prepared by the advisers appointed by the Ministers for Transport and Finance on the investment transaction of Aer Lingus, the Ministers agreed proposals for the implementation of the investment transaction which were presented at a Government meeting in April.

The investment transaction is to be implemented on the following basis. In line with the Government's decision last summer, a majority of the Government's shareholding in Aer Lingus will be sold. This will be done through an IPO of the company's shares on the Stock Exchange. The State will retain a minimum stake of 25.1% in the company to protect the State's strategic interest. The transaction is to be implemented as soon as possible, taking into account Stock Exchange rules and market conditions.

A June date for the IPO was never mentioned by the Government. Last weekend some sections of the media speculated that the recent rise in crude oil prices could threaten the planned Aer Lingus IPO. The prospect of oil prices reaching record highs poses a risk for the entire economy. It is true that airlines are particularly sensitive to external shocks and global downturns. In the aftermath of the events of 11 September 2001, several well-established airlines went to the wall. The primary reason behind the Government's decision to sell a majority shareholding in the company is to allow the company access to the financial markets so that it will have sufficient financial strength to continue to compete in the competitive global aviation market and withstand such shocks. It will be in a much better position to do so if it has a strong balance sheet.

The transaction will be implemented as soon as possible. It will take account of stock market conditions and the regulatory requirements that need to be fulfilled before a flotation can take place. The exact arrangements in this regard will be decided by the Ministers for Transport and Finance based on the professional advice available to them.

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