Róisín Shortall (Dublin North West, Labour)

In the years to come, today will be seen as a bad day for the country and for Aer Lingus. Today, the Government is asking the House to approve the sell-off of our national airline. We all accept Aer Lingus has played a critical role in the economy. As an island nation, we are all heavily dependent on air travel for trade and tourism. We are fortunate in the services that Aer Lingus has built up so that, as travellers and traders, we have direct access to many destinations. In addition, we have access to almost anywhere in the world, via Heathrow. It is critical for our economy that those services are maintained. The only sure way of doing that is by retaining the company in Irish public ownership.

The Government's justification for the sale of Aer Lingus is that the airline needs investment so it can continue to grow. No one denies that the company needs access to capital and we all certainly want to see the company expand. It is important to note that the capital needs of the company have never been accurately quantified. Various figures have been tossed about, but at no stage have we seen any business plan setting out the investment needs over, say, the next ten years.

It has been suggested that under the open skies policy, Aer Lingus will need significant numbers of new aircraft. We hope that will be the case but the reality is that the open skies issue is far from being resolved and has recently been set back by resolutions passed by the US Congress.

We all accept that over the coming years the company will need a certain amount of capital. If that is the case, however, one must ask why the Government is proposing to remove itself as a source of capital from the company. That is exactly what it is proposing to do. If Aer Lingus needs capital, it has a number of options. It could easily borrow, based on its own performance. It could enter into long-term leases, which is what airlines generally do. Alternatively, the Government could invest in the company. We know there is no obstacle to the Government doing this, despite the erroneous impression that some Government representatives have been trying to give to the contrary.

If this is a good investment for the private sector, then it is also a good investment for the public sector. The Labour Party, as well as the Irish Congress of Trade Unions, have put forward proposals for a State holding company, a vehicle through which investment could take place while also ensuring critical commercial freedom for the company.

The traditional argument for flogging State assets has always been that there was a need to raise funds for the Exchequer, but that argument does not hold up anymore because the Government coffers are overflowing. The reality is that this right-wing Government is fundamentally opposed to a commercial semi-State sector, and its motivation in doing this is entirely ideological.

So what of the proceeds of this proposed sale? What about the promises to invest in the pension fund and new aircraft? We are not getting any of that. The Government proposes to sell off up to 60% of Aer Lingus to raise between €300 million and €400 million. It will take the money and run. In the process there will be a buy-in by private investors who will undoubtedly use the company for their own interests. Private investors will act as private investors always do — they will seek to get the best possible return on their investment. In other words, they will try to make as much money as they possibly can, as quickly as they can, and to hell with the consequences. The consequences could, indeed, be very damaging for the company and for all of us who depend on good air transport links. It is quite possible that, as a nation, we will lose control of our air travel services, as Aer Lingus becomes merely a vehicle for profiteering, just like Eircom.

In the general principles, the Minister makes vague references to our strategic interests. He says that "sales or transfers of slots at Heathrow will be subject to a shareholder's resolution" and that "provision will be made that the resolution will not be passed, if opposed by a defined percentage of shareholders". The Minister goes on to say that "this will enable the State, along with other shareholders, to prevent the disposal of slots against Ireland's strategic interests". This is patent nonsense.

Apart from the fact the Minister does not even define the percentage he is talking about, there are three other pertinent points. First, the EU is likely to rule against such a so-called controlling share. It is also interesting to note that the Government has made no formal approach whatsoever to the European Commission on this issue.

Second, while the State may retain a minimum of 25.1% on the initial public offering, there are no proposals whatsoever to protect that shareholding from dilution on the proposed new share issue.

Third, if a mechanism was found to retain that kind of influence, it would so devalue the company share price as to render this whole exercise worthless. There is no doubt we would end up in a position where the taxpayer was getting bad value. This is a figleaf and the Minister should be honest enough to admit it.

As regards the importance of the Heathrow slots, in recent weeks the Minister has spoken about the importance of Dubai becoming a hub, but that does not wash in an Irish context. Who will be travelling via Dubai? It is nonsense when one thinks about it.

See this speech in context