Trevor Sargent (Dublin North, Green Party)

The Green Party has already stated its position on the privatisation of Aer Lingus. We believe the Government should invest in the company as a vital national asset. This would be in the best interests of the airline, the workers and the economy. Aer Lingus has proved that a publicly owned company can be both profitable and innovative. The Government should consider this before selling off an asset so vital to the economic security of the State.

The regularly repeated view that the European Union would prevent the State from making such investment is incorrect. EU rules only prevent state investment in loss making state enterprises and would not bar us from investing substantially in Aer Lingus. We see no reason the Government could not provide the necessary capital by investing directly in the company.

There is great uncertainty about how much the sale will raise, perhaps only €400 million. The amount raised will certainly fall far short of the €2 billion capital requirement for fleet renewal outlined by Dermot Mannion. With no investment return to the Exchequer and no clear gain in the form of better management of the company resulting from the flotation, it is difficult to see the advantages of selling Aer Lingus. If the Government pushes ahead with the flotation, as it seems determined to do, it must not fail. A failed flotation, added to the insecurity the Government is bringing to Ireland's position in the world economy, would be a disaster.

I understand the reason many workers are concerned about their futures and the future of the airline. There is an air of great uncertainty about the flotation. If the Government could not make a success of floating Eircom, around which there was an air of certainty, it cannot creditably claim that it will make a success of this flotation. Several factors exist that create uncertainty and they seem to indicate that a flotation now is a reckless decision.

In September 2005, Senator Mary O'Rourke said: "I have a gut feeling it won't go ahead at the end of next year because we'll be within three to four months of a general election". I doubt the Government's commitment to a successful flotation, as do many workers and potential investors. The Government's priority is to cover its own backside.

The Taoiseach's attempt to ride two horses at the same time by pushing for the flotation behind the doors of the Cabinet room and publicly criticising those who were planning a similar fate for the airline is disingenuous. While trying to hedge his bets politically, he is undermining the chances of a successful flotation. Following two years of prevarication, the Government's lack of commitment to its policy is creating further uncertainty.

Major industrial relations issues, including the pensions' fund deficit, which affects many people who built up the airline during a period of high taxation — 60% in many cases, pay and staffing levels and the retention of employees' shares have yet to be settled. How are workers expected to support a flotation with these issues still up in the air? Why should investors feel any confidence before they are settled? It is unreasonable to ask me as a representative of many Aer Lingus workers in north Dublin to support the flotation before these issues are resolved.

As I said yesterday during the debate on social partnership, energy is the economy. There has already been speculation among stockbrokers and investors that rising oil prices may scupper the flotation. Some have said that if oil prices even approach $80 a barrel, the flotation will be in danger. Oil prices are currently above $72 a barrel.

The recent difficulties with the Air Berlin flotation demonstrate the power of oil prices. It had to go to the market with a reduced IPO and its value has fallen 12% since its flotation last month. Ryanair is down 13% since the beginning of the year. In the past two months, Lufthansa is down 7.5%, SAS is down 30% and Iberia is down 12%. Aer Lingus has only hedged 51% of its oil exposure until the end of the year. Therefore, it is exposed, as is the country.

Other factors will influence the success of the flotation. The US Department of Justice's investigation into alleged cartel activity by the airlines, including Aer Lingus, is yet to conclude. There has been a delay in agreeing a new open skies agreement and there is increasing competition coming down the line for Aer Lingus on long haul routes.

It is not only about the success of the airline that we must be concerned. This is a matter of national economic security. Ireland is an island nation and a globalised nation and transport is critical for our economic security. We have yet to receive a guarantee that the Government can secure the airline's slots in Heathrow. With a minority shareholding the Government will not be able to give such guarantees, but there have been plenty of attempts to obfuscate this fact.

How will the Government address in its aviation policy the peak in oil production? How does surrendering its ambitions for Aer Lingus contribute to this? A strategic approach to Ireland's medium term transport and economic needs is vital. I have suggested to the Taoiseach that he should establish a Cabinet sub-committee on peak oil to consider the impact of peak oil on the economy, including the aviation sector and aviation dependent industries. I repeat that suggestion now.

I urge the Government to look at the experience of another island nation. New Zealand's national airline was privatised, went bankrupt and was bought back by the state within a decade at twice the price. It is now a successful publicly owned airline.

The Government does not have a mandate for the sale of Aer Lingus.

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