Noel Dempsey (Meath West, Fianna Fail)

I propose to take Questions Nos. 59 and 60 together.

I wish to bring to the attention of the Deputies the fact that under the applicable takeover rules there are constraints on any comments I can make about the matter at this stage. The reply is given in that context.

Ireland's aviation policy, as set out in my Department's current statement of strategy, is to promote regular, safe, cost-effective and competitive air services linking the country and key business and tourism markets. The priority, from an Irish economy perspective, is to maintain the highest possible levels of connectivity between Ireland and key markets around the world. That remains the strategic context against which any proposal for the purchase of the State's shareholding in Aer Lingus will be considered.

Following its initial announcement on 1 December, Ryanair posted a detailed offer to Aer Lingus shareholders on 15 December. In accordance with the takeover rules, the board of the company must set out a detailed response within 14 days following the release of the detailed offer so that shareholders can make a decision on the acceptance of the offer or otherwise. The Deputy will be aware that the board of Aer Lingus has publicly announced its rejection of the proposed offer.

I have said that the Government would consider the Ryanair offer when received. It is now being examined by my Department. The State's nominees on the board were issued with a mandate to seek to reconcile commercial and public policy objectives on 31 January 2008. I have not given any specific directions to the State's nominees on the board in regard to this matter. All members of the board of directors are subject to the requirements of the Companies Acts to uphold their fiduciary responsibilities and to act in the interests of the company and its shareholders.

Even if a sufficient number of Aer Lingus shareholders were willing to accept Ryanair's offer, the completion of a merger between Ryanair and Aer Lingus would only be possible with the approval of the European Commission. The Deputy will be aware that Ryanair's previous takeover bid, initiated in 2006, failed to obtain the necessary approval and that decision is now under appeal by Ryanair to the Court of First Instance.

On 11 December, I agreed to meet with the CEO and chairman of Aer Lingus who wished to convey to me their opposition to the Ryanair offer. The Deputy will be aware that the company made a public statement following the meeting.

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