Joe Costello (Dublin Central, Labour)

I raise this issue because of the statement made in an interview in the German newspaper, Frankfurter Allgemeine Zeitung, today by Michael O'Leary, the chief executive officer of Ryanair, that he expects the Government to sell its 25% stake in Aer Lingus to his company. While this is alarming, the manner in which he made this statement is even more alarming because inherent in it is a presumption that the Government needs money and it is only a matter of him waiting before the stake falls into his hands.

The danger is that such a takeover would create a monopoly in the Irish aviation industry with Ryanair and Aer Lingus combined having 80% of the air traffic. This would be an unacceptable state of affairs as regards competition. It would be a disaster for the Irish consumer because the monopoly would immediately begin to exercise its muscle and the consumer would suffer.

This is an island nation and connectivity is essential for trade, travel and tourism. A monopoly would eliminate that competition and leave the country at the mercy of Ryanair's policies and shareholders. We have seen how ruthless Ryanair can be when it comes to implementing its policy and getting a dividend for its shareholders.

Last year, Ryanair made a derisory offer of €188 million for the Aer Lingus stake. This is all Ryanair was prepared to offer in 2009 for a 25% stake. It is clear that Mr. Michael O'Leary is still thinking of acquiring Aer Lingus for a bargain basement price. Given the exigencies of the budgetary situation, the fact that the economy is in dire straits and the Government desperately needs money, the State might dispose of some of the national assets or part of the private asset in the possession of the State. We must be very careful when dealing with this issue because we have seen what has happened in the financial institutions when we relied entirely on the private banking sector. We saw very quickly that greed took over and the national interest did not loom at all on the horizon. We must be very careful with the disposal of the State's share in this sector because it is the only way we can protect the national interest.

Aer Lingus has shown quite healthy and robust progress this year. The last quarter results surprised the market with better than expected profits. It is expected that Aer Lingus could make a profit of anything between €40 million and €50 million this year. It has been very effective and creative in its activities. It is looking for niche markets, especially in the area of transfer of passengers. Ireland is the only country in Europe with US immigration control rights at the point of departure as distinct from destination which is remarkably attractive to transatlantic passengers. It has linked up successfully with United Airlines and is doing well on the transatlantic routes.

The European Union has determined that such a takeover would be anti-competitive and would create a monopoly of 80% of air traffic which would not be regarded as complying with European directives. The State and the other stakeholders, including the employee share ownership trust, ESOT, have previously rejected an application from Ryanair. On this occasion, the Government should categorically state once and for all its position on the matter and assure the House that it will not sell the 25% stake which would allow Ryanair to take absolute control given that it currently owns 29.88% of the company.

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