Leo Varadkar (Dublin West, Fine Gael)

This question relates to the State's current shareholding in Aer Lingus. The McCarthy report which was published at 2 p.m. recommends that the Government dispose of its shareholding in Aer Lingus as soon as is opportune. During the coming months the Government will consider the recommendations set out in the report in the context of the ongoing budgetary challenge that we face.

The Government retained a minority stake of 25.1% in Aer Lingus in the initial public offering, IPO, of shares in the group in 2006 to protect the State's strategic aviation interests, especially access to London Heathrow services and the onward connectivity available through the company's significant slot portfolio at Heathrow Airport. In designing the investment transaction a specific mechanism was built into the company's memorandum and articles of association in advance of the IPO to protect against disposal of the Heathrow Airport slots by the company. Therefore, in considering any disposal of the State's shareholding it would be necessary to evaluate whether the protections considered necessary for London Heathrow services at the time of the IPO in 2006 were still relevant in the light of market developments since and, if they were still relevant, whether there would be any means of protecting them in a disposal. The effect of any disposal on competition in the airline market in the State would also have to be considered.

It should be noted that the review group also points out that the objective of any disposal of the State's shareholding should be the realisation of maximum value. This would also be a key consideration for the State if a disposal of its shareholding was to be considered.

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