Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

In 2006 the State retained a minority stake of 25.1% in Aer Lingus when the initial public offering of shares in the company took place. The minority stake was retained to protect the State's interests at that time. Since that time, the trend towards consolidation in the airline industry has accelerated and competition for short haul and, in particular, long haul air services in the Irish market has increased. In 2012 the Government included the Aer Lingus stake among the possible assets to be sold under the State asset disposal programme but agreed that the stake would only be sold when market conditions were favourable and if acceptable terms and an acceptable price could be secured for the stake. It remains the case that the Government is willing to sell its stake but I stated recently that I find it unlikely that a buyer willing to offer the right price and accept appropriate conditions will emerge in the near term. The ongoing pension deficit issue and legal challenges to the EU and UK regulatory authority decisions on Ryanair’s stake creates major uncertainties for any potential buyer.

The 25% stake has proved helpful in protecting the State's interests in the past. It made the Government a key stakeholder in the three takeover attempts, which successive Governments have opposed. It also gives the Government  an important say in any proposal to dispose of Aer Lingus's valuable slot portfolio at London Heathrow Airport and gives the Government the right to nominate up to three directors on the board. The Government will continue to manage its shareholding actively, with the aim of maximising the value of the shareholding, securing dividends and encouraging new routes and additional capacity where commercially viable. Since 2012 the company has paid two dividends to the Exchequer totalling in the region of €9.4 million in respect of financial years 2011 and 2012.

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