Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputy for raising these important matters to which I will respond. As he has pointed out, some additional details have emerged of the proposal by International Consolidated Airlines Group, IAG, to make an offer for Aer Lingus since it was first announced in December 2014. Some of them emerged during the meetings of the Oireachtas Joint Committee on Transport and Communications to which the Deputy has referred. However, it is important to note that this remains a proposal to make an offer and that no formal offer has yet been made. There is still only a limited amount of detail of the terms of the potential offer. While a formal offer has not been made, Aer Lingus is in a takeover period and the strict Irish Takeover Panel rules on public communications still apply. Clearly, the future of Aer Lingus is an important matter in which there is a great deal of public interest. I have outlined the Government's policy on the proposed bid many times. I also addressed a Topical Issue tabled by the Deputy on a related matter on 4 February. The Joint Committee on Transport and Communications heard the views of a wide range of stakeholders on the matter, most recently from the chairman and chief executive officer-designate of Aer Lingus, as well as from IAG. The Government has made clear the various issues that will be examined before decisions are made on the future of Aer Lingus.

As for the board of the company, about which the Deputy has asked me specific questions, I can only outline the position as it stands. The State's combined shareholding of 25.1% of the issued share capital in Aer Lingus entitles the Minister, acting through the Minister for Finance in his capacity as shareholder, to nominate up to three persons as Minister's nominees on the board of the company. The State has two such nominees on the board. Mr. William Slattery was appointed on 12 July 2013 and Mr. Frank O'Connor on 14 March 2014, both for three-year terms. The board has ten other executive and non-executive directors. The mechanism for the appointment of the Minister's nominees on the board of Aer Lingus is set out in Article 93 of the memorandum and articles of association of the company. The Minister for Transport, Tourism and Sport, acting through the Minister for Finance in his capacity as shareholder, writes to the chairman to nominate formally the person concerned. The board then ratifies the appointment of the Minister's nominee as a director of the company. Under Article 93, should the State's shareholding fall to between 5% and 25.1%, the number of Minister's nominees on the board would fall to two. Were the shareholding to fall to between 1% and 5%, the number would be one, which relates to some of the questions put to me by the Deputy. Were the State's shareholding to fall below 1%, it would not have an automatic right to nominate any director under the current arrangements. Like all company directors, the duties of the Minister's nominees as directors derive from the Companies Acts and all such directors are obliged to pursue the best interests of the company, not those of individual shareholders.

Article 93(g) of the company's articles provides for the Minister to enter into an agreement and arrangements with the Minister's nominees. This letter of mandate requests the Minister's nominees to seek to ensure those decisions of the company which have significant implications for wider Government policies are considered at board level. As I indicated, the State's right to nominate up to three directors is based on its current shareholding. Should the State dispose of its shareholding in its entirety to IAG or any other entity, it would no longer have such rights. It is simply not possible for me to state what arrangements would apply for the appointment, role and tenure of any future Aer Lingus board in a scenario in which the State no longer had a shareholding in the company. I reiterate that no decision has yet been taken on the Government's position on the proposal made by IAG. As I have reiterated previously, in the event of a decision being taken to dispose of the State's shareholding, it would be necessary for the House to approve the principles of any such disposal in accordance with the provisions of the Aer Lingus Act 2004.

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