Dáil debates

Wednesday, 27 May 2015

Aer Lingus Share Disposal: Motion

 

11:50 am

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein) | Oireachtas source

I understand.

I object to this process, as we have not been furnished with proper documents. My party leader made this objection this morning. It was also agreed that this matter would come before the Joint Committee on Transport and Communications before a vote was taken or a decision made. The Minister's colleagues and Labour Party Deputies agreed to the issue being discussed at the joint committee.

It is very sad that we have to express our opinions on what is a done deal that nobody outside of IAG and Fine Gael wants. For one thing, it is utterly pointless and makes a mockery of democratic debate. The Government has made its decision behind the closed doors in a shrewd media operation which shows blatant disregard for the Oireachtas and its role in dealing with issues of such importance. No matter what anyone says, the Government will seek to sell its share in Aer Lingus and the weak and cowed Labour Party Members will go along with it. This is a sham.

Labour Party Deputies really saw the Minister coming, but in reality they knew the Government would sell out and allow this deal. That is why they raised concerns rather than express opposition. They hoped they would get a deal which looked better. To be fair, it does look better than what was previously offered, but it is still not the right thing to do and the Labour Party will be punished by the people for it. Have they not yet realised that the spin is only working in Fine Gael's favour, while the Labour Party's subservience and silence are destroying it from the inside? This is the wrong deal for Ireland and Labour Party Members know it, but they do not have the courage to act on that knowledge. Fine Gael and IAG are as thick as thieves and Labour Party Members having been given the run-around are being trotted out to say how all of their concerns have been allayed.

Aer Lingus is worth infinitely more to Ireland than the €335 million the Government will get for cashing in on the 25% Fianna Fáil left the State with after its calamitous reign. It ensures secure and consistent connectivity for Ireland, which is vital for any island but particularly a country that has attracted major multinational companies. A country is only attractive for investment when it boasts the facilities that make doing business easy and secure. For years Aer Lingus has made Ireland, at the far west of Europe and a vast ocean away from the United States, a place which can be reached without too much trouble or planning. It also has a reputation as a quality airline, with high customer satisfaction, which promotes a positive image of Ireland across the world. Irish people have taken and continue to take pride in Aer Lingus. Thanks to Fine Gael's desire to sell out as many of the State’s assets as possible and the Labour Party's pathetic subservience to it, Aer Lingus is facing into an uncertain seven years which very possibly will be its last, certainly as we know it. It will also be a very uncertain time for the thousands of workers who make their living in Aer Lingus or peripheral to Aer Lingus’s operations in Ireland.

The Government claims it has received assurances from IAG that it will not sell the Heathrow Airport slots, which was not a major concern owing to their strategic importance to the company. It also claims to have received a commitment that the Aer Lingus slots will remain under the company's control for seven years. On the face of it, that is a stay of execution which should have never been entered into, but behind it there is a major question about whether these assurances can be enforced or fulfilled. We are talking about the international air travel industry which is subject to considerable oversight in terms of the rules by which companies operate, particularly rules which govern competition. Do we really believe it is possible for the State in selling 25% of a company to hold a major multinational conglomerate to agreements in our interests for seven years and beyond? IAG is not a charity which has been set up to provide connectivity and jobs on island nations. It is a private for-profit operation with only two interests - its bottom line and its shareholders, of which Ireland is not one. It does not care about the interests of Ireland, its people or the workers who make up the nearly 4,000 employees of Aer Lingus which would represent less than 5% of IAG staff worldwide.

Aer Lingus is a small but successful airline. It weathered the storms of the downturn in air travel in the early 2000s and the economic collapse at the end of that decade. It has shown resilience and served the people of the country well since the 1930s. It has provided connectivity and good jobs. Under this deal, sooner or later that will be a thing of the past and Aer Lingus, as we know it, will only be a memory. It has remained such a company, despite privatisation, owing to the State's remaining share which has represented the interests of Ireland until now.

IAG has a track record that shows its interest is not in providing jobs or supporting the countries from which its airlines come. When Iberia was privatised, it was a good employer. It became part of IAG in 2011. Less than one year later it announced that 4,500 jobs would be cut. That is more than the entire staff of Aer Lingus. This was done without batting an eyelid and IAG has carried on regardless making huge profits for its shareholders at the expense of the Spanish state which had to help the 4,500 workers to pick up the pieces. Guarantees that a company will do this or that are only believable on the basis that its shareholders will argue for such a practice. No one on IAG’s board or among its shareholders will be arguing for the interests of Ireland.

I want to quote Mr. Willie Walsh, CEO of IAG, because he has frequently made clear what his intentions are for companies such as Aer Lingus that has vital slots at Heathrow Airport. In an interview with Flightglobal, an industry website, he stated:

It’s no secret that we’ve been interested in bmi, but largely because of its slot position at Heathrow rather than the brand. Similarly, when I look at Virgin, what I see are slots at Heathrow...

Virgin hasn’t got an exciting fleet. What it has got are slots and a network at Heathrow, so if they conclude that what they’re selling is, in effect, their slots at Heathrow, then we’d be very interested.
In an interview with The Independentlast May he stated:
Where the UK will lose out is that Heathrow will not be able to service the new, booming destinations in the developing markets of the Far East, Africa and Latin America. We just won’t have the slots at Heathrow.
In the Irish Independentin February he was quoted as saying there would be some job losses if IAG were to buy Aer Lingus. He has also tried to play down the importance of the Aer Lingus slots, knowing that the issue might cause problems for him and Fine Gael when a deal was being made. In the same interview he said the high value of slots did not indicate their value in the future, which is rubbish. As Heathrow Airport is now almost certain not to develop a third runway, slots are more valuable than ever.

The CEO of Aer Lingus who supports the deal and will be handsomely rewarded for his shares failed to play down the value of the Heathrow Airport slots when he admitted that they were worth nearly €500 million alone. This means that more than one third of the value IAG places on Aer Lingus is based on the slots at Heathrow Airport.

This clearly shows where IAG interests lie if the Government was fooled into thinking his hunger for slots extended only to Virgin. These slots at Heathrow are crucial to the importance of Aer Lingus to Ireland. They provide excellent connectivity with one of our main sources of trade, which is one of the major concerns, after job security, people have regarding this sell-off. The Government will get just over €300 million for its 25% stake, which is less than the value of the Aer Lingus Heathrow slots alone. If IAG decide to sell Aer Lingus or to wind up the company who knows what will happen to these wafer thin assurances the Government is heralding.

Comments

No comments

Log in or join to post a public comment.