Niall Collins (Limerick, Fianna Fail) | Oireachtas source

I am glad of the opportunity to speak in this debate, which is very important for every region of the country, and not alone Dublin or Cork but also the Shannon and mid-west region, which I represent in Limerick. There has been a lot of dishonesty on the Government's part in its presentation of the case to dispose of the 25.1% shareholding. It keeps getting thrown at this side of the House that we disposed of 75% of the company, which is true. Quite rightly, we keep pointing out that, as a result of disposing of 75% of the shareholding of the company, we now have a successful company, which is in a strong position and which has grown and gone from strength to strength following that privatisation. The privatisation allowed the company to decouple from absolute political interference in its day-to-day running. It allowed the company to restructure, sell and market itself and to grow its market share, which it has done exponentially over the past number of years. That decision, which Fine Gael and the Labour Party in opposition rejected roundly and called us out on, has now been shown to be a success. It is now okay to dispose of 100% of the company although it was not okay to dispose of 75% of the company. There lies the hypocrisy in the Government's position, which it has been offering by way of justification, over the past number of days.

It is ironic that the trade union movement is almost unanimous, to a man and to a woman, right across it, in its opposition to this proposed deal with IAG. It was also ironic yesterday that the airport companies were cited as being in support of this proposal. The Government's announcement was made without any reference to this Chamber. We have only these sham statements today, rather than a proper Dáil debate. The documentation has not been furnished to us, as Members of the Oireachtas, so that we could have the detail and read ourselves into the minutiae of the deal. This debate is based on what we are hearing on the news, on the airwaves and in the newspapers. Airport companies were cited as being in support of this proposal. These are State-owned. These are people who work for the Government. The boards of these airports were appointed by the Government. All these people have vested interests in the Government because they are an extension of the Government. Therefore why would they not? They are compromised in their ability to be critical in this debate. They cannot come to it from an objective point of view.

The management of the news cycle and the media has been cynical and the public will see through it. I do not believe a sale of the shareholding in Aer Lingus to IAG and the subsuming of Aer Lingus into the IAG group is the only show in town. It has been shown that Aer Lingus has been successful in its restructuring. We can look to other airlines such as EasyJet and Ryanair and how they have grown. They are similar in size. Ryanair has grown from a passenger base of 11 million in 2000 to more than 100 million today. EasyJet carries 60 million passengers. They have demonstrated how they can do it on their own and by not having to opt in to being part of a larger group.

On the valuation of the company, critical questions need to be answered and this issue needs to be highlighted. The 24 Heathrow landing slots have been valued at approximately €400 million. Pádraig Ó Céidigh, the former Aer Arann CEO, to whom Deputy Calleary referred, has stated that, with a share price of approximately €3, the company would be valued at €1.7 billion. We are getting in or around €340 million. There is a discount built into that but no one has addressed why that discount is being factored into the offer this Government will potentially accept.

The takeover deal is anti-competitive. If there is a trend or a drift towards consolidation and the centralisation to a small number of carriers of service provision to passengers in the airline industry, like in North America where up to four carriers are carrying nearly 80% of the traffic, a monopoly-type situation arises and that is not good.

On connectivity and regional connectivity, a two-tier recovery is afoot in this country. We have Dublin and the east coast and then we have the regions. There is no doubt that this will impact ultimately on the regions' competitiveness and connectivity. I will tell the House why. We had a situation in Limerick in 2007. Many of those present will remember it. The Shannon-Heathrow slot was moved temporarily from Shannon to Belfast. This was a huge local campaign. It is ironic that people in this Chamber and beyond who campaigned and called out the Government at the time, and rightly so, to have that slot reinstated and to have the connectivity reinstated, are mute now. I wonder why. Why are we not hearing from those people who took a position of strength in opposition?

Connectivity to the Limerick and mid-west regions is essential. We do not have guarantees. The Minister will tell us that he has guarantees. How will those guarantees be called into effect after the term expires? That is a big known unknown in the future and it is a worry for the region. What if, for example, the guarantees are reneged upon and there is recourse to the courts? We will have restoration, but the restoration or the penalty could be financial. In most instances, it will be financial and not restorative. The connectivity might not be restored. Limerick and the mid west region will be left at a disadvantage. I am sorry to say this, but I do not accept the guarantees are cast iron, despite the Minister's assurances. The narrative throughout the debate has been that these guarantees on connectivity will be cast iron and legally enforceable. What if Qatar Airways comes in, as has been widely reported, and commences a takeover of IAG or if IAG decides to sell out to it?

We have seen the situation regarding the M20 motorway from Limerick to Cork which has been shelved under the Minister's stewardship. I have taken the Minister to task on this issue before and I will take him to task on it again. We are at a disadvantage in Limerick in terms of it being a region. This deal with Aer Lingus will ultimately enhance the anti-regional agenda which inhibits balanced regional development by the Government.

We have seen it in terms of the road network - I have already referred to the M20 as well as Shannon Airport. Now, ultimately, we are looking at a situation where the Government will not have representation at board level whereby, in concert with another small shareholding group, for example, the pilots or other shareholders, they could direct the situation in respect of the use of the slots. This is putting us at a major disadvantage.

I put it to the Minister that, ultimately, this is a bad deal. The situation as demonstrated by Ryanair and EasyJet goes to the heart of it. Aer Lingus can survive on its own. It is surviving and flourishing. It has been a success for this country. It has demonstrated that much and it can go from strength to strength. It can go further.

What we heard this morning in respect of the Nyras report is concerning. The report, which was commissioned jointly by the boards of Aer Lingus and IAG, was only to be seen by the respective board members. Thankfully, someone leaked it and we now have the benefit of it. It is particularly disturbing when we hear that those on the Aer Lingus board - this was offered as part of the debate - are recommending this deal. Of course they are recommending the deal. The board members stand to benefit financially by a great deal of money. That is a fact. I do not know the exact figure but it is several million euro. The individual board members stand to gain a great deal out of this and naturally they will recommend it.

Costs will be 40% higher. The report identifies job cuts in the following areas: ground handling by 20%, catering by 40%, maintenance by 15%, and cuts in the area of heavy maintenance to eastern Europe. There will be job cuts and job losses. IAG has said nothing to us about the creation of new jobs. A total of 500 jobs has been mentioned, but they are on the way because of increases in the transatlantic routes in any event. There will be job losses, unfortunately, and nothing in the presentation by the Minister has dealt with that.

My last point relates to the pensioners. The fact that there is nothing in the deal for Aer Lingus pensioners is a sad indictment of the situation. We all know the situation they have endured in terms of the deficit in their pension fund. The Minister has referred to creating a connectivity fund, but there is nothing going into the pension fund of the men and women who built up Aer Lingus to what it is today, and that is something the Minister needs to revisit.

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