Tommy Broughan (Dublin North East, Independent) | Oireachtas source

I am grateful for the opportunity to contribute briefly to this discussion and to reiterate my stance from January that the sale of the 25.1% Government stake in Aer Lingus is clearly not in Ireland's national interest. The sale poses an immediate threat to air connectivity from Dublin, Cork, Shannon and Knock airports, despite reassurances that vital slots at Heathrow Airport will remain in place for seven years. It also threatens the future of 3,900 Aer Lingus workers, especially the 2,100 back office and ground staff, and abandons the 15,000 IASS pensioners who gave their lifetime's work to our national airline and State airports.

The €1.3 billion IAG bid will signal the end of Ireland's historic, independent aviation company dating from the era of Seán Lemass who was a great Minister for Industry and Commerce in the 1930s. We knew this day was coming when this conservative Fine Gael-Labour Party Government agreed with the troika back in 2012 to sell €3 billion of State assets, two thirds of which would go towards paying off the unfair debts that were imposed on this country. The Labour Party and Fine Gael have since shamefully flogged off our family silver, including Bord Gáis Energy, the national lottery for 20 years and now Aer Lingus. Bord Gáis was also sold for a song to a British legacy company, Centrica, which is the old British Gas. Attempts to sell Coillte were narrowly averted by the outrage of our constituents across the country.

It is laughable listening to the brazen, brass-neck hypocrisy of the Fianna Fáil Party pretending to mourn the demise of our national airline. Fianna Fáil sold 75% our iconic national airline back in 2006 and ensured the company would be privatised. They then pretended to be fools when Michael O'Leary immediately moved to take over the airline. Fianna Fáil and Fine Gael have acted hand-in-hand on this matter.

The first question which occurs to everybody at this stage is why this sale is going ahead now. Aer Lingus has been enjoying considerable success, particularly during the latter part of the Mueller era, as an independently owned national airline. The 2014 annual report highlights a 9.2% increase in revenue, a 17.8% increase in operating profit and increases of 9.4% and 7.9% in average fare revenue per seat and per passenger respectively.

The number of passengers also increased between 2013 and 2014 up to almost 10 million, while revenue passenger kilometres also increased 8.7% in just one year. The 2015 first quarter report's interim management statement continues with these positive numbers from the Aer Lingus management and workforce. Aer Lingus has a net cash amount of over €650 million, which is nearly 30% higher than the 2013 net cash balance. Why are we selling now when this airline, our airline, is clearly thriving? The key to the recent success of Aer Lingus has been its short-haul business model and its niche positioning in the middle of the market. Aer Lingus holds approximately 41% of market share of the Irish short-haul market. An integral reason for this is the connectivity and importance of the strategic slots at Heathrow Airport.

Had the Government agreed to the International Consolidated Airlines Group, IAG's, original takeover bid back in January, we would not even have the miserly concessions that the Minister outlined. I listened carefully to the statement of the Minister, Deputy Paschal Donohoe. He placed great importance on the seven year guarantee on the Heathrow Airport slots and the ability of the Minister for Finance and the Minister for Transport, Tourism and Sport to use this new B share to prevent the disposal of slots and any proposed change in the Aer Lingus board and head office.

There is also reference to ambitious plans to grow passenger numbers by 2.5 million by 2020.

How do these supported guarantees tie in with the cost-saving initiatives being planned by Aer Lingus? Does the Minister know which areas of business or the workforce will be hit? Almost six months ago, Captain Evan Cullen of the Irish Airline Pilots Association, IALPA, pointed out the dangers especially to back office and maintenance staff numbers from this proposed takeover. Any duplication of functions already in London and Madrid, for example, will be ruthlessly eliminated by the IAG management and in executive leadership terms, Dublin will become a branch office of this British airline. What guarantees are there for quieter routes in Cork, Shannon and Knock airports, particularly during the months with lower numbers of tourists visiting? We are familiar with the takeovers and what happens even to iconic brands. We have witnessed job losses and closures just recently with the takeover of O₂by 3 and in Dublin Bay North we are wrestling with the consequences of the takeover of Cadbury by 3G-Heinz-Kraft-Mondelez, which could have devastating consequences for the Coolock workforce.

I strongly agree with Senator Sean D. Barrett in his opposition to this sale to a European legacy flag carrier airline like BA-IAG. British Airways was the largest airline in Britain from 1974 until 2008 and it is a founding member of the oneworld airline alliance but it has a chequered history with acquisitions, profitability and industrial relations disputes. British Airways merged with Iberia to form IAG in 2011 and promptly cut 4,500 jobs, mainly in Iberia. The redundancies were part of a so-called restructuring process that led to a return to a profit last year. With Aer Lingus already posting healthy profits, what will a restructuring programme look like for that company?

The British Airways main hub is London Heathrow, where it currently owns 40% of available slots, ahead of Aer Lingus and Lufthansa. It also operates out of London City Airport and it previously had significant operations in Manchester but these were shut down after BA halted the Manchester to New York route. All BA international flights are now out of London, meaning that passengers from regional UK airports must transfer there. As Impact recently noted, people must get a double ticket. BA-IAG has a shocking record in connectivity to the nations and regions of Great Britain, as Senator Sean D. Barrett pointed out in a fine recent article in Phoenix. There are no transatlantic routes from great cities such as Birmingham, Leeds, Manchester, Belfast, Glasgow and Edinburgh, for example. BA has also had a very poor record in connecting both parts of Ireland to the United Kingdom in the past.

Mr. Stephen Kavanagh, the new chief executive at Aer Lingus, has reportedly confirmed by way of letter the company's commitment to working within registered employment agreements, REAs, and will include staff groups which are not covered by current agreements. However, the Minister has said that whenrestructuring is required, he does not think there will be compulsory redundancies. Therefore, the Minister clearly accepts there will be significant job losses on foot of this takeover. IALPA has consistently pointed out that in the long term, the best use of the slots at London Heathrow from Aer Lingus would be to service the London to US market rather than Dublin to London.

Mentioned in the Aer Lingus 2014 annual report is the cost optimisation and revenue excellence, CORE, programme that was launched in 2014 and aims to strengthen price competitiveness. The report states "staff-related efficiency measures were largely deferred in the context of efforts to resolve Irish Airlines Superannuation Scheme, IASS, pension funding difficulties". The report also states, "In 2015, Aer Lingus will seek annual cost reductions totalling €40 million under CORE, an increase of €10 million compared with the original target announced in early 2014".Has the Minister requested any information on how these cost-saving measures will be implemented? By selling the Government's 25.1% stake in Aer Lingus, he is selling any input we have into protecting the jobs. According to the Minister's statement, the Government intends to use the proceeds of the sale for a new "connectivity fund" within the Ireland strategic investment fund. Does the very purpose for these funds not show that connectivity at Cork, Shannon and Knock airports will be damaged by IAG in this takeover? Surely it would have been fairer to address the deficits in the IASS and ensure that deferred IASS pensioners receive the money that is rightly due to them.

Very sadly, I note that Deputy Joe Costello and other Labour Party backbenchers - we must call them the IAG eight - promised at the Labour Party conference that any sale of the 25% stock would be used to resolve the appalling cuts of 60% and more for deferred pensioners.

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