Joe Costello (Dublin Central, Labour) | Oireachtas source

Ba mhaith liom fáilte a chur roimh an Aire. I welcome the Minister and compliment him on his tenacity in dealing successfully with what has been a substantial challenge.

In December 2014, when IAG made its first bid for Aer Lingus, many of us were appalled at the woeful inadequacy of the bid. It appeared to be a predatory bid - a straightforward takeover of the company without protections for the workforce that had made Aer Lingus such a proud, successful international brand. There was no consideration given to the crucial Heathrow slots and the connectivity that was the lifeblood of Aer Lingus. There was no commitment to ensuring the future viability of the regional hubs in Shannon and Cork. Indeed, the valuation of the shares was sloppy and unprofessional and was later improved substantially to reflect a truer value for the company.

Aer Lingus was seen by IAG as simply another company that could be bought and sold through the shareholders, and with the company's directors on board there was little or no consideration for the Irish national interest. The main thrust of the takeover bid was to acquire the 25.1% golden share held by the Irish Government so that henceforth there would be no State involvement in the company. It was expected that once the State's shareholding was acquired, the other main shareholder, Ryanair, with 30% of the shares, would fall into line and sell its shares too. It was a stark scenario, and it posed a major threat to the national interest. Thankfully, the Government said "No".

A group of eight Labour TDs, mainly from the north side of Dublin, were so concerned that we banded together against the takeover bid. We did not go shouting and roaring, as some sectors of this House do at every problem that raises its head. Instead, we took a leaf from the book of James Connolly and James Larkin: we organised. We made our opposition to the deal very clear. We consulted widely with the trade union movement and other stakeholders. We drew up a motion that incorporated our concerns and that needed to be addressed before the sale of the 25.1% State shareholding could be considered. That motion included the concerns of the trade union movement. It was put to the Labour Party national conference in February 2015 and, passed unanimously by the delegates, it became Labour policy.

I wish to put the motion on the record of the House as some Members have referred to it, many inaccurately. It is as follows:

Conference welcomes the Government’s decision to reject the terms of the present bid from International Airlines Group (IAG) for the takeover of Aer Lingus and,

Recognising that:

1. Aer Lingus was formed in 1936 and has established itself as a proud flag carrier for our nation through its 79 year history and remains a potent Irish brand today

2. The Labour Party has always strived to act in the best interests of Aer Lingus throughout its history, in particular opposing the privatisation of the company in 2006 by Fianna Fáil

Acknowledging that:

1.Aer Lingus has demonstrated a robustness and resilience in surviving the worst crisis in the history of the aviation industry after the September 11 terrorist attacks in 2001

2.Aer Lingus has also survived the worst crisis in the history of the Irish economy in 2008

3.Aer Lingus has established a unique pre-clearance transatlantic hub at Dublin and Shannon airports

4.Aer Lingus has achieved in 2014 record high levels of revenue and traveller numbers, which are forecast to continue to grow solidly

5.Aer Lingus is now a very healthy company which is in a strong position to further its own growth plan

Recognising, in particular, the special role played by workers, who had to go through multiple restructuring programmes, in ensuring the company’s survival and continuing strong growth

Conference therefore calls on;

The Government to reject the IAG bid for the state’s shares in Aer Lingus and any further takeover bid that does not clearly address the following:

1.The serious concerns that the bid fails to reflect the true value of Aer Lingus and, therefore, an independent valuation of the assets of the company is required. In particular, a valuation of the 23 Heathrow slots.

2.The need for a firm commitment in the form of Registered Employment Agreements precluding the outsourcing of jobs and/or compulsory redundancies to protect Aer Lingus workers' employment and conditions of employment.

3.Meaningful, reliable and long term guarantees around connectivity and the "Heathrow Slots".

4.The need to articulate a plan which would promote Shannon and Cork airports, taking into account their distinct business models and impact on their individual regions.

These four requirements have been addressed in the new deal that has been negotiated by the Minister and proposed to this House.

In regard to the valuation of the company, an independent valuation has now been carried out by external financial and legal advisers.

In regard to employment, IAG has agreed that a registered employment agreement will be introduced into Aer Lingus as provided for under the framework enshrined in the Industrial Relations Bill 2015 to protect the terms and conditions of Aer Lingus employees and, as the Minister of State, Deputy Gerald Nash, said earlier in the House, those negotiations can start immediately.

Furthermore, Aer Lingus is committed to there being no compulsory redundancies, agreed to extend the application of registered employment agreements, REAs, to new sectors of the workforce, and committed to extending the scope of the REAs. A vital new platform for industrial negotiations in this country has been established not just for Aer Lingus but for the entirety of the trade union movement.

With regard to the key Heathrow slots, the proposed deal will strengthen enormously the Government control over the disposal of Heathrow slots. At present, the Government's 25.1% shareholding cannot by itself prevent the Heathrow slots being sold. The proposed deal will give the Government unilateral power to block the disposal of the Heathrow slots for an unlimited period, a veto that will guarantee crucial connectivity into the future for this island nation. Likewise, there is a veto on the removal of the name Aer Lingus, the removal of the brand and the removal of the headquarters in Dublin.

Regarding the promotion of Cork and Shannon airports, IAG has outlined plans to sustain existing services and to grow Cork and Shannon.

We must remind the House that Fianna Fáil privatised Aer Lingus in 2006 by selling off 75% of the shareholding. At any time there could be a hostile takeover of the company through acquisition of that 75% shareholding, with the Government not in a position to lift a finger. That genie cannot now be put back in the bottle.

None of the Fianna Fáil Members in 2006 that are in the House today ever spoke a word when the debate was taking place. They never said a word about the shameful sale. Not one of them said a word about guarantees. Not one of them said a word about Heathrow slots. They said nothing about the connectivity that they are so worried about now. Not a single attempt was made to protect the workers when the sale took place. Now Fianna Fáil's crocodile tears are flooding into this Chamber.

I listened yesterday to Deputy Adams, the leader of Sinn Féin, state categorically in this Chamber that 1,200 jobs would be lost in Aer Lingus due to compulsory redundancies. That was his statement, and it is on the record of the House. I am afraid that honourable Member is something of a stranger to the truth. I am also afraid that the two Opposition parties are like the emperor; they have no clothes.

I commend this deal to the House. It is an incredible deal considering the situation at the outset and the situation that had to be addressed. I compliment the Minister on a job well done.

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