Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I have yet to hear from the Government a compelling rationale for the sale of the State's 25.1% share in Aer Lingus. The manner in which the Government has handled the Dáil in this debate has been shameful and shocking, given the fact that there has been a lack of any transparency and honesty in the presentation of the facts, particularly as they relate to workers. Given the revelations in the Nyras report, it is now imperative for the Government to suspend today's debate and vote, and allow Deputies to tease these issues out properly at the Committee on Transport and Communications.

The problem is that the Government always prefers spin more than substance. It is always about telling a good news story as opposed to the realities that are inevitably down the line following the sale of this 25.1% share. That is revealed in the Nyras report. The Taoiseach said yesterday that he was not aware of that report and had no knowledge of it. Did the Minister for Transport, Tourism and Sport, Deputy Donohoe, have any knowledge of it? Did the executives in Aer Lingus show him this report? Did the Minister taken the decision to recommend the sale of Aer Lingus without any inkling or knowledge of this report?

Was he aware of it? It is quite significant. Despite what was said this morning on the radio by the chief executive officer of Aer Lingus, it is about staff and cost-cutting. It is not just cost-cutting agreements with outsourcing companies and so on. The report compares Aer Lingus with Vueling and EasyJet and it is all around costs. With regard to seasonality and legacy staff, it states:

Aer Lingus self-handles at Dublin, Cork and Shannon at an average cost of €1,326 per turnaround. However, the relatively inflexible labour agreements increase this cost to €1,432 in the winter, thus adding €2.3 million to the cost base.

The Minister knows what that means. In referring to "inflexible" labour agreements, we are going to change that. The report continues, "In addition, the legacy staff costs, compared to EasyJet's market rates, adds €12 million of costs." The report continues and refers to how reviewing each of these in collaboration with the commercial team "could be a profit improvement opportunity."

There are other comparisons. The report indicates that the ground handling costs of Aer Lingus are higher than both EasyJet and Vueling by 30% and 45%, respectively, for each turnaround. The report indicates that Aer Lingus self-handles at its Dublin, Cork and Shannon stations, whereas EasyJet and Vueling are outsourced. There is a clear implication in that. The report indicates that the main challenge for Aer Lingus is to review clearly its desired product offering and define a new lean model, which can form the basis for "restructuring" labour agreements to provide seasonal and daily flexibility. No wonder the letter from IAG is so meaningless and no wonder it is a classic of its kind in seeking to camouflage what will really happen. IAG cannot give the commitments that the Government wanted and which it is trumpeting to unions. It is in black and white in the report where this is heading.

The report continues by stating that a leaner structure will help to reduce self-handling costs and provide a basis for renegotiating with third-party handlers and so on. Vueling, the company that Aer Lingus is being compared with, is known for having very aggressive employment contracts; they are the lowest in Europe, alongside Wizz Air and Ryanair. EasyJet use Vueling's pilot contract as a template for its Lisbon operations. Vueling deliberately pays cabin crew low salaries to encourage staff turnover. Average turnover is 40%, with ideal tenure at six to 12 months. The report argues that Vueling seems to be very good at dealing with extreme seasonality in this way. The report analyses per-seat pilot costs. Aer Lingus utilisation is 715 hours per pilot whereas EasyJet's is nearer 850 hours. The Aer Lingus pay structure, particularly for long-service staff, is responsible for part of the cost gap, according to the report.

I am listing all these elements as it is very clear where we are heading. Nevertheless, the Government is painting a totally different picture and is not telling the truth. There should be a wider debate about this. I expect there will be a wider debate. In agreeing the sale of 25% of Aer Lingus, we are being asked, on the Government's recommendation, that we collude and go along with the process without question or even having the decency to tell people as it is in real terms.

EasyJet, for example, has fewer pilot crews per aircraft, according to the report, and it achieves a higher level of overall productivity in how it utilises pilots and so on. It has 2,000 pilots working an average of 850 hours per annum, compared with Aer Lingus pilots working 715 hours per annum. The implications of that are very clear with respect to pilot and staff conditions but there has been no discussion about that. Crew costs also loom large. The report indicates that EasyJet addresses line maintenance seasonality by outsourcing but Aer Lingus has a fixed line maintenance cost with additional inter-check work in the winter season. It states that Aer Lingus employs 100% licensed engineers, so what does that mean? What is the implication of that? This morning, we were told this report was only about costs relating to outsourcing and how better deals can be achieved with different companies. The clear implication is that Aer Lingus should outsource more operations and get rid of permanent and longer-term staff. That is coming right through this report. The idea is that the younger the staff, the lower the cost and so on. That is the nature of the report.

There is an onus on the Government and the board of Aer Lingus in making its presentation to the Government to make available this report. Is that what we want? There is no point having low pay commissions etc. if we are just going along and nobody is shouting "Stop". Piketty writes in his major tome about the growing gap between worker pay and corporations and this is a big issue in society. I have been reflecting on this and it is something we must debate.

The report indicates that the administrative staff support costs in Aer Lingus are too high, as the basic salary costs for managerial and support staff in Vueling is low. It goes through its administrative head count and compares it with Aer Lingus. We all know, thanks to the publication of the Nyras report, where all this is heading. The report states with respect to staff count that "Aer Lingus's ground-based operational and administrative head count equates to 55 full-time equivalents per aircraft, five times as high as EasyJet's 11 full-time equivalents per aircraft." It indicates that after adjusting for the fact that ground handling and catering are outsourced by EasyJet and there is no cargo operation, Aer Lingus has 40% more staff per aircraft than EasyJet, with the cost advantage to EasyJet at €13 million. This implies that Aer Lingus is heading in the same trajectory as the Vuelings and EasyJets of this world, which has serious implications for staff working in Aer Lingus. Instead of doing a snow job and pretending all is rosy in the garden-----

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