Brendan Ryan (Dublin North, Labour) | Oireachtas source

I welcome the opportunity to speak to the motion. When the initial offer from IAG was made in January, it was deemed unacceptable to the Government. Acting with my Labour Party colleagues, I played a key role in ensuring the initial offer which was bad was not accepted. From the very beginning, we have been criticised from all sides, including right-wing media commentators for being parish pump politicians only interested in grandstanding and seat-saving gestures and the far left for not folding the tent of the Government and calling an election on the grounds of State assets. Unfortunately, we do not have the luxury of being able to act in a space without consequences.

Once a bid was made for Aer Lingus, we had to respond in the world as it was, not the world those in Sinn Féin or the far left pretended it was. Unlike the ESB and Ervia, Aer Lingus is not a commercial semi-State company. It is a private company with shareholders, of which the State is one. The company has always been subject to a takeover bid. We saw such a bid previously from the low cost airline Ryanair and this bid has come from IAG.

The Opposition would have the public believe a dismissal of any offer, on the grounds that the State's 25% share is not for sale, would have no effect on the company at all. That is simply not true. If we had dismissed the bid on the grounds of well meaning ideology, that in this case the Government's stake in a private company was not for sale, there would have been consequences. The company's value is set by the market's view of how much the company is worth. If a company is not for sale, in essence, its value will plummet. These are not rules created by the Labour Party. Unfortunately, that is the reality in the world in which we all live and no amount of roaring or screaming to the contrary will change it. Therefore, it was not an option to dismiss the offer out of hand. If the company's value had plummeted, the company would have been vulnerable to further cost saving measures.

The leader of Fianna Fáil in the Seanad said Labour Party Deputies, including me, had said, "we would not sell under any circumstances". That was never our position. We never said anything of the sort. Our position was that should a sale take place, certain conditions would have to be met, concerning connectivity, independent valuation, workers' terms and conditions and a plan for the regions. This was included in our motion at our party conference and is a matter of record. The misquoting is another example of what we have gone through in the past four years, in being pulled between the left, the right and populist and enduring criticism of our attempts to do the right thing to get the country back on track and create jobs.

By the end of next year, IAG expects to create approximately 150 net new jobs in Aer Lingus. By 2020 the plan is to have created 635 high quality jobs, including pilots, cabin crew and engineers. This takes into account the approximate 50 job losses as a result of the takeover, none of which will be compulsory. There are up to 487 applications in the pipeline for voluntary severance packages. It is also important to note that all of the airports have come out strongly in favour of the takeover, including Shannon and Cork. The regions are happy with it. Unlike the Opposition, politicians in the regions see potential in the deal to achieve further growth in terms of job creation and tourism, which is welcome. The Opposition is stoking up fear, among the workers in particular, that the deal is a Trojan horse which will serve to bring a great airline into ruin.

The company has committed to entering into registered employment agreements under the framework enshrined in the Industrial Relations Bill 2015, as introduced by the Minister of State, Deputy Gerald Nash, to protect the terms and conditions of Aer Lingus employees. Does any of us have a crystal ball through which we can gaze into the future? No, we do not. We all need to act on the best advice and information we have available at a particular time. As I mentioned, taking the option to reject any offer out of hand would have had a detrimental impact on the company. What would happen if the offer was rejected and followed by a hostile offer down the road? If an offer had not been accepted, it would have offered no surety on the employees' terms of employment, connectivity or a plan for the regions.

It has been said before and is worth restating, Aer Lingus is a private company, having been privatised by Fianna Fáil. The State's share was retained solely to ensure guarantees in respect of connectivity and the Heathrow Airport slots. We have received that guarantee in the making of this offer. The Minister for Finance will have the ability to block any proposed disposal by Aer Lingus of any of its Heathrow Airport slots indefinitely. This provides stronger protection for the State than the current arrangement, under which the State cannot prevent a reallocation, reassignment or cessation of use of the Heathrow Airport slots. The Minister for Finance will also be able to block a proposal by Aer Lingus to change its company name, brand and head office location and place of incorporation from Ireland. This commitment is unlimited in time and provides protection that, again, is not available under the current arrangement.

Instead of using the proceeds of the sale to pay down debt, the Labour Party has ensured the proceeds from the sale will be reinvested, through the strategic investment fund, in transport and other connectivity projects only. Questions have been raised about proceeds from the sale being used for other purposes such as for IASS pensions. The Minister for Public Expenditure and Reform was clear that, legally, funds from the sale could only be used through the the strategic investment fund for specific connectivity purposes.

We acknowledge and share an emotional position from which one is reluctant to divest State ownership, but it would be very wounding if funds from divesting the State's share in Aer Lingus were used to write down Fianna Fáil's legacy debt. It is welcome that funds from the sale will be reinvested in much needed infrastructure. This infrastructure is sorely needed, owing to years of Fianna Fáil waste and over six years of budget deficits which have stifled our ability to grow and invest.

In summary, being in government is about making decisions and choices. In its time Fianna Fáil made poor decisions. Sinn Fein makes populist soundbites. Those on the far left never want to make a decision. We chose to go into government in the knowledge that we would be making tough decisions. This is one such decision. If we had accepted the initial offer, it would have been a bad decision for the airline and the country. If we had dismissed it out of hand, it would have been a populist gesture. Most populist decisions have consequences and these consequences would have had a negative impact on the company and its workforce. We had to make a decision. Our decision was not to sell to a vulture capital fund, which is what ultimately happened when Fianna Fáil privatised eircom. Neither did we roll out the red carpet to a low cost airline. We have considered an offer from one of the major players in the global airline industry, an industry which is going through a period of consolidation. Was it an easy decision? No, it was not. Are we certain everything will be rosy in the garden in the future? No, we are not. How could we? However, this is a good offer which has the potential to be of major benefit to Aer Lingus, the country, current Aer Lingus workers and the many new workers who will take up the high quality jobs that will come on stream.

I want to refer briefly to the dynamic of the debate in the past couple of days. I arrived quite late at a Labour Party briefing on Tuesday afternoon - it had started at 4.30 p.m. - to discuss what might be agreed at the resumed Cabinet meeting later. I looked at a letter from Mr. Stephen Kavanagh, CEO of Aer Lingus, to the Minister, Deputy Paschal Donohoe, which had been provided as evidence that the REA requirement included in our Labour Party conference motion had been delivered on. I stated immediately that it had not delivered on it and that the letter did not go far enough. It was woolly and not specific enough. It got into the public domain later on Tuesday. Our discussion on the matter continued into the evening. An important phrase in the press release from me and my seven colleagues late on Tuesday largely went unnoticed, but it indicated that we had unfinished business in regard to REAs. That phrase read: "Between now and the formal completion of the sale, we will continue to work towards ensuring that the REAs deliver the best possible outcome for the workers involved". This was not just padding but a considered inclusion. Work on that unfinished business resumed the next morning at a further scheduled briefing with the Minister and, importantly, Mr. Kavanagh who was questioned by a number of people about the meaning of the letter and what could be taken from its contents. I told him directly that a revised letter to the Labour Party chairman, Deputy Jack Wall, with more specific commitments around REAs would be required to secure all of the votes on the deal on Thursday. There was agreement that efforts would be made by the Minister of State, Deputy Gerald Nash, and Mr. Kavanagh in the time before the vote to come up with the revised letter requested. I am happy to say the commitments given in the new letter from Mr Kavanagh, negotiated and signed off on by the Minister of State last night on behalf of the Labour Party and the Government, address the REA element of the Labour Party conference motion. I understand unions at Aer Lingus recognise the progress made and I am now more comfortable with how I will cast my vote later today. I am quite certain that the improved offer from IAG is due in no small part to a group of backbench Labour Party Deputies working together in a focused way to secure the best possible deal to secure the future of Aer Lingus and its workforce in the interests of the country as a whole and the regions.

I want to read a paragraph from the letter we received from Mr. Kavanagh to the Minister of State which was copied to Deputy Jack Wall.

In the fourth paragraph he states:

I am also committed to the principle that Aer Lingus would not utilise compulsory redundancy or a movement to non-direct employment in a scenario where the changes and efficiencies that the business requires can be achieved through flexibility and mobility internally delivered by staff and their trade union representatives. We would now envisage engaging with the trade unions in this regard. This engagement would be designed to agree a formal approach to enshrine this principle and the method of its implementation in a collective agreement or agreements. The company is prepared to undertake to register these agreements under the terms of the enabling legislation.

That is a major move forward in terms of providing security of employment for the current workforce and new workers in the future.

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