Dáil debates

Wednesday, 7 June 2006

3:00 pm

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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Question 58: To ask the Minister for Transport the reason he has insisted on the privatisation of Aer Lingus without adequate and satisfactory consultation with the unions and without agreement from the majority of the national airline's employees; and if, in view of such opposition, he will reverse his decision. [21882/06]

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I do not accept that I have not consulted satisfactorily with Aer Lingus staff or trade unions on the planned investment transaction for Aer Lingus. Prior to the Government's decision in May of last year to reduce its shareholding in Aer Lingus to facilitate equity investment in the company while retaining a significant stake, I consulted the trade unions on the company's future ownership structure and funding requirements, as required under the terms of Sustaining Progress. Since then and prior to the decision in April this year on the basis on which an investment transaction will take place, I met a delegation of Aer Lingus trade unions and officials from the Irish Congress of Trade Unions on three separate occasions, in June 2005 and on 2 March and 3 April this year.

In addition, the agreement reached with the Aer Lingus trade unions concerning the employee share ownership plan, ESOP, provides for a consultation process with regard to any third party investment in Aer Lingus. Pursuant to that agreement, departmental officials, the advisers to the Minister for Finance and I have met on a number of occasions the advisers to the Aer Lingus employee share ownership trust, ESOT, and the Aer Lingus central representative council. The latter is the representative body of all the Aer Lingus trade unions.

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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I expect the Minister is aware that many of the union representatives are dissatisfied with the so-called consultation. Does the Minister understand consultation to consist essentially of him informing the workers' representatives about what he intends to do or is there a genuine consultative process involved?

As regards the meetings, the Minister's strategic plan states that he will sell off Aer Lingus in the long term. Does he accept that now is probably the worst time ever to so do, particularly in view of increasing oil prices and the prospect of falling passenger numbers and profits? For example, one may consider the difficultiesencountered by Air Berlin, which recently floated on the stock exchange. Employees' shares were diluted and the expected money was not realised from the flotation.

The workers are in the dark at present. When will the Minister inform them as to what will happen to the company? There has been much stalling on this matter since 1992. What timescale does the Minister envisage in respect of the sale and is commercial investment completely off the agenda? Although Ireland is a hub at present, is the Minister concerned that it will cease to be so after the possible sale of Aer Lingus and will become more of a backwater? I will be interested to discover his view in that regard.

As regards the consultations, those to whom I have spoken are dissatisfied with the Minister's involvement therein. While I am aware that he will meet the unions again tomorrow, people expect consultations to be a two-way process. Until now, the Minister has not taken on board the concerns of the workers, particularly with regard to their pensions and so on.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Since the start of this process, I have been direct, open and straightforward with all the unions. They know and appreciate that. I have also behaved similarly towards management and have no difficulty with meetings or consultations. While I have been clear on the issues, some of which were raised by the Deputy, I will not comment on them now. They are part of the process and I wish to see conclusions drawn on them.

I accept that, from an ideological perspective, some people are opposed to the sale. While that is fair and while I respect their position, it does nothing to develop the company into the future. Although the Deputy mentioned another airline, despite the efforts of some to suggest otherwise, there is no comparison between it and Aer Lingus. The other airline has been a loss-making company for the past five years and it operated in a different type of market to Aer Lingus.

Aer Lingus is profitable. For a company to go to the market, it must be profitable. It is, therefore, the right time to do so. The business plan presented by Aer Lingus is significantly geared towards the future. I negotiated the open skies deal from an Irish perspective with regard to a transition period for Shannon. I travelled to the United States and met the Secretary of Transportation, Norman Mineta, and have had close relationships with the EU Commissioner for Transport, Jacques Barrot. I have engaged in considerable dealings with the various EU presidencies regarding this issue. This is the right time for growth in airports, airlines and passenger numbers. I do not accept the Deputy's view that passenger numbers will decrease.

While the question of fuel is undoubtedly an issue for all airlines, Aer Lingus has coped well in this regard. All international long-haul airlines, including Aer Lingus, have a fuel surcharge and it has not affected passenger numbers. Those airlines which state that they do not levy a surcharge are short-haul operations. I understand that no short-haul operations have added surcharges on short-haul routes.

When everything is considered, it is evident this is a good period. I appreciate the work being undertaken by the unions with the management in the company. I also appreciate the work of all those who advised the unions, the Minister for Finance, his Department and me. It has been a good process, which has been very communicative. However, it must come to a conclusion. We are ready to go to the market and we must do so. It is the correct thing to do to provide Aer Lingus with a major future. Failure to do so would cripple the airline and tie its arms behind its back, making it impossible for it to compete on a level playing field. Neither I nor the Government will preside over such a scenario.