Seán Crowe (Dublin South West, Sinn Fein)
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Question 79: To ask the Minister for Transport given that the State is one of the major shareholders in Aer Lingus, his views on the recent industrial relations impasse at the airline and the possibility of an upcoming strike; if he has had discussions on this issue; and if he will make a statement on the matter. [6869/07]

Martin Cullen (Waterford, Fianna Fail)
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Ireland's strategic interests in aviation are best served by the provision of regular, safe, cost-effective and competitive air services linking the country with key business and tourism markets around the world.

The Government's main objective in selling a majority of its shareholding in Aer Lingus last year was to provide the company with access to new equity to enable it to compete effectively and to grow its business on short-haul and long-haul routes. As a result of the proceeds generated by the IPO, Aer Lingus now has a unique opportunity to fulfil its potential and to contribute in a positive way to the country's economic development, in line with the Government's strategic objectives.

The conduct of industrial relations is a matter for the company and the State's shareholding does not confer on me a direct role in this matter. As Minister for Transport, I would be concerned that any disruption of services arising from industrial action would inconvenience the travelling public and could also have a negative impact on the economy.

Accordingly, I hope the company and unions will ensure that industrial action, as outlined, is avoided and I encourage them to ensure it is. It is understood that efforts are being made by management to resolve the issues in discussions with the unions with the assistance of the industrial relations services of the State.

Seán Crowe (Dublin South West, Sinn Fein)
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I suppose it is my turn now to be attacked by the Minister; he is in good form today.

I am conscious that the State has a role in regard to the company as it still has a substantial shareholding in it. The State agreed with all the parties involved on the way forward for the privatisation of the company four months ago and it did so in the full knowledge of how matters would proceed. Part of the agreement reached at that time was that if any changes were to be made, there would be consultation and agreement on them, but clearly that has not happened.

The unions and workers involved are talking in terms of the normal existing labour relations mechanisms. They have made four offers at this stage to go down the path of talks with the Labour Relations Commission but management has refused to do that. Does the Minister consider he has a role in calling on the management to use the normal labour relations mechanisms? Does he agree there is a responsibility on the State to become involved, as the State has an interest in this company? However, it is also in the interests of the State that a dispute is avoided by the parties involved using the labour relations mechanisms in place.

I ask the Minister to make a statement urging the parties involved to do down that road. It has been suggested by the unions. The Government, the Minister and the Taoiseach were involved in the negotiations leading up to the privatisation of the company and, therefore, they have responsibility in this matter given that part of that agreement provided that in the event of proposed changes in work practices and so on, they would be made on the basis of consultation and agreement. It is clear that the management has not engaged in consultation or sought agreement on them. It seems to be going ahead with the proposed changes. It went ahead with the introduction of inferior contracts for new workers and it is now talking of going ahead on 1 March with the introduction of inferior contracts for existing workers.

Martin Cullen (Waterford, Fianna Fail)
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I largely agree with much of what the Deputy said. As he is well aware, the Government, the Taoiseach and I firmly believe in the use of industrial relations machinery and that it should always be used to deal with disputes. I always believe that consultation and discussion are far preferable to people not talking to each other. I understand considerable discussion took place between management and unions in the company. I urge that whatever mechanisms are available within the industrial relations machinery should be used.

There is no doubt that the staff and management in Aer Lingus have done a fantastic job compared to other airlines, some of which in terms of international brand names are no longer with us. They went to the wall because they were not able to compete. In terms of traditional State owned air carriers, the company has brought Aer Lingus to the top in terms of its achievement, but there is enormous pressure on the company. Competition is growing daily at Dublin Airport. There is great expansion on the Middle Eastern routes and many new formidable competitors are competing with Aer Lingus. As the Deputy will be aware, we signed a new bilateral agreement with Singapore, which will result in more competition on routes to that region. We are engaged in discussions with China and Thailand. We hope to see the open skies initiative come to fruition, certainly from an Irish perspective. Therefore, Aer Lingus must be very lean, fit and competitive. The best way to achieve that is for all who work in the company to have the focused goal of achieving that end and to not alone maintain the company's position but to see it grow substantially. There is no doubt there is a huge opportunity for it to do so. It has been doing that successfully in the European sphere of operations in recent years. There is a huge opportunity for the company to expand its flights to the Middle East, South Africa, the Far East and potentially to Australia. Therefore, I agree with the Deputy's point in that respect.

I urge all involved on both sides to use the industrial relations machinery available to them. Any industrial action would be potentially damaging for the company, its staff, management and everybody involved. We need to avoid that course of action. The best way to do that is for both sides to get together with the use of industrial relations machinery available to work with them to achieve a positive outcome.

Seán Crowe (Dublin South West, Sinn Fein)
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Is there any mechanism the Department or the Minister could use to kick-start discussions with the parties involved? One party appears to be proceeding with its proposals regardless of the views of the other party or its lack of agreement on the proposals. This dispute affects our national interests. It will affect our economy and the travelling public. If a strike can be averted, there is a responsibility to ensure all available mechanisms are used to avert it. Is there any mechanism the Minister can propose or anything he can do, aside from the public statement he has just made, to urge management to pull back form the brink in regard to this dispute?

Martin Cullen (Waterford, Fianna Fail)
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I do not believe it is ever helpful, and perhaps the Deputy is not suggesting this, to take blame one side or the other. There are complex issues on both sides that need to be dealt with. I respect the different views they evoke in terms of dealing with some of the issues. Both sides have a similar interest, which is the development of Aer Lingus not only on routes to Europe but worldwide, and securing the company as we go forward, making sure it is financially strong, stable, that it has the capacity to enter markets and to continue to grow by purchase, if necessary, of new aircraft. It has a good financial fund available to it, a war chest, so to speak, to do that. That was the purpose of the IPO.

The interests of the management and the workforce in Aer Lingus are the same. We need to get both sides together to make sure resolution of the issues between them can be quickly facilitated. All energy should be focused on the competition and how best to meet it as opposed to getting involved in difficult industrial relations scenarios. I urge both sides to work through this. I attach no blame to either side in the sense that I understand and respect the points of view of both sides. They are complex issues, but they are capable of being solved in regard to developing Aer Lingus into the company we all want it to be.

Seán Crowe (Dublin South West, Sinn Fein)
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It is only four months since that agreement was reached.