Fergus O'Dowd (Louth, Fine Gael)
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Question 1: To ask the Minister for Transport the further steps he will take beyond altering the Aer Lingus articles of association to protect Aer Lingus Heathrow links to Dublin and Cork Airports; and if he will make a statement on the matter. [33197/07]

Noel Dempsey (Meath West, Fianna Fail)
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Arrangements to safeguard Heathrow slots are built into the company's memorandum and articles of association of Aer Lingus. The effect of these arrangements, at present, is to provide for the possibility that any disposal of Heathrow slots by the company can be prevented by 30.2% of the votes cast at an extraordinary general meeting. Some 25.2% of the shares in the company are held by the Minister for Finance on behalf of the State and I understand that the ESOT holds 12.5% and Ryanair 29.3%. The remaining 33% of shares are held by various private bodies and financial institutions.

Also, under the memorandum and articles of association, the State is entitled to appoint three directors to the board of Aer Lingus. Currently, there is only one State-appointed director serving on the board and it is proposed that two further appointments be made in the near future. The State appointees will seek to ensure that all future decisions of the company that have implications for wider Government, aviation or regional development policies are considered and decided at board level. This will give the State appointees the opportunity to raise the public policy implications of each decision and to ensure the full commercial implications for the company are taken into account.

Fergus O'Dowd (Louth, Fine Gael)
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The Minister's reply is inadequate, particularly given the fact that, on 7 October, he told The Sunday Tribune he would immediately appoint the directors. We are now in December. Is it not a fact that there have been vacancies for State nominees on the board since October 2006? It is a measure of the failure of this Government and of the Minister that he has failed to act.

The Minister did not respond to the specific question I asked, which was what further steps he would take. He said he was going to appoint directors with a new mandate. However, what mandate did his current board member have? The fact that two seats have been left vacant means the Minister did not use his mandate.

Everybody seemed to know about the transfer of slots from Shannon, such as the Civil Service, Dublin Airport Authority and Aer Lingus, except the Minister and his predecessor. Does that not represent a complete failure of the Government?

Noel Dempsey (Meath West, Fianna Fail)
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As I said to the Deputy, the appointment of directors will be made in the near future. As I have told him previously, the question of whether the directors had been appointed would not have affected this decision. On the question of what further steps can be taken, that is the only one we can take. Some people seem to have great difficulty getting into their heads the fact that Aer Lingus is a private company, not a semi-State company controlled by the Government or the Department of Transport. It is what it is. The decision has been made and we are satisfied that the alteration to the articles of association to protect the Heathrow slots from disposal are robust. However, we cannot go any further than that.

Fergus O'Dowd (Louth, Fine Gael)
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The articles of association state that if the Heathrow slot was sold or leased, for example, to British Midland, and was moved to Belfast the Minister would intervene, yet the same thing has happened with regard to the slot in Shannon. The primary purpose, as stated by the then Minister for Transport, Deputy Cullen, when he first proposed the sale of Aer Lingus, was to protect the national and regional interest. The Government has failed to do that.

The Secretary General of the Department of Transport said, in an article in the Irish Independent of 29 November, that the Government would be helpless if Aer Lingus moved more airport slots. Is that not an absolute admission of the failure of the Government, particularly given that Deputy Denis Naughten, the Fine Gael spokesperson on aviation, secured a commitment from the Minister to a White Paper on how the slots would be accounted for as part of the privatisation of the company?

Noel Dempsey (Meath West, Fianna Fail)
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The holding of shares in a company does not give the holder the right to run the company on a day-to day basis. The Government's shareholding does not confer any right to influence commercial operations in the company. It would, therefore, be totally inappropriate for a Government to intervene directly in the commercial decisions of the company. Aer Lingus must now operate in a very competitive environment and act in a commercial manner. The directors must ensure it does so and that is the reality we must face. There is no place to hide as regards competition in the aviation sector.

As I said previously, the reasons for launching the IPO are well known. It was a decision that had to be made to ensure there was an Aer Lingus at the end of the day. I have no doubt that, in two or three years, the Deputy would be talking about the failure of Government policy on Aer Lingus if we had not injected the necessary capital to allow it to compete in the sector in the future.