Robert Troy (Longford-Westmeath, Fianna Fail)
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Question 9: To ask the Minister for Transport; Tourism and Sport if he will confirm his position on the sale of the Government's share in Aer Lingus; and if he will make a statement on the matter. [26615/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 11: To ask the Minister for Transport; Tourism and Sport his plans for the State stake in Aer Lingus and the rationale for these plans. [26569/11]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 9 and 11 together.

These questions relate to the sale of the Government's stake in Aer Lingus. The Government recently considered the various options open to it in terms of generating revenue from the sale of State assets, including the recommendations of the State assets review group in the McCarthy report. That report recommended that the Government dispose of its shareholding in Aer Lingus "as soon as is opportune" but no decision has yet been made by the Government on a disposal of the State's shareholding in the company.

In addition to the Government's recent decision to sell a minority stake in the ESB, the Government also agreed that it is prepared, in principle, to undertake further asset sales. A process has been initiated to consider a number of potential assets in this context. The State's shareholding in Aer Lingus will be considered as part of this process.

A group, led by the Department of Public Expenditure and Reform, and including my Department, other relevant Departments and the NTMA, will consider possibilities in this regard and advise the Government on the appropriate valuations to be placed on the assets in question. The group will also advise on the most appropriate method of disposal, the likely timeframe and economic impact of any such disposal, in order to inform any further decisions that the Government may wish to make in this regard.

Robert Troy (Longford-Westmeath, Fianna Fail)
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We still do not know what the Government's position is on this matter. That is the fundamental point. If the sale goes ahead, will the money be reinvested in the economy or will it be used to bring down our debt?

Leo Varadkar (Dublin West, Fine Gael)
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The only definite decision that has been made by the Government on the sale of State assets is the sale of a minority stake in the ESB but there are a lot of other candidates for further State asset sales, including Aer Lingus. A lot of work must be done first, before the Government comes to the point where it is willing to sell that stake, both in terms of scoping out potential buyers, seeing what terms and conditions they may be willing to accept as part of the sale, and also sorting out the pension deficit which is the main issue now devaluing the company. The company would be worth a lot more if the pension deficit can be sorted out by the end of the year. All those things have to be done first before a final decision can be made on the sale of the State's stake.

Discussions are now underway between the Troika and the Government on whether we will be allowed to reinvest the money in the economy. It is the Government's view, and very much my view, that at least some or most of the money that can be raised from State asset sales should be reinvested in the economy - in infrastructure and jobs. There would be a lot more enthusiasm in the Government for going ahead with State asset sales if that were the case.

Dessie Ellis (Dublin North West, Sinn Fein)
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It seems fairly clear that there is an intent to sell the rest of the Government's stake in Aer Lingus. That is a shame because Aer Lingus has served the country well as the flagship airline for many years. In addition, it has delivered a profitable organisation. What is probably holding up the sale of Aer Lingus at the moment is the pension fund. That is another issue we will have to deal with but it is a shame that we are going down this road.

We are blaming the Troika and Europe for the fact that we have to get money. The Minister said he does not even know whether, in selling the rest of Aer Lingus, we will be able to invest that money in other projects to create jobs. We will possibly end up with Ryanair in control of our main airline, which is a shame. A private company will be in charge of our national airline. We saw what happened over the years when private companies take over. They cut jobs and tend to pay a lot less to the remaining workers. We are heading down that road now. We had a profitable State-run institution in Aer Lingus. It is not fully State-owned, although it should be. I appeal to the Minister not to sell of the rest of the State's stake in Aer Lingus. It would be a shame and should not happen.

Leo Varadkar (Dublin West, Fine Gael)
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Aer Lingus is a private limited company and is traded on the stock market. It is not a State-run company by any means. It just happens to be a private company in which the State has a 25% stake.

Dessie Ellis (Dublin North West, Sinn Fein)
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That is right.

Leo Varadkar (Dublin West, Fine Gael)
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There is no question of Ryanair taking over Aer Lingus. The European Commission has ruled that it may not do so on competitive grounds, and I support that. In fact, Ryanair has expressed a willingness to sell its stake. The Ryanair and Government stakes together make 54% of the company, which could be very valuable and potentially of great interest to a buyer.

The key question we have to ask ourselves about the 25% stake is what is the value to the State in retaining it. Do we get a dividend from it? No, we do not. Does it give us any control of the company? No, it does not. We saw that when Aer Lingus pulled out of Shannon. For example, does it allow us to hold on to the Heathrow slots? No, it does not because one needs a 30% vote at an extraordinary general meeting to do that.

The issue of leave and return of employees arose in Aer Lingus where the company found itself paying a lot of money to the Revenue Commissioners because of this strange arrangement it had concerning leave and return. I met the three Government-appointed directors of Aer Lingus on this issue and they could not tell me about it because it is a secret, even though we own 25% of the company. That gives the Deputy an idea of how valuable the stake is.

Robert Troy (Longford-Westmeath, Fianna Fail)
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The Minister said he was in negotiations with the Troika in terms, and I agree with him, that any capital raised should be put back into the economy. Does the Minister have any timeframe as to when we will know whether or not they are agreeable to that?

Leo Varadkar (Dublin West, Fine Gael)
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That is probably more a question for the Minister for Public Expenditure and Reform, Deputy Howlin, or the Minister for Finance, Deputy Noonan, than for myself. In the programme for Government, however, we are supposed to agree a list of assets to be sold in October-November, so I imagine it will be in that kind of timeframe.

Dessie Ellis (Dublin North West, Sinn Fein)
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I acknowledge that we have 25% of Aer Lingus but we should have full ownership. We should not have got to this point where we have allowed a private company to have more than the State's stake in what was a State-run company. I do not think we should be selling off the rest of our State assets. It is short-term thinking. We have a profitable airline which has delivered great value to the Irish people, not just in terms of jobs but also in tourism and what it has given to the nation.

Joan Collins (Dublin South Central, People Before Profit Alliance)
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It will be a great surprise to people that the State's 25% stake in Aer Lingus is what the Minister says it is. It was sold on the basis that the 25% would protect the airline and keep it in State control. The key benefit of having that control - I would like to hear the Minister's opinion on this - is that as an island nation we will not have to depend on a private business to run our airlines. We need those strategic assets to run our country and should not sell them off to the highest bidder.

Leo Varadkar (Dublin West, Fine Gael)
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Aer Lingus is a private company and so is Ryanair. Therefore we do have private companies that control air access to Ireland. That is already the case. It is also the case for Britain, for example, where British Airways and British Midland are not owned by the state. It is not that unusual and I am sure it is also the case for other island nations.

It may well have been the case that at the time of the sale of the 75% stake in Aer Lingus, the remaining 25% stake was held for strategic reasons but it did not turn out that way. We saw that when Aer Lingus pulled out of Shannon some years ago and there was nothing the then Government could do about it. As regards the Heathrow slots, we know now that the 25% stake is not enough to block sales. One would have to form an alliance with other shareholders to do so. In addition, the slots are not as important as they were in the past.

In terms of getting information from the company, although we own a 25% stake we cannot even see the report on leave and return of employees because it is a secret which the board is keeping to itself. That gives the Deputy a rough idea of the value of holding that stake.