Timmy Dooley (Clare, Fianna Fail)
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To ask the Minister for Transport, Tourism and Sport his intentions with regard to the State's holding in Aer Lingus; and if he will make a statement on the matter. [57533/12]

Alan Kelly (Tipperary North, Labour)
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The question relates to the Minister's intentions concerning the State's shareholding in Aer Lingus. This shareholding is one of the assets included in the State asset disposal programme and the Government has agreed that the shareholding is to be sold at an appropriate time but only when market conditions are favourable and at an acceptable price to be agreed by Government. A steering group has been established to progress the sale and to examine the potential disposal options and the issues that may need to be addressed in the context of the disposal. The steering group is chaired by my Department and comprises representatives from the Department of Finance, the Department of Public Expenditure and Reform and NewERA.

NewERA continues to provide advice and expertise to the steering group.  In view of the complexities involved in this particular disposal, NewERA has recently tendered for the appointment of an adviser to undertake additional analyses focused on evaluating the best options for a disposal in order to maximise the return for the Exchequer while protecting the interests of the consumer and preserving a competitive environment. As the Deputy will be aware, the European Commission is currently conducting a phase two investigation of Ryanair's offer for Aer Lingus under the EU merger control rules.  The Commission's decision is due in early February 2013 and my Department continues to closely monitor the case.  Irrespective of the outcome of that investigation, the Government has decided it is not in principle prepared to sell its shareholding in circumstances which could significantly impact on competition and connectivity in the Irish market. The Deputy is well aware of the Government's decision in the past few days not to sell this shareholding to Ryanair.

Timmy Dooley (Clare, Fianna Fail)
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I am aware of the Government's position in the last number of days. Nevertheless, I am somewhat troubled that it took six months to come to the conclusion that it would be the wrong decision for the State to dispose of its shareholding in Aer Lingus to Ryanair. I am concerned that this came on the back of an announcement or rather what appears to be leaked information provided to the Commission by Ryanair. This indicated how the airline could get around the anti-competitive nature of an amalgamation of the two airlines and outlined a notion of selling the Heathrow slots to British Airways. Quite correctly, that struck fear into the minds in the Government and force action on the issue. I am disappointed that it took so long for the Government to recognise the very real challenge that the amalgamation of the two airlines would pose to competition, air fare competitiveness and both business and tourism interests.

Is the Government confident this move will stop Ryanair acquiring Aer Lingus and has the Government had any indication from the European Commission about the likely outcomes? Will the Government stance carry much weight with the Commission? What is the reason for the delay in the decision? I do not understand why it took so long, and it gave some level of confidence to Ryanair that the Government was at least considering the matter. That was unhelpful.

I am somewhat troubled by the notion that the Government is still pursuing through NewERA the disposal of the shareholding. This is not about partisan politics. Ryanair is a very effective company, and although a trade sale to Etihad Airways or British Airways may seem helpful, it is certainly not beyond the capabilities of Ryanair to acquire the shareholding at a later stage. One could not be confident in just doing a trade sale to Etihad Airways or another international player as that will not ring-fence the very important competition which exists between Aer Lingus and Ryanair. I do not believe that will put the Heathrow slots beyond the attraction of other airlines.

Alan Kelly (Tipperary North, Labour)
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I am glad the Deputy welcomes the Government's decision, which was correct. In one sense the Government very much needed to consider the case and make the decision and there was no delay in making the announcement. No information is available on how the Commission will act and I would not have expected the Deputy to believe such information is available. We know there is a defined time for the decision and the Government has taken much cognisance of it.

As I am sure the Deputy is aware, Ryanair has produced a package aimed at overcoming competition issues. It is solely a matter for the European Commission to make a decision on this issue within a specified timeframe. The Government will await the Commission's decision.

The Government made the correct decision in this matter for many of the reasons the Deputy outlined. I am glad the Opposition welcomed our decision. We will sell the State's share in Aer Lingus under our policy of disposing of State assets. This will be done at the opportune time and when it is of the greatest economic benefit to the country to do so. None of us can predict when that will be, however.

Timmy Dooley (Clare, Fianna Fail)
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The disposal of State assets is an important component of the Government's NewERA agenda. While it may be prudent not to sell the State's share in Aer Lingus to Ryanair today, it is possible that Ryanair will acquire the State's shareholding by a circuitous route or through a third party within a short period of its being sold. The share in Aer Lingus is of much more strategic value than the Government has indicated. For this reason, I will strongly oppose any decision to sell the 24% stake in the company.