Timmy Dooley (Clare, Fianna Fail)
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123. To ask the Minister for Transport, Tourism and Sport his position regarding the sale of Aer Lingus to IAG; the commitments he will make with regard to the security of employment of the Aer Lingus staff and the connectivity from Irish airports to the UK; and if he will make a statement on the matter. [4656/15]

Timmy Dooley (Clare, Fianna Fail)
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For the last four years the Government has classified the State's shareholding in Aer Lingus as being non-strategic and as suitable for sale, based on a matter of timing. In recent days the Taoiseach appears to have had some divine inspiration and he is now concerned about the potential for a loss in connectivity and an impact on jobs in the State resulting from the potential sale of Aer Lingus. Clearly, the Government's policy position up to now has encouraged the IAG bid and others. Clearly also there has been a change of heart and the stakeholding is now seen to be of strategic benefit. Will the Minister outline to the House how or when that change of heart came about?

Paschal Donohoe (Dublin Central, Fine Gael)
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The many concerns that have been voiced regarding IAG's potential takeover offer for Aer Lingus have been raised when limited detail is available.  It is important to note that IAG has made a proposal to make an offer and that no formal offer has yet been made.

At this point, all we know is what the companies have announced publicly.  IAG has made a number of approaches to the board of Aer Lingus regarding a potential offer for the company. The financial terms of the latest proposal are €2.55 per share and the board has indicated to IAG that these financial terms are at a level at which it would be willing to recommend, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties.  The board of Aer Lingus has also indicated that the latest proposal from IAG remains conditional on, among other things, prior agreement from Ryanair and the Government to accept the offer.  IAG's latest statement yesterday indicates that the company is proposing to offer legally binding commitments on a number of matters.

Under the Irish Takeover Panel rules, I and my Government colleagues are constrained in what we can say at this time. I do, however, hope to get more details over the coming weeks and, if so, these will be examined very carefully against the public interest criteria I have previously set out, including connectivity to and from Ireland, which includes Heathrow and direct transatlantic services, competition, jobs in Irish aviation and the Aer Lingus brand. The Government will make a decision on any offer based on these considerations. I also wish to remind the House that the Aer Lingus Act 2004 requires that the principles of any disposal be laid before and approved by the Dáil before any sale of the Government’s 25.1% shareholding.

Timmy Dooley (Clare, Fianna Fail)
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I do not wish to be facetious about the prepared answer, but the question I asked was straightforward. When did the Government take a policy decision to recognise the strategic interest in the shareholding and the connectivity provided through that shareholding? Will the Minister outline the position better for me? I recognise the limitations placed on the Government by the takeover rules in the State, but notwithstanding this, the offer seems to include certain assurances as regards connectivity, the independence of the airline, the brand and the headquarters. Will the Minister outline how he intends to seek warranties in regard to these assurances? What is the nature of the structure that may be put in place to assure us such assurances will be maintainable and protect the interest of the State in terms of connectivity and jobs retention?

Paschal Donohoe (Dublin Central, Fine Gael)
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The prepared response I shared was to the question submitted to me. On the strategic value of connectivity, the Government has always been extremely fair. It abolished the air travel tax and supported Shannon Airport, made it autonomous and gave it the ability it needed to compete. There are welcome signs of this. The Government has placed aviation and connectivity at the heart of how it has encouraged investment and tourism. Last year alone, well over 7 million visits were made into and out of the country, owing to the level of access we have achieved. This is, in part, due to the decision made by the Government to abolish the air travel tax, which led to a direct increase in travel on routes into and out of the country.

On the nature of a guarantee and what we will propose, the Department expects to make contact with IAG soon in order to clarify what has been said. However, it is up to others to make the case for any takeover bid they wish to make. We are a shareholder and must make a decision in the right and long-term interests of the country. That is what we will do.

Timmy Dooley (Clare, Fianna Fail)
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I thank the Minister for the update on the travel tax. However, my question was simple. It was related to the position taken by the Government in the past four years, that the State's interest in Aer Lingus was not strategic and that it was available for sale. The only proviso was "at a suitable time"; in other words, a sale would probably be based on the share value at the time. This was repeated by the Minister's predecessor and, obviously, Government policy. On Sunday, for the first time, the Taoiseach took the view that the State's interest was of strategic value and tied up with connectivity and access to the outside world. When was the decision changed? The difficulty I have with this is that the late change of heart on the part of the Government has led to IAG coming after Aer Lingus and will lead to considerable costs being incurred by the Government because the Minister has had to appoint consultants to advise him on what is now seen as a political matter. I am concerned that he did not go through the appropriate process and that he did not make it known to the marketplace at a much earlier point that the State had a strategic interest in the shareholding. Therefore, it was not a timing issue, a value issue or a share price issue but much greater and deeper. The Government is guilty and finds itself in a quandary, where it must fight off what can only be described as a hostile attempt by an international corporation to gain access to what is a key strategic asset of the State.

Paschal Donohoe (Dublin Central, Fine Gael)
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If the Deputy feels so strongly about these points, I am given to wonder why he agreed to the privatisation of 75% of Aer Lingus in the first place.

Timmy Dooley (Clare, Fianna Fail)
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I have made that very clear.

Paschal Donohoe (Dublin Central, Fine Gael)
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If he feels so strongly about all the points he has made, I am struck by how he squares that up with what his party did with the company when in government.

Timmy Dooley (Clare, Fianna Fail)
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I will address that in a moment.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy made points about the strategic value of our stake in the Aer Lingus company to the country. We have always been crystal clear that the disposal of such a stake would be dependent on the right terms and conditions being secured and also what the gain for the taxpayer would be in terms of the share within the company. We have remained absolutely consistent to that point of view throughout all of this. We have made clear from the outset that an essential element of the terms and conditions I have referred to, which underpinned the classification of that stake then, was connectivity, competition and the impact on employment within the economy. That will continue to be the criteria against which any formal offer will be evaluated if such a formal offer is made.