Timmy Dooley (Clare, Fianna Fail)
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114. To ask the Minister for Transport, Tourism and Sport if he will provide an update on his position, regarding the sale of the Government's shareholding in Aer Lingus to the International Airlines Group; the nature and character of any assurances sought from the group on connectivity, jobs and the management structure at Aer Lingus; and if he will make a statement on the matter. [10010/15]

Timmy Dooley (Clare, Fianna Fail)
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Could the Minister outline to the House the current status of the discussions between the Department and the interest group that was set up to involve itself in dialogue with IAG on the notion of the purchase of the State's shareholding in Aer Lingus? Along the way, the Taoiseach mentioned that he was interested in seeing specialised or "cast-iron" guarantees in relation to the sale around issues such as employment and connectivity. Could the Minister, Deputy Donohoe, outline also the nature and character of the assurances that were sought as part of those discussions with IAG?

Paschal Donohoe (Dublin Central, Fine Gael)
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As I stated previously, as Aer Lingus remains in an offer period under the Irish takeover rules, I am constrained in what I can say publicly on the matter, as these rules apply to significant shareholders in some regards as well as offerors and offeree companies during an offer period. However, I did make a detailed statement clarifying the Government's position on the matter last month.

While acknowledging the details and clarifications which both IAG and Aer Lingus have offered since IAG announced its initial proposal to acquire Aer Lingus, it is the Government's view that the IAG proposal does not at present provide a basis on which we could provide an irrevocable commitment to accept an offer. Further consideration of any IAG proposals will be based on having greater clarity from IAG on the overall employment prospects on the basis of the proposals received, with particular reference to the timeframe within which net additional employment would be created; firm commitments on plans for growing Aer Lingus' transatlantic business; and plans to grow Aer Lingus' routes at Cork and Shannon and to enhance the Knock-Gatwick service. The Government also requires a longer period on the commitments related to Heathrow. The nature and acceptability of oversight mechanisms on the Heathrow slots and routes needs to be confirmed. These would also be subject to any EU considerations.

As I stated last week, the Government, in line with stated policy, remains open to considering any improved proposal. On Wednesday last, the Government's interdepartmental steering group held a further meeting with representatives from the consolidated International Airlines Group at its request. Further meetings are expected.

Timmy Dooley (Clare, Fianna Fail)
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I thank the Minister for his reply although he has not added anything to our knowledge. While I understand the issues around takeover rules, it would be possible for the Minister to outline to the House the kind of assurances he has sought. I understand he was seeking assurances on particular areas but I am interested in the nature and detail of those assurances. I am concerned that in the context of any contract that the Minister might enter into based on assurances given by IAG, the only remedy in the event of a breach by IAG of those assurances would be sought through the courts. As I have said before, the likely outcome of such proceedings if a breach was found to have happened would be that State might receive some financial compensation. While that might benefit the State in some way, the loss of access to Heathrow for locations like Shannon and Cork could not be compensated for financially. Furthermore, it is unlikely that it would be open to the courts to insist on the retention or recovery of access to Heathrow. That is why it is extremely important for the Minister to put before the House the nature of the assurances sought and the mechanism he intends to put in place to deal with the fallout in the event of there being a breach of such assurances and a failure to comply with any contractual arrangements that might be entered into.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is now very much a matter for IAG as to whether it wishes to make a further proposal which we would then consider in the way I have outlined. In response to the Deputy's specific question about the nature of assurances, we have not received any further assurances beyond the proposed deal that IAG made available a number of weeks ago which I have said was not acceptable to the Government and which did not provide the basis upon which I could give an irrevocable commitment to sell our share in Aer Lingus. Regarding the Deputy's point on access, we have always made clear that in evaluating any proposed bid we would look beyond the price of a share, important as that is and I have always specifically referenced access as being vital in our considerations.

Timmy Dooley (Clare, Fianna Fail)
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I appreciate that the Minister recognises the importance of access but I contend that if he really believed in its extreme importance, he would have to question whether the State should even be negotiating with IAG about the sale of the State's share holding. My contention is that once we sell the State's share holding, our capacity to influence the retention of access to Heathrow from Shannon and Cork is diminished absolutely. In other words, any assurances backed up by letters of warranty or any contractual arrangements that might be entered into have no long-term capacity to be maintained. The State will have no power to maintain those links. At best, in the event of a breach of contract, the State will get some financial compensation which in no way has the capacity to meet the needs and demands of the locations and jobs which are supported by access to Heathrow.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is very important to be clear about the legal powers of the State at the moment. As the Deputy knows, the power that our shareholding confers on us at the moment is the ability to play a role in blocking the disposal of slots at Heathrow but not in determining their use. I must emphasise again that maintaining and growing access for our country, with particular focus on what will happen at airports such as Cork and Shannon, is core to how the Government and I will evaluate this proposal.