Wednesday, 27 May 2015
The Taoiseach must accept that his attitude to this House, in terms of the manner in which he has facilitated the debate here today on Aer Lingus, is one of contempt. Yesterday, when asked questions in the Dáil the Taoiseach refused to answer them and then held a carefully orchestrated event last night to announce the sale of the remaining 25.1% shareholding in Aer Lingus. The Dáil has been treated in an appalling manner, despite an agreement with the transport committee that this matter would be referred back to it. Why is the Government ramming this motion through the House and why does the Taoiseach continually show such contempt for this House and its Members?
In regard to the sale itself, can the Taoiseach give the underlying reason for the necessity for the sale of the 25.1% shareholding and can he indicate whether he has had sight of the Nyras report commissioned early in February between Aer Lingus and IAG, which compares the airline to low cost airlines such as Vueling and EasyJet and states that Aer Lingus has a 40% higher cost base? Essentially, the report identifies job cuts in particular areas as part of, "Cost Reduction Phase One". I understand this report has not been published and is confidential but we have some information in regard to it. It refers to a 20% cut in ground-handling, a 40% cut in catering, a 15% cut in maintenance and a 25% cut in heavy maintenance by outsourcing it to eastern Europe. Did the Taoiseach and the Minister for Transport, Tourism and Sport receive a copy of that report prior to Government taking its decision?
Can the Taoiseach tell the House what will happen after seven years in terms of the regional airports, Shannon and Cork, and the Heathrow Airport slots? I believe that, strategically, the regions, ultimately and over time, will be weaker as a result of this sale-----
----in particular because of the lack of any guarantees regarding the slots after seven years. Can the Taoiseach indicate whether there was any contact with the European Commission in regard to the capacity of the Government, on its own in terms of this so-called 'B' share, to veto the sale of the slots, particularly because my understanding is that the Government, on its own, cannot, under EU competition law, do so?
In fact, over the next two days every Member of the House will have an opportunity to comment and have their say in respect of the Government decision taken last evening. The reason I did not answer questions in any great detail yesterday was because the Government was meeting on the issue and had not concluded its deliberations. I did point out to Deputy Martin that the Government hoped to make a decision and arrive at a conclusion yesterday evening, which it did. Immediately afterwards, the Government, through the Minister for Transport, issued a statement.
This matter has been already the subject of a great deal of discussion at the committee on transport and by way of parliamentary questions, Leaders' Question, Priority Questions and so on over the past number of months. I did not see the report referred to by the Deputy-----
-----and neither did the Minister. It is an internal Aer Lingus document. What has happened will lead to a strengthening of the position of Aer Lingus in so far as the country is concerned in terms of employment, connectivity and growth potential into the future.
When Aer Lingus was privatised in 2006 a very weak arrangement was put in place, with absolutely no guarantee of control or influence over either slot disposal-use or connectivity. The decision of the Cabinet yesterday is an enhancement of the original offer made to the Minister for Transport and restores a degree of influence that was not present last week, namely, the restoration of the authority given away during the privatisation of Aer Lingus in 2006. Deputy Martin will note that all three airports, Shannon, Cork and Dublin, have endorsed the opportunity to grow the airline, to increase employment and to retain Ireland's connectivity with the world in a very much stronger state than heretofore. Knock Airport, as a fourth airport, will have the opportunity to grow through IAG connections via Gatwick Airport.
I did not see the report and neither did the Minister. I am confident that the European Commission will approve and endorse the proposal to dispose of the 25.1% shareholding to IAG.
That was not the question I asked the Taoiseach in regard to the European Commission. The Taoiseach should not tell untruths to the House. I am familiar with the deal made in 2005-06. There are Government memos in existence which the Taoiseach's office showed to me in preparation for freedom of information. I know having read those memos that the most detailed consideration was given to the slots. It is not good enough for the Taoiseach to come in here and tell us that there were no such guarantees given at that time because there were. I do not know why the memos were not subsequently released. I have read those memos. I am also aware of informal contacts at that time with the EU Commission in terms of the Government's capacity, single-handedly as a Government, to veto the sale of slots on competition grounds. The question I put to the Taoiseach was if there had been any contact with the Commission in terms of the Government's capacity, single-handedly as a Government, to veto the shares.
The Taoiseach said he is not aware of the Nyras report. This report could potentially have a devastating affect on quality employment in Dublin, Cork and Shannon Airports. I find it extraordinary that the Government has proceeded with this sale unaware, it appears, of this report. Perhaps the Minister for Transport, Tourism and Sport is aware of the contents of the report. It is quite serious in that it refers to substantial cuts in jobs in areas such as ground-handling, catering and maintenance, the relocation of heavy maintenance work to eastern Europe, outsourcing and so on. We note the letter from IAG, which the Minister also noted in his speech. There are no guarantees in terms of jobs.
Behind the scene, this is what Aer Lingus and IAG are cooking up and the Taoiseach or Government has not been told about it. There was no mention of it in the Minister's speech. I raised this matter this morning at 9.30 a.m., hoping that I would get some response from the Government in regard to the Nyras report. We need to be clear, transparent and up-front with the public in terms of the real implications, long term, in regard to this matter.
Aer Lingus has grown over the last number of years since the decision in 2006 and so on. The articles of association can change as there are no guarantees in regard to them.
The Deputy said he would be familiar with the situation and obviously he is, because he has made the point about the guarantees that were included when Aer Lingus was privatised in 2006. When Aer Lingus shifted connections from Shannon to Belfast, it did so without coming under any control from the State. The Deputy is familiar with that and that is the weakness of the privatisation the previous Government agreed to.
The proposals now give the Minister for Finance of the day control and a veto over both the sale and the use of the slots-----
As Deputy Dooley said, Aer Lingus was in trouble then and that was sufficient to allow for a much weaker deal. This deal is about growing the airline and connectivity, but increasing jobs. It is about the impact from the United States and four new routes and so on.
I have not had sight of, seen the content or been presented with any documentation on the internal Aer Lingus report the Deputy refers to, and neither has the Minister for Transport, Tourism and Sport.
The Taoiseach has just acknowledged that he refused to answer questions here in the Dáil during Leaders' Questions and subsequently on this sell-off of Aer Lingus. However, what he did not admit was that at the same time he was briefing the media and Government Deputies about the machinations between the Government and IAG. The Taoiseach has also withheld documentation from the Dáil on this crucial strategic issue and said he has not read the Nyras report. Once again, the Taoiseach has dealt with the Dáil in an arrogant and unacceptable way. He did the same thing, infamously, with the Irish Water issue and with IBRC.
As we all know, Aer Lingus was a State company, built up over decades by Irish workers, taxpayers and citizens. It is a key, strategic asset for this island nation, not just for the State but for the entire island, and is both profitable and successful. However, this symbol of pride and national identity has been shamefully sabotaged by the current and the previous Government. Despite the Taoiseach's protestations, what the Government is doing is finishing off Fianna Fáil's work.
The fundamental issue here is that control over a key national strategic asset is to be handed over, lock, stock and barrel, to a multinational and this company will always put the profits and interests of its shareholders and board members before the interests of the Irish economy, this State or our citizens. Therefore, any assurances given by IAG about Aer Lingus should be given the same value as the 2011 election promises of Fine Gael and the Labour Party. Once Aer Lingus is gone, it is gone. The Taoiseach says the Government has been given guarantees that there will be no outsourcing of jobs or compulsory redundancies at Aer Lingus.
However, according to the Minister, Deputy Donohoe, Mr. Kavanagh has also indicated that he "does not foresee a likelihood of either compulsory redundancies or non-direct employment under IAG ownership". Are the phrases "does not foresee" or "a likelihood" a legally binding guarantee? If this is a guarantee, then clearly neither the Taoiseach nor the Minister for Transport, Tourism and Sport should be sent to the shop to buy a bottle of milk.
I did not refuse to answer questions yesterday. I could not answer questions because the Government had not concluded its deliberations on what is a very important issue for the country. Also, no Minister briefed anybody or spoke to any media until after the Government made its decision, as would be right and proper. The Deputy may have intentions of leaking information before decisions are made, but as far as I am concerned government is about making decisions and then giving the reasons those decisions have been made. As I said in response to questions here yesterday, this is in the interest of the people and the country.
Aer Lingus is not owned by the Irish people and has not been for quite a number of years. They own 25.1% of it. Under this new proposal, Aer Lingus will be registered in Dublin and its brand image will continue as Aer Lingus. The personnel will work for Aer Lingus and that position will not change. Clearly, in future years, the Minister for Finance of the day will now have an influence that the Minister for Finance did not have last week and did not have up until this decision was made yesterday, in that he has a veto and control over both the disposal and use of slots for seven years.
As I asked yesterday, what happened when Aer Lingus decided to move from Shannon to Dublin? Was this House in a position to do anything about that? Was the deal done by Fianna Fáil able to prevent that from happening? No, it was not. That change was made without any reference or influence from the Minister for Finance representing the Government and the people.
I understand the chief executive of IAG will hold a press conference later today. The Aer Lingus CEO, Mr. Kavanagh, responded clearly to the Minister for Transport, Tourism and Sport yesterday in respect of the introduction of legislation in respect of REAs, which the Government has agreed to and published, and the inclusion of employees of Aer Lingus in those REAs and of those who are currently outside of them. He has said that there will be more REAs. He has also pointed out that Aer Lingus does not envisage compulsory redundancies in any circumstance and that they will engage properly with all of the people involved.
This is about an opportunity to grow the business of connectivity. It is also about economic growth in our country. Deputy Ellis made the point earlier in an eloquent speech that we need further connectivity into Ireland to bring in more multinationals so that more people can work here. That is right and proper and I support that. The deal is on the table and has the public and official support of workers and boards in Shannon, Cork and Dublin, dealing with the issues of employment, connectivity, extra growth, more jobs and potential. This is all in the interest of Ireland and its people.
Yesterday I asked the Taoiseach if he would publish all of the documentation on this issue, but he has not done that. I checked for it in the Oireachtas Library earlier, but all we got was a statement and one or two records of committee meetings. We did not get the actual documentation that is the spine of this sell-off.
It is also clear that the Taoiseach's backbenchers and Labour Party colleagues have collapsed on this issue. It must be great to lead a government whose compliance would bring great embarrassment to any self-respecting sheep.
Fine Gael and Labour Party Members on the Joint Committee on Transport and Communications agreed with the request for this issue to be returned to the committee, but they then capitulated on this issue when the Government ignored the committee.
Leaving that aside, what about the Aer Lingus workers who have been given no certainty in regard to compulsory redundancies or outsourcing? I asked the Taoiseach about this yesterday, but he has yet to answer the question. What about the widespread concerns about the further erosion of terms and conditions in the inevitable restructuring of the company? When the IAG took over Iberia Airlines, it cut 4,500 jobs. The trade unions at Aer Lingus envisage the loss of 2,500 jobs with this takeover. What about the 15,000 deferred pensioners who Government Deputies said would be factored into any Aer Lingus deal?
They have not been factored into any Aer Lingus deal.
Will the Taoiseach confirm, in contrast with the Aer Lingus workers and the deferred pensioners, that current and former bosses at the airline will benefit by millions of euro from any sell-off? Could he give us a figure for the amount they will be paid in bonuses and in backhanders or will we have to leave it, as we did with Irish Water-----
It is not all right, Deputy Adams. Hundreds of thousands of people are shareholders in companies throughout the country and Deputy Adams does them a disservice by his comments.
The Deputy talks about documentation being laid before the House.
The Minister for Transport, Tourism and Sport has just given a 30 minute speech in respect of both the background to this, the motion to be laid before the House and the fact that this was a matter of discussion here on quite a number of occasions in recent months. Deputy O'Mahony has done a superb job as chairman of the transport committee. He has had hearings already in respect of IAG and so on but, no more than any other Dáil committee, this is the premier forum here-----
At least Deputy Adams had the courtesy not to say they were trying to treat the House with contempt. I will tell them this much. If we had left the business the way that it was intended to be for today, the first person out of the traps in false indignation would have been Deputy Micheál Martin wanting Standing Orders suspended to discuss this very important issue. That is why there will now be two days debate on it, with a vote to take place tomorrow.
Deputy Adams will also note that Cork, Shannon and Dublin have welcomed this proposal because they see the real potential of growing the airline, growing connectivity, growing jobs, the impact of a further four destinations from the United States over the next number of years, and the much strengthened position the Minister for Finance, on behalf of the Government - whatever Government is elected by the people - has for the time ahead both in respect of the use of the slots and, for a longer period, the disposal of slots. That is an influence the Government did not have previously, which was the outcome of a very weak deal done before when Aer Lingus was privatised in the first place.
The Minister, Deputy Donohoe, made the point this morning that this is a landmark decision. It certainly is that. It marks a new low in the behaviour of this Government in terms of its arrogance, undemocratic manoeuvring and contempt for this House that it would ram through in a matter of days strategic decisions about the future of an almost 80 year old company that has employed tens of thousands of people and has been key to the strategic development of this country.
I am very conscious that thousands of my colleagues in Aer Lingus in Dublin, Cork and Shannon, and their families, are looking at this debate. I am conscious of the 15,000 members of the pension scheme who can now draw no conclusion other than that the manoeuvres around that scheme were part of a deal to get this out of the way so the Government could get what it wanted all along.
I want to look at where the impetus for this takeover came from because this is a profitable company, even throughout the years of the economic crisis. It is a company with a confirmed delivery for nine new long haul aircraft. It is a company with cash reserves of almost €1 billion. Let us be clear. The driver of the IAG bid is not what is in the best interests of the Irish nation, the workers or the passengers. The driver of the IAG bid is the commercial interests of the British, European and Middle Eastern shareholders who own IAG, and that will be the driver of their involvement if they get hold of it.
The Taoiseach is proposing to give them ownership of that for €1.3 billion. This is a company with cash reserves of €1 billion and Heathrow slots worth more than €0.5 billion, not to mention the property, the brand and the product. It is an outrage that we would be sitting here discussing this sale. The Taoiseach talked about positives. Many of those positives were already in place. For the Taoiseach to say that the undoubted negative consequences will not happen is pathetic.
My questions to the Taoiseach are as follows. How, in God's name, can he come in here and say that the so-called concessions he got can stand up to any scrutiny - his "B" share? He proposes that Aer Lingus would be a captive subsidiary in IAG. What is to stop it using it for itself or leasing it back to IAG? It is rubbish.
The Taoiseach said there are guarantees for workers. The chief executive officer of Aer Lingus, who stands to benefit handsomely from this sale, says he does not foresee any redundancies in the future. I am sorry but I do not take any comfort from that statement and I do not believe a group of workers, who previously were given what they were told were legally binding letters of comfort which did not stand up, will take any comfort from it either. Can the Taoiseach explain to us how these guarantees are somehow different? Crucially, what is the big hurry? The Government was waiting on this for months. Is it that the Taoiseach is afraid his Labour backbenchers will not able to withstand the pressure from the workers and the pensioners who are enraged by this sale?
The position is that when the offer came initially it was not acceptable to Government. There was a good deal of discussion with the companies and the Department, and a move to strengthen what was the original offer. The Government has considered this very carefully. It is about the potential to grow the airline, grow connectivity and grow jobs. That is why the plan that is now set out sees an increase of nearly 2.5 million passengers and 635 new jobs in Aer Lingus. That will create further employment in a wider economy in terms of pilots, engineers and airline staff, and in the tourism industry as part of the strategy now unfolding nationally to grow tourism by serious amounts in the next ten years. There will be four new routes to North America by 2020. The impact of that will be very significant. The Cork-Paris and Cork-Amsterdam routes will be maintained and promoted. IAG will pursue those growth opportunities for Aer Lingus services from Cork. The Shannon-New York and Shannon-Boston routes will be maintained, and IAG plans to grow transatlantic services from Shannon. One only has to talk to any of the passengers who fly to the United States from either Dublin or Shannon. We have seen the numbers who have come from other locations around Europe because of the importance and the convenience of pre-clearance. This holds significant potential for the future.
In connecting from Gatwick with Aer Lingus, Knock Airport will have the opportunity now to connect into the IAG hub, with 60 other routes. As part of its drive, in terms of the Wild Atlantic Way, that is a real opportunity from a tourism and business perspective. It is also expected that Aer Lingus's cargo capacity will have increased by 50% by 2020.
There have been three hostile bids in the past in respect of Aer Lingus. There is nothing to suggest that there would not be others in the future. The difference is that the Government, on behalf of the people, now has an influence over the connectivity, the sale and the disposal of slots from Heathrow to Ireland in that these will continue with certainty in the time ahead, which was not the case before yesterday. That is a fundamentally important element of the growth.
The transfer of the share to the Minister in the articles of association and the legally binding guarantee and veto by him on behalf of the people in respect of the slot disposal or slot change is a very important and stronger improvement on what was in place previously.
The pension scheme the Deputy mentioned has been very complex for many years and is not part of this proposal. I have had contact with people who have been involved in the pension scheme and with the very many Members who were also involved. The Minister for Transport, Tourism and Sport has spent a very considerable amount of time during the past 18 months trying to deal with the very complex situation. The Government is very happy to support this proposal and notes the support from Dublin, Cork and Shannon airports. The potential to grow the airline, connectivity and jobs and to strengthen our economy is a very important consideration. The protection of future jobs and growth is part of this opportunity.
Yesterday, the Taoiseach told Deputy Adams he could not answer the questions. I assume the reason he has not done it this time is that he could not be bothered to give us the respect of answering. The Taoiseach has not addressed a single issue we raised. Many of the positives he outlined about the airline are already in train and are irrelevant to whether or not IAG takes over. The question of who will benefit from the business development, profitability and growth is not irrelevant. We already have an airline that is growing and that takes 1 million passengers from UK regional airports and transits them to the US through Dublin. That would be a nice business for a Middle Eastern, European or British shareholder who has no particular interest in Ireland.
The Taoiseach referred to future jobs. In an airline which had already pre-ordered nine new aircraft, new pilots and cabin crew were inevitable. The Taoiseach has been silent on the reality that outsourcing and redundancies of ground staff is practically inevitable in this scenario. Where are the guarantees for the workers? The Taoiseach has not given any, nor do I expect him to, given that he is a neo-liberal leader of a neo-liberal party. That what he stands for. That is his record and fair play to him. However, there was a time when the people in the Labour Party said they stood for something different. The cheek of these people saying they would give commitments to airport pensioners, that if this deal went through the pensioners' livelihoods would be protected, that they would put the proceeds in a fund to secure their future.
The legislation in respect of the registered employment agreements, REAs, has been brought forward and the commitment is that all the workers in Aer Lingus will be included in those REAs and that they will be extended to those not currently covered. Aer Lingus has not had compulsory redundancies in the past and the letter was very clear about that to the Minister for Transport, Tourism and Sport. I hope our country will benefit from increased connectivity and jobs with more pilots.
The Deputy was wrong when she said the benefits I mentioned were already there. There was no guarantee of four new routes from the US and there was not the same impact in terms of the growth pattern for passengers coming through Ireland yesterday. We did not have the influence and certainty that will now exist, because the Minister for Finance will hold a veto, on behalf of the people, in respect of the disposal of Aer Lingus's Heathrow slots. That certainty was not in place previously. I pointed out to Deputies Adams and Martin what happened when Aer Lingus decided to move from Shannon to Belfast The Government of the day was powerless to act due to the weakness of the deal that the previous Administration had done in privatising Aer Lingus in the first place.
This is about growing the economy and connectivity, creating jobs and new opportunities, growing our hospitality and tourism sectors, allowing greater access for multinationals to come to the country and greater facilities for export and business to be done from this country. That is why Shannon, Cork and Dublin airports have said it is a very good proposal which is in the interests of the country and the people and which they support.