Shane Ross (Independent)

I flag my support for Senator O'Toole's amendment and I ask the Minister to consult his officials before this amendment comes up for debate next week. Senator Dooley signalled some sympathy at least with the amendment, which is significant for his side, while Senator Browne also supported it. It would be appropriate if the Minister accepted that this amendment arises out of all-party support in the House. It is only equitable to include those workers who have been left out of the ESOP. This appears to have happened more by accident than design and it would be very unfair if they were discriminated against, both in this issue itself and in them being treated differently from ESB workers. They would have a real grievance.

Like most Senators I support this Bill in principle. I have to support it because I think I supported it in 2000 and I better do so again. It tells me much about Aer Lingus in the past and there are lessons in that, but obviously the main thrust of the Bill is the privatisation of Aer Lingus. There is a reluctance to spell that out in such brutal terms in the Minister's speech, but I welcome the fact that Aer Lingus should be privatised. There are lessons for us in the need to do it.

The consequence of 11 September 2001 was the exposure of the vulnerability of an airline like Aer Lingus and the fact that a semi-State body, fully run and owned by the Government, was not working in a commercial environment. We only saw the refusal by the Government to inject funds in Aer Lingus at a time of crisis thanks to EU rules. I do not doubt that if those EU rules did not exist the Government would have injected more money into Aer Lingus and we would have had the same inefficiencies and difficulties. We would have had the same airline and the same problems we had in its previous existence.

In some ways we have to be grateful that the Government was not free to operate in a way which was politically expedient. The Government should be grateful for that also, but it had to do something about Aer Lingus very quickly or close it down. I agree with the previous speakers that what was done was commendable. If there is a case for ESOPs, then this is a much stronger case than those which were made in the past.

There is no doubt that there were 2,000 redundancies and all sorts of changes. The antediluvian practices carried on in Aer Lingus in the past had to stop and the only way those could be changed was by facing bankruptcy — by facing doomsday. They would not be changed voluntarily, nor were they, but there was an agreement. A gun was put to people's heads and agreement was reached: if people went along with the survival plan, they would be given shares.

I have reservations about this sort of share arrangement but in order for the airline to survive it might have been necessary in this case. An identical number of shares is being issued — 14.9% is the amount in every case — but there is no comparison between this and other semi-State bodies which have come to similar agreements. Aer Lingus was in crisis, something had to be done both politically and commercially and this was the deal done, like it or not. In other situations, like ACC and ICC, there was no crisis, yet exactly the same deal was done, with 14.9% of shares. In those cases, and the Eircom case, there is very little evidence that there were many changes in work practices. It was just convenient for the Government of the time, to get themselves out of banking, to hand over 14.9% of shares to the workforce of those companies. However the same justification does not exist in those cases.

We should note the Minister said that the issue for consideration by Government is whether Aer Lingus can do better in private or in public ownership and whether there are any vital strategic matters which would influence that choice.

I have two reservations in this regard because this may be a case of privatisation with serious strings attached. When the Minister of State refers to "strategic choice", I assume he is referring to the national interest once again. I do not believe there is any longer a national interest in holding on to a national airline. We will not become marooned on some strange island because flights will still come in from other airlines, regardless of whether we fly.

I also have difficulties with the Minister of State's statement that he is

aware of concerns about strategic issues in the context of the State exiting from ownership of Aer Lingus. These concerns relate to the Aer Lingus brand, slots at Heathrow and the commitment of any new owners of Aer Lingus to regional development in Ireland.

If the Minister of State sends out those signals while trying to sell Aer Lingus, the Government will find it difficult to get a decent price for the company. If the Government is telling prospective buyers they must fly into Cork, Shannon and other airports, few will be interested. These issues of strategic interest will put off buyers.

The first thing which will put off an overseas airline interested in buying is the 14.9%. That is not a popular thing to say, but it will do so. The second thing will be if the Government states there is a strategic interest in regional development. Regional development is a broad ship, which means the airline will have to fly to places designated by the Government. It will find it difficult to get competing buyers or get value if it does that. It will find, rightly or wrongly, that it is selling Aer Lingus at a discount because other airlines will not have demanded such stringent conditions on the sale.