Tom Morrissey (Progressive Democrats)

I welcome the Minister of State to the House to discuss the Aer Lingus Bill 2003. It has come as a great shock to Aer Lingus that it must operate in an ever-changing business environment. Gone are the days when the airline could operate with certainty. Changing times have demanded that airlines, and, more important, national airlines like Aer Lingus, are properly equipped with a business model which can cope with market forces. Thankfully, Aer Lingus is no longer allowed State investment under EU rules when in crisis. However, it needs investment, which will have to come from the marketplace rather than from national Governments as was the case heretofore.

Aer Lingus has dramatically turned around its fortunes over the past three years. Just three short years ago, it was facing bankruptcy and looking over its shoulder for a State handout. While being forced with the stark choice of going under or changing its structures to meet more demanding times, Aer Lingus and its staff have enjoyed a profitable existence in the past two years. I hope this will also be the case next year. However, it must be allowed to fund the resources necessary to cope with a demanding future. The 14.9% employee share option is to be welcomed and is a recognition of the commitment of the staff and management in recent years. In the coming years, Aer Lingus will have to cut costs further to continue in existence.

I recall a presentation to the Oireachtas transport committee 12 months ago by Aer Lingus management. They put forward a model of reducing costs as a way forward. Indeed, they made the presentation as if it were a new type of business model. I reminded them the model was in existence for many decades in the private sector. As I said at the outset, I believe it has come as a great shock to them that they must operate in this new business climate. I reminded them also that were it not for 11 September 2001 and the foot and mouth disease, they might not have come to this sudden realisation and the Government would be continually bailing them out. They agreed at the end of the debate that this was the case, that 11 September 2001 was a great realisation and a sudden shock when they saw other airlines going under.

The figure of 14.9% is being proposed because of a precedent in the ESB and Eircom. I sincerely hope Aer Lingus will be able to cope with the advent of the open skies policy, which will bring great benefits to the country. It should allow Aer Lingus the opportunity to explore new markets and new customers. An unfettered Aer Lingus, under its existing management, will be leaner and fitter to operate in the next decade. The only certainty that faces the company is an ever-changing marketplace for more travel and cheaper fares. Aer Lingus has woken up to a new reality. Let us hope it will continue in that vein and that the passing of the Bill will assist it.

My party and I sincerely hope the Government will allow Aer Lingus to manage its business unhindered by Government policy. The Government cannot have it both ways and allow Aer Lingus to enter the private sector, yet tie one of its hands behind its back by saying there are national strategic interests involved. I recall the Progressive Democrats national conference last year when the chief executive, Willie Walsh, made an admission that Aer Lingus had been ripping off its customers for years. It was a brave admission, which went unnoticed by many people. It must be asked how that was allowed to go on for so many years. It was allowed because of a lack of competition and because Aer Lingus was able to look over its shoulder for Government investment. It was allowed to have a huge workforce because it did not have to be competitive. The future demands that it enter the private sector but I hope Government policy will not hinder it that future.