Tom Morrissey (Progressive Democrats)

I welcome the Minister to the House for this timely debate. It is timely because a decision must soon be made on where the Government stands on the issue.

A comment recently made by Mr. Willie Walsh at the Joint Committee on Transport finds common sentiment with what the Minister said today. The Minister said the global aviation sector is in serious difficulty. That was Mr. Walsh's opening comment to the joint committee on 6 October last. While Aer Lingus itself may be doing very well, the aviation sector is not. If we look at North America we see the proof of that statement.

The Progressive Democrats believe private equity should be brought into Aer Lingus and that the airline should be allowed seek that equity. This is not for any ideological reason but for strategic considerations. There was a time when the Government needed to become involved in setting up a national airline because others would not do so. There are now many investors who are willing to invest in airlines. They know how the business operates and they know, as Mr. Walsh and the Government have discovered, that it is brutally competitive. No shareholder involved in it can stand idly by or simply be a sleeping partner.

The Government has been a sleeping partner for too long on this issue. We have looked at Aer Lingus in the past two years and felt it has been going very well. While some people believe the task is over, the task is only beginning, which signifies the differences in many of our contributions. While some people believe Aer Lingus has been saved already, it is necessary to continually work at it to ensure its success. To ensure its success, as with Ryanair, it needs a source of equity. In other words it needs money in the bank in the event of a downturn. No Government should give Aer Lingus money for such a purpose. Unlike other airlines, Ryanair has such money, which is why every few months it can forecast a bloodbath in the market safe in the knowledge that it will last longer than any other airline in such circumstances.

Aer Lingus will have more flights through Cork Airport in 2004 than it had through Dublin Airport in 2001, which indicates the job it has done. As Willie Walsh has said, it also shows that Heathrow Airport is not as significant now as it was then because of the number of direct flights from Cork Airport to destinations other than Heathrow. This brings me around to the strategic value of the Heathrow slots. We believe the market will dictate the value of those slots. Those wanting to fly to Heathrow should recognise that a premium will apply and Aer Lingus should be able to charge for that. Passengers will pay one price for flying by Ryanair from Shannon to other regional airports and those wanting to fly to Heathrow should pay a different price, which is how the strategic value of the Heathrow slots will come into the equation.

On the last occasion Willie Walsh appeared before the Oireachtas Joint Committee on Transport I asked him how long he would stay at Aer Lingus. I am not surprised that he departed given that Aer Lingus was crying out for a Government decision. He said he felt he had brought Aer Lingus as far as he could. That meeting only took place one month ago and while people's perceptions and perspectives may have changed in that time, Willie Walsh was getting no political support for the business plan he wanted implemented. Only 12 months ago the Labour Party representative on that committee, Deputy Shortall, asked Willie Walsh when he would have a recruitment drive given that Aer Lingus had been saved. His reply was that he would not be recruiting and would offer another model seeking additional redundancies.

It is demonstrably clear that the old model under which Aer Lingus operated of a national airline to which some people wanted to cling is no longer feasible. Passengers now have a considerable choice of flights from this country and are more willing to fly mainly because of competition that has forced prices down, which is how it will continue. Reform of the aviation sector should not be couched in anti-worker terms. Many people automatically state the workforce must be protected and employment levels must be maintained. The first objective of any successful business is to create customers, from which employment can be created. It makes no sense to start the other way around which some people have effectively demanded. It cannot be a commercial success by starting with a pool of employment regardless of its market.

While Aer Lingus has made huge savings in the past three years, only 20% of these savings came about as result of staff redundancies in that time with 80% coming from other efficiencies in the system. At a Progressive Democrats conference approximately two years ago, Willie Walsh said that Aer Lingus had ripped off its customers for decades because it could afford to do so owing to having no competition. I have asked the unions a simple question, but have been unable to get an answer. Now that Aer Lingus is operating with 3,000 fewer employees, what were those people doing?

We cannot simply look at Aer Lingus from a north Dublin perspective and see it as an employment agency. It must be a service driven customer-focused supplier of aviation services. The management team must be allowed to let it be a commercially focused airline without one hand tied behind its back and Government looking to ensure it has a certain employment level. For too long some of our semi-State bodies have been over-manned and with the cold winds of competition those issues need to be addressed.

The position of the Progressive Democrats is not one of ideology, rather we are pragmatic in determining the strategy we should adopt to ensure that Aer Lingus survives and is strengthened. It can only be strengthened if it has access to private capital. It should not need to go cap in hand to the Government and wait for a decision. Michael O'Leary certainly does not need to——