Seanad debates

Thursday, 2 December 2004

12:00 pm

Tom Morrissey (Progressive Democrats)

They could not be provided based on the level of customers now using that airport. Aer Lingus will again need to refocus itself following this week's announcement. Nine additional flights out of Shannon will put further stress on Aer Lingus operating from Dublin. Such are the decisions the management team needs to confront on a daily basis. Until the Government makes a decision, management will be continually frustrated.

The nature of the Government decision will define the types of candidates that will be attracted to replace the current management team. We will obviously have a different type of management team depending on whether it can, unhindered by requirements on employment levels, be a commercially focused airline or be required to work to the bidding of a Government, which can change from time to time and whose Ministers can also change. In a competitive sector where prices are coming down, costs must also come down. In such a situation, a Government by nature has a slower decision making process than a group of shareholders. That is the frustrating thing about Aer Lingus, it has gone so far but could go much further. I appeal to the Government and the Minister to ensure that the decision on attracting the right type of candidate to Aer Lingus is made before Christmas.

The Goldman Sachs report listed options for how the Government should approach this issue. The report was based on the current management team being in place, a demonstration of how quickly things change in the sector. It even suggested that the current management team might be given a share incentive. Aer Lingus is already 15% privately owned by the workforce but people do not see that as privatisation. If 10% or 20% was floated for institutional investors or the public, it would be seen as privatisation. The only way the 15% currently privatised can grow is if the balance of Aer Lingus also grows. It cannot grow under the current model and, therefore, a decision is vital.

The magazine Flight International last week contained an article on the departure of the Aer Lingus management trio. It stated that it has become clear that the trio's future strategy was incompatible with the views of Ireland's left-wing Government.

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