Seanad debates

Tuesday, 31 May 2005

Aviation Action Plan: Statements.

 

5:00 pm

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)

I thank Senators for their contributions to this debate. I was present for most of it and I apologise to those speakers whose contributions I missed. Unfortunately I had to be in the other House at the same time.

I am surprised at some of the analysis drawn by Senator Quinn, as someone who has run a successful company and knows the market well. Many private sector companies have major stakeholders but that does not appear to be an issue. Although I do not wish to draw an absolute analogy with what happened recently with Manchester United football club, it was most interesting that when it was being taken over everybody was deeply concerned about somebody holding on to a 25% stake to block the takeover of the company and prevent it from going private. This is part of the reason the State wants to have some strategic interest in the airline. The one thing we cannot do, which is what we have been doing with Aer Lingus, is expect it to compete with everybody else with one and perhaps two hands tied behind its back.

I have been at pains to say to everybody that the issue is not about giving Aer Lingus a sum of money next week or next month. If it were that simple we would all be fine. Aer Lingus must have ongoing access to the capital markets to make strategic decisions, as would any company. In particular, it must be in a position to do so when the aviation market experiences a downturn, which it inevitably will, given that it is the most cyclical of all sectors in the marketplace. It must be able to deal with that and have access to capital markets on an ongoing basis. It is not feasible for the State to remain a 100% shareholder.

I have no doubt that if one sold the company in its entirety one would do better but that is not to say that it is not legitimate to keep a stake in the company and see what the market price will realise. I am confident there will be a great deal of interest in Aer Lingus because if the private sector is to invest it will want to make a profit. It will want to invest in a company that is positioned for significant growth. Aer Lingus has the potential for an incredible amount of growth. Planning its growth on foot of the decision will allow it to go to the market, especially to purchase aircraft. The lead-in time is about 18 months to two years so it would need to be doing that immediately.

I am surprised at some of the remarks made about the Dublin Airport Authority. I again apologise for not being present for all contributions. There is a symmetry between the development of the Dublin Airport Authority and Aer Lingus. Aer Lingus is the biggest customer of the Dublin Airport Authority. It is in the interests of the Dublin Airport Authority to make sure that it develops the airport in a way that maximises the airline's ability to grow within the airport. If the Dublin Airport Authority took the wrong decision, that would not be in the interests of the airline. By doing it the wrong way the authority would not grow the airport and thus its own business because it would not increase passenger throughput.

Senator Quinn is correct in saying I am stating the obvious in regard to due diligence. The reason I have done so is that many commentators referred to gold-plating this and that which I considered wrong. It is important that I would spell out the caveats that exist and how we will ensure that would not happen. I agree with Senator Quinn in principle. It is obvious, but sometimes it is necessary to state the obvious.

I do not have a great deal of time to go through what everybody said. We have made good decisions that for the first time will put the aviation sector in a position where it can grow rather than merely cope with a crisis situation. That is a fair assessment.

It is not for the Government to decide the location of the second terminal. It is not for any political party to decide, although Fine Gael appears to state that if it were in Government it would decide. That is not the legal basis that exists. It is a matter for the Dublin Airport Authority.

We should all draw a line in the sand. It is very wrong to be making references to the board of the authority. It is a new board. Its members are well-known and respected by all in the business community. They are regarded as people who have proven themselves to be highly successful. What happened under Aer Rianta, be it wrong or right, is history and I will not comment on it. What is important is that there is an entirely new board in place with an entirely new mandate, a clear Government policy and a clear direction. I trust the board has the ability to deliver and I wish it well.

Of course Shannon Airport is extremely important strategically. We have had good discussions with the Americans. There are also issues to be addressed at EU level. I am hopeful there will be a very good outcome which will be good for the development of the aviation business in general in Ireland. No airline, be it Irish or international, has suggested to me that it does not believe there is a great future for Shannon Airport in terms of both European and transatlantic destinations.

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