Tommy Broughan (Dublin North East, Labour)
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Question 102: To ask the Minister for Transport the contacts he has had with Aer Lingus management and unions over new cost cutting proposals that may result in job losses of up to 1,300 people at the airline; the directions he has given to the Government appointed directors on the board of Aer Lingus on this matter; the mandate that the Government appointed directors have been charged with; the regularity with which they report to him; and if he will make a statement on the matter. [32686/08]

Noel Dempsey (Meath West, Fianna Fail)
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The management of Aer Lingus met with officials of my Department on 16 September, 2008 to present the financial results for the first half of 2008. The meeting took place in the context of a round of meetings with major shareholders which the management undertakes twice yearly in relation to the annual and half-year results. At the meeting on 16 September the management set out the challenges facing the airline due to sustained high fuel prices and pointed out that proposals to achieve further cuts in the cost base were being developed and would be brought before the Board.

I am aware through the State's role as shareholder of the Dublin Airport Authority that Aer Lingus has been in negotiations about possible ways of reducing its cost base at Shannon airport. The Company has made no secret of the challenges that it is facing and the need to reduce its cost base. This has been widely reported in the media and there has been some speculation as to how the costs might be reduced. Aer Lingus is an independent company and has to take decisions on a commercial basis. Commercial decisions are a matter for the Board and management of the Company and it is not open to the Government to intervene as a shareholder in the company.

Under Company law all directors are obliged to pursue the best interest of the Company. Subject to that duty the State's nominees on the Board of Aer Lingus have been issued with a mandate to ensure that all future decisions of the company that have significant implications for wider Government, aviation or regional development policies are considered at Board level. The mandate specifically states that the possible decisions concerned would include decisions on proposals with significant local or national economic implications including a direct impact on employment. In accordance with the mandate the State's nominees are directed to seek to reconcile commercial and public policy objectives. I understand that the company will be meeting with trade unions representing staff this week with the assistance of the conciliation service of the Labour Relations Commission.