Joe Carey (Clare, Fine Gael)
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Question 658: To ask the Minister for Transport his views on the function of the State's 25% shareholding in Aer Lingus; and if he will make a statement on the matter. [38762/09]

Noel Dempsey (Meath West, Fianna Fail)
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The State retained a 25% ownership in Aer Lingus to protect strategic interests. The primary interest the State wanted to protect was the key aims of our Aviation policy 1) to maximise connectivity for Ireland 2) to encourage competition and competitiveness The 25% stake has already ensured that competitiveness is maintained in the Irish aviation market by ensuring at least two major airlines continue to operate in the sector.

In addition to providing a basis to oppose takeovers, a stake of over 25% also allows a shareholder to block special resolutions. One notable example of where such a resolution is required is for the purpose of making changes in the Memorandum and Articles of Association of the Company. This provides a protection for two specific interests of the State. It means that the relevant provisions of the Memorandum and Articles of Associations that (a) ensure that the State will have the right to appoint three directors and (b) provide for a safeguard against any disposal of Heathrow slots, cannot be changed without the approval of the State.