asked the Minister for Communications his policy in relation to (a) Government guaranteed borrowings, (b) the provision of equity and (c) private funding as a means of funding fleet replacement by Aer Lingus.
Ceisteanna—Questions. Oral Answers. - Aer Lingus Fleet Replacement.
17.
Proposals which Aer Lingus have submitted to me concerning the first part of their fleet replacement programme and their financing are currently under examination. This examination will include detailed consideration of all the financing options available, including those mentioned by the Deputy, with a view to making a submission to the Government in the matter. The Government will, in due course, make policy decisions in these matters.
The Irish Press of 2 June carried a statement by the Minister that Aer Lingus would have to attract outside investment to finance a substantial part of fleet replacement. Is that still the Minister's view?
That article did not quote the Minister accurately. It is well known that Aer Lingus are facing into a decade of very substantial investment. In answer to a question if the State would be meeting these sums, I could not say yes because these matters have not yet come before the Government and before they come before the Government, they will need very careful consideration. I was not prepared to exclude any possibility because it is important that we make the best decision in the interests of Aer Lingus and that we do not close off any avenue which might help Aer Lingus grow in the future.
Is the Minister developing the economic philosophy of the British Tory Government, who have been selling off British Telecom and are trying, and finding it difficult, to sell British Airways? Are these sentiments coming from that economic philosophy?
Absolutely not. I know Deputy Wilson is capable of thinking in other than the straight lines his question suggests. The only motivation for considering any proposals in relation to Aer Lingus will be in the best interests of Aer Lingus. They will not be motivated for good or ill, positively or negatively, by ideological considerations of the sort mentioned by Deputy Wilson.
Is the Minister considering putting before the Government any plan for the leasing of ships for the new fleet?
There are a number of possibilities. The Deputy can take it that all possible avenues will be explored by the board of Aer Lingus and by my Department before decisions are made to the Government, who in turn, I am confident will give every consideration to those different possibilities.
Would the Minister distinguish between two forms of leasing: first, where Aer Lingus would eventually end up owning the aeroplanes and, second, where the aeroplanes would revert to the lessors?
The different options are called lease purchasing and against leasing and there are costs involved in those options. Other options are direct purchase of new aircraft, direct purchase of fairly new secondhand aircraft, lease purchasing of secondhand aircraft, lease purchasing of new aircraft, or the leasing of those aircraft. Another factor is the timing of the decisions which may be affected by circumstances outside our control, for instance, the noise regulations which may or may not be adopted by other administrations; that could influence the timing of decisions in relation to Aer Lingus and might bring forward the timescale for the replacement of the aviation fleet.
I would like to ask a question about the noise levels in a moment but, arising out of the Minister's reply to my question on leasing, does he see any implications for employment in Airmotive in the leasing of aircraft as distinct from the purchase of aircraft?
I really do not know, because it would be hard for me to link the two at this stage. Obviously all factors, such as the spin-off benefits to Aer Lingus or to any of their subsidiary companies, would be considered as part of the package but as of now, it would be mere speculation on my part to see benefits for any other company——
Is the Minister aware that there are fears among the people employed by Airmotive that if the exercise of straight leasing is indulged in there may be danger to those workers?
Very often people have fears which are unfounded, and sometimes people do not fear the obvious. At the moment the Aer Lingus group are doing well. I do not see any fear for them or for any of their subsidiary companies at this stage provided they continue to improve on their profit margin. That is very necessary if they are to be in a position to fund the fleet's replacement programme.
Has the Minister put proposals on the provision of equity for Aer Lingus to Government yet?
No proposals have yet gone to Government, although the Deputy can take it that the Government will look at this question very soon, but that is not to say that substantive or long term decisions can be expected in the immediate future. I expect there would be a first consideration of the issue by the Government in the near future.
What kind of figure has the Minister in mind with regard to equity provision?
I will have no figure in mind for equity provision until all aspects of the fleet replacement issue are considered — the scale of it, the timing, the alternative sources of finance and so on.
A final supplementary——
I have allowed enough supplementary questions. I am calling the Order of Business.