asked the Minister for Communications if he intends to provide an equity investment for fleet replacement for Aer Lingus; and if he will make a statement on the matter.
18.
Ceisteanna—Questions. Oral Answers. - Aer Lingus Fleet Replacement.
6.
asked the Minister for Communications the Government's proposals to enable Aer Lingus to raise the capital necessary for their fleet replacement programme; and in view of the large amount of capital required if he will consider issuing shares to the private sector.
I propose to take Questions Nos. 6 and 18 together.
Proposals submitted by Aer Lingus to my Department concerning the company's fleet replacement programme and its financing are currently under examination by an interdepartmental review group. As soon as the review group complete their work a submission will be made to the Government in the matter. Decisions on the means of financing fleet replacement will not be taken until the review group's report has been considered by the Government.
I take it that the review group have not as yet reported to the Minister. Do the Minister and the Government consider that the figure of £1,000 million as the cost of replacement of the fleet, as was suggested in the media, is a greatly inflated figure and that the cost to Aer Lingus would be of the order of one fifth of that sum in the medium term?
The answer to the first part of the Deputy's supplementary is no, and the answer to the second part is yes.
Do the Government accept that the best arrangement for the financing of the replacement of the Aer Lingus fleet would be a combination of Government involvement and borrowing by the company to the exclusion of issuing shares to the private sector?
The last sentence in my reply answers the Deputy's supplementary. Decisions on the means of financing fleet replacement will not be taken until the review group's report has been considered by the Government.
Have Aer Lingus made any proposals to the Department with regard to the issuing of shares to the private sector to provide finance for the replacement of the fleet?
To my knowledge no. The interdepartmental review group are dealing with the matter as of now.
When does the Minister expect to have the results of that report?
May-June.
Does the Minister exclude the possibility of private participation in Aer Lingus as part of the funding of the fleet? Would he rule out the possibility of joint ventures by Aer Lingus to meet the same objective?
As far as any of those propositions is concerned, I have an open mind as of now.
Would the Minister accept that this is at variance with what his Leader said in the past about ruling out private participation in State enterprise?
That too will be taken into consideration by me when I get a report from the group. I do not accept the implication in the Deputy's remarks.
Deputy Kavanagh.
May I take it that——
I have called another Deputy.
I want to put it on the record that I do not accept the implications in the Deputy's remarks.
Will the Minister take into account the views of the trade unions involved in Aer Lingus when he is arriving at his final conclusions as a result of the report if there is any difference between the views of the trade union movement and the report?
It is traditional with Fianna Fáil Governments to take account of trade union views in all major matters in our national economic life.
Will they be nearer the Minister's views?
Is it the case that in addition to the approximate £200 million which Aer Lingus need for fleet replacement between now and 1995, they need a further £470 million for other capital works?
I do not want to go into detail but it is true that 737.300s have been sanctioned for later this year, that there is the possibility of another 737.300 for 1991 and that the question of the large Boeings will arise later in the nineties.
I was asking if, in addition to fleet replacement, there are other capital expenditures on such matters as Aer Lingus's ancillary activities and other aircraft related expenditure, which would involve a capital expenditure over the period substantially in excess of the amount involved in fleet replacement per se.
The Chair will be aware that I was asked about fleet replacement and I have confined my answer to that.
Would the Minister not accept that his earlier reply to Deputy McCartan may be misleading? Would he confirm that Aer Lingus's projections of capital investment needs over the next ten years amount to approximately £1,000 million for all capital investment?
Having studied the preliminary report of the activities of the inter-departmental review group all I can say is that Aer Lingus have made separate submissions and the whole matter will be taken into account.
I am calling the next question.
Is it not true that capital investment projects amounting to £1,000 million have been mentioned in Aer Lingus's proposals? It is right that the House should know this.
There has been more than one proposal.
Deputy McCartan, a final question please.
As the Minister referred to intermediate and interim reports of the review group, would he tell the House what areas of financing are currently being considered by the Department for the purpose of raising the capital necessary for fleet replacement?
There has not been an interim report. There is an ongoing process of consideration taking place within this group and as I told Deputy Cullen earlier, I am expecting a final report in May-June.
What areas are currently being considered——
I am sorry, Deputy, but we cannot remain indefinitely on this question. I am calling Question No. 7.