I propose to take Questions Nos. 2, 3, 8, 11, 26, 93 and 96 together.
As Deputies are aware, on 6 July last the Government announced that it had decided to endorse the broad strategy set out in Aer Lingus's strategic plan for the future of the company, as submitted by the board, including the need to achieve £50 million annually in cost savings.
The Government, as shareholder, also agreed to invest £175 million of taxpayers' money in support of Aer Lingus's strategy: by way of one £75 million and two £50 million instalments. The payment of these equity injections is subject to the following conditions: a full and comprehensive agreement having been reached between management and unions in Aer Lingus on the necessary £50 million annual reduction in internal costs essential for the return of the company to commercial viability; production of satisfactory evidence that the necessary measures proposed are being implemented in full; and a formal indication by the European Commission that it will raise no objection to the proposed State equity injections.
In taking its decision on the strategy for the future, the Government noted that agreement had been reached at a meeting between the Cabinet sub-committee on aviation matters and the Irish Congress of Trade Unions on 22 June last, on the following issues: the underlying financial position of the company was very grave and unsustainable; the core airline business would have to be returned to operating viability; all sides are committed to achieving the reduction in numbers required in Aer Lingus through a voluntary scheme; the question of participation by Aer Lingus employees in the future success of the company should be explored as a tangible form of recognition for the additional contribution being asked of the workforce at present; and a special enterprise development unit would be set up right away, to consist of representatives of the unions and Aer Lingus together with the IDA, Fingal County Council, FÁS, and the Department of Enterprise and Employment, to identify new employment opportunities within the Aer Lingus structure.
I have consistently made it clear that the Government's bottom line is that the £50 million in annual savings must be achieved. The Government has not stipulated how they should be achieved. That has always been a matter for negotiation between the management and unions.
Negotiations have been taking place between Aer Lingus management and the unions on the implementation of the cost cutting measures in the strategy. These negotiations have understandably been vigorous and forceful on both sides. The negotiation and conciliation process has been greatly helped by the very professional facilitation of the Labour Relations Commission staff.
The proposed financial restructuring of Aer Lingus, while involving inevitable job losses, will offer the prospects of secure employment for the remaining core of the company. Without commercial viability, there would be no future for the airline or its employees.
I am glad to note that substantial progress has been made in negotiations and that final agreement now appears to be within reach. It would not be appropriate for me to discuss the numbers of voluntary redundancies or the details of the negotiations which, as I have said, are a matter for the management and unions. I will simply once again urge those involved to grasp this opportunity of protecting the future of Aer Lingus.
The plan for the transatlantic operations is an intrinsic part of the strategy for the future which addresses what Aer Lingus sees as the best marketing possibilities at present in the airline's commercial interest. Negotiations on the detailed arrangements are a matter for management and unions. I understand that substantial progress has been made in that regard.
Aer Lingus is Shannon's best customer and its wellbeing is vital not only for the airport but also for the region. The Government sees the survival of Aer Lingus, with its strong transatlantic presence, as being essential for the future of the Shannon region.
The employees of Aer Lingus have contributed enormously in the past to building up the airline. The Government is fully aware that a stronger commitment than ever before will be required from all of the staff of Aer Lingus, all the way through the organisation. As a tangible form of recognition, the Government has accepted that Aer Lingus employees should have a stake in the future success of the company once that has been secured.
The Government formally notified the European Commission of its proposed investment in Aer Lingus last August. Prior to that, I had met with EC Commissioners and found their attitudes both helpful and informative. Officials from my Department have also had a series of meetings with the Commission. We have explained to the Commission, at both ministerial and official level, the importance of having this matter finalised in order to enable the first tranche of equity to be invested before the end of this year. The Commission has indicated to us that it fully appreciates the urgency of the matter and has assured us that it is doing everything possible to expedite its examination.
Our discussions to date with the Commission have been constructive. The Government remains confident that its investment in the airline will take place within the planned timescale and that Aer Lingus's strategy for the future will be allowed to proceed as proposed.
The critical financial position of Aer Lingus, evident from the annual accounts for the year ended 31 March 1993 which were published recently, underlines the need for a fundamental restructuring of the entire operation. I do not consider it necessary to comment further on the accounts as published beyond endorsing the chairman's statement that the past year has been one of the most traumatic in the history of Aer Lingus.
It is a matter for the board of Aer Lingus to implement the strategy, and I am confident it will do so. Appointments to the board of Aer Lingus are made by me with the consent of the Minister for Finance under the Air Companies Acts.
In looking to the future, it is vital to recognise the realities of the international environment in which Aer Lingus must operate and particularly in the Single European Market which accounts for most of Aer Lingus services. Airlines must compete in an open market where Governments can no longer intervene to regulate access to routes or pricing. I am confident that Aer Lingus, once its costs are brought into line with its competitors, can not only survive but also develop in its main markets.