Dáil Éireann debate -
Wednesday, 30 Mar 1994

Vol. 440 No. 8

Written Answers. - Aer Lingus Alliance.

Jimmy Deenihan

Question:

23 Mr. Deenihan asked the Minister for Transport, Energy and Communications the proposals, if any, there are for future arrangements involving Aer Lingus and Delta Airlines; and, if so, the progress, if any, there is to date on discussions between the two airlines.

Enda Kenny

Question:

35 Mr. E. Kenny asked the Minister for Transport, Energy and Communications if Aer Lingus will be seeking an alliance with any international airline; and his views on cross shareholding in the company in order to improve financial viability and secure the future of the airline.

Minister for Transport, Energy and Communications (Mr. Cowen)

I propose to take Questions Nos. 23 and 35 together.

The question of a strategic alliance for Aer Lingus was one of the issues dealt with in the document on Irish aviation policy which was published by my Department in February of this year.

As stated in that document, the current global trends in aviation are towards strategic alliances among existing carriers to achieve the economies of scale and cost reductions necessary to compete in increasingly competitive international markets. Some alliances are also designed to provide carriers with access to private capital for development purposes. There is also an increasing trend towards the licensing of new airlines and the privatisation or part-privatisation of national airlines.

With the progressive liberalisation of the airline industry worldwide, many airlines with relatively small domestic markets have sought alliances with stronger carriers or groups of carriers. In some cases, these involve cross shareholdings while, in others, alliances are confined to marketing arrangements. In so far as Aer Lingus is concerned, while the proposed form of such an alliance is a matter in the first instance for the board of the company, the Government, as shareholder, will seriously consider on their merits all proposals from Aer Lingus for such alliances. These could include cross shareholding agreements and additional equity investments, if these are judged to be in the best interests of the airline and the economic development of the country.

It would be inappropriate for me at this stage to comment on discussions Aer Lingus has with any specific air carrier. However, the Government will continue to encourage Aer Lingus to seek appropriate strategic alliances with other airlines as part of its overall development strategy. In order to interest potential strategic partners, Aer Lingus in the first instance has to achieve the objectives set out in its restructuring programme, Strategy for the Future, so as to demonstrate sustainable commercial viability.