Emmet Stagg
Question:22 Mr. Stagg asked the Minister for Public Enterprise if she remains committed to the flotation of Aer Lingus; and if she will make a statement on the matter. [8992/01]
Priority Questions. - Aer Lingus Flotation.
I am committed to implementing the Government's decision of 14 December 1999 in relation to the Aer Lingus IPO, once the present industrial relations issues have been satisfactorily addressed. The precise timing will be influenced by the conclusion of discussions on the shareholding for Aer Lingus employees, the enactment of the enabling legislation and market conditions.
Since the Government's decision on the IPO, the Minister for Finance and I have engaged the necessary advisers to facilitate the implementation of the IPO and preparatory work for the IPO is proceeding. The Aer Lingus Bill, to provide for the legislative framework to enable the IPO to proceed has been published and has passed Seanad Éireann. The Bill will be considered by Dáil Éireann in due course.
As regards the shareholding for Aer Lingus employees in the context of the IPO, significant progress was made last summer on this issue in discussions with the Aer Lingus unions. However, these discussions were not concluded as a consequence of the industrial relations difficulties in the airline. Officials from my Department will contact the Aer Lingus unions in the near future with a view to resuming discussions on the shareholding for Aer Lingus employees.
In light of the Minister's experience as the main salesperson for Eircom shares and the resulting fiasco, does she agree that the only people who gain from privatisation are greedy carpet-baggers who, in the case of Eircom, walked away with millions? Does she further agree that the top management of the company benefited greatly, particularly the chief executive officer – whose title has since changed – who walked away with something of the order of £4 million? Does she agree that such people are the driving force behind the proposed privatisation and will she reconsider her position?
I outlined the decision taken by the Government on this issue. I agree with the Deputy in regard to one of the people involved in the Eircom flotation—
The Minister should be specific; I am very slow.
Has the Minister had second thoughts?
Deputy Ryan should not interrupt Priority Questions and the Minister should ignore any such interruptions.
It would be better for Aer Lingus to undergo the flotation process but the Government has taken a decision on this matter and when the prevailing industrial relations difficulties in the company are resolved, the IPO will proceed.
Does the Minister agree that as an island nation, air transport is vitally important to us and that it is in the strategic national interest that we would have control over it? Is she fearful that if privatisation proceeds, which I seriously doubt it will, such control would be held in foreign board rooms in New York, Germany or elsewhere? Does she agree that in the event of a downturn in those economies, major cutbacks would almost certainly be made in air services here?
I heard Deputy Stagg posing the latter question on the television news on Friday evening and I sought a note on the matter yesterday when I came to Dublin. Ownership of Aer Lingus shares will be restricted following the IPO. Aer Lingus will be obliged to comply with the foreign ownership and control limitations of EU licensing regulation 2407/92 and the terms of the bilateral air services agreement. Under EU regulations, airlines must be owned directly or through majority ownership by member states and-or nationals of member states in order to operate in the single market.
So Mr. Desmond, Mr. Smurfit and a few other tax exiles would qualify under that criteria and could end up owning the company.
What about Mr. Ryan?
Is the Minister aware that the Labour Party has taken a very firm decision on the matter of privatisation, particularly in regard to Aer Lingus, and that it will not involve itself in any future Government which would advance such a policy? Has any progress been made on the commitment provided recently by the Mini ster in this House that the issue of pensions payable to existing Aer Lingus pensioners would be resolved before privatisation would proceed?
The Labour Party would not participate in any Government or with any other party which would advance a policy of privatisation and I hope it will not find itself bereft—
Fine Gael is also a socialist party now.
The pensioners held two meetings in February and March. I met them some months ago, together with departmental officials, and the matter is ongoing.
We have exceeded the time for this question.
The Minister stated that market conditions must be favourable, legislation must be passed and existing industrial relations difficulties must be resolved before privatisation can proceed. Does she agree that it is not possible to do all of these things in the time available—
The Deputy must conclude.
I was interested to read a recent report in a well respected Sunday newspaper on the prospect of the privatisation of Aer Lingus.
We must proceed to Question No. 23.