Dáil Éireann debate -
Tuesday, 2 Dec 2003

Vol. 576 No. 1

Aer Lingus Bill 2003: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Boyle

When I made my previous contribution I pointed out that given the way Aer Lingus is restructuring and presenting itself as a company, it is losing the right to be considered a national airline due to its decision to remove itself from the Cork-Dublin route, to practices that call into question its corporate acceptability and its decision to take on airlines that have opened up routes before it did so. I cite the example from Cork Airport where Jet Magic has had a direct challenge from Aer Lingus having opened a number of routes from Cork Airport with Aer Lingus preceding it. The ultimate question about the nature of Aer Lingus as a company and the type of structure which the Bill will buy into in terms of future employee participation, is the extent to which those who have suffered most in the company will have the least gain. The ongoing industrial disquiet within the company is a signal that the Minister and the new lean mean hungry management in Aer Lingus have been getting it wrong. All of these grounds – decisions to absent itself from Irish airports, decisions to take on Irish companies in terms of the routes it is supplying and the unhappiness with the Aer Lingus company as to what workers gained for the decisions they have made as a workforce – call into question the reason the Minister is introducing the Bill in this way at this time.

The future for the airline is in doubt as to the type of airline it will become. We must consider the other decisions being made regarding the US-EU agreement that Aer Lingus will not be an international airline but will only be a cog in the wheel as part of its global alliance arrangement whereby it will go to regional centres. There is a real danger in the near future that this country will not have an Irish airline on which it can depend to get to major international centres without the need to use other airlines which are part of the arrangement in which Aer Lingus finds itself or without the need to change frequently to other airlines and from other airports. The Minister will have to say there is a policy in place as regards the future arrangements for airline management here.

Another issue that has to be tackled is the internal use of airlines and the fact that there are now new, and seemingly more favoured, companies that have not lived up to their promises. In regard to the internal airlines, there is reluctance on the part of the Department to apply stringent standards that may have been applied to Aer Lingus in the past and may have brought about the difficulty in which Aer Lingus found itself and out of which it needs to bring itself. I hope the Minister will address many of these questions.

Mr. Haughey

I wish to share time with Deputy Devins.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Haughey

This Bill gives effect to the employee share ownership plan agreed between the Government and the unions and provides the legal framework to facilitate an investment process in the company. The Bill provides for Aer Lingus to establish superannuation schemes for general employees and pensioners. It also provides for amendments to the process by which directors, including worker directors, are appointed. The ESOP provisions will be brought into effect as soon as the legislation is enacted which will increase the staff shareholding to 14.9%, as agreed in the October 2001 survival plan.

I last spoke in detail here about Aer Lingus in October 2001 when the company was experiencing a serious financial crisis that threatened its existence. I said that Aer Lingus was a vital semi-State organisation, namely, the State airline in which the Government was and is the major shareholder. I said it was of strategic importance to an island nation, especially for trade and tourism, and provided a crucial transatlantic service. It was also a major employer with, at that time, approximately 6,500 employees and was therefore a focal point for the economy of north Dublin. These observations remain valid in December 2003 and set in context any debate on the future of Aer Lingus.

The company had many difficulties in October 2001. The attack on the World Trade Centre on 11 September 2001 was followed by a dramatic slump in air travel and future bookings. There were industrial disputes, an outbreak of foot and mouth disease, the downturn in the US economy, and a problem with increasing fuel costs, all of which caused problems for Sabena, Swissair, KLM and Aer Lingus among others.

The survival plan which was adopted involved a 25% reduction in capacity, a staff reduction of 2,000 employees, a pay freeze, extensive work practice and other changes, and the sale of non-essential assets. The staff contribution to this must be recognised. At that time the Government promised to facilitate private sector interests and staff in an investment in Aer Lingus to provide a source of funding to support the plan. Aer Lingus has made a remarkable recovery. In 2001 it had a loss of €52.1 million. In 2002 it had an operating profit of €63.8 million and is on track to exceed its full year capacity profit forecast of €75 million for 2003 notwithstanding the Iraq war and the SARS outbreak.

Sections 3 and 5 provide for the sale of Aer Lingus and the privatisation of the company. In effect this allows for the sale of some or all of the State's shareholding and for the issuing of new shares. In his speech on the Bill on 9 October 2003, the Minister said: "It is now over six years since the Government first decided to explore the ownership issue which led to the decision in 1999 to embark on an IPO of the airline". He went on to say that he asked the chairman in July of that year to examine and report back to him on future options for the company. The chairman recently gave the Minister that report. The company's view is that a private sector investment process should be initiated without delay. The Minister added that he is carefully considering the report and will bring his own view and that of Aer Lingus to Cabinet in the coming weeks. Members of the House need more information about this. We need a major debate on the future of the national airline soon.

The Minister also said in his speech that: "The board, management and staff have transformed the airline into a lower cost, flexible, efficient business model offering low fares with a quality service". This is true and the chief executive of the board, Mr. Willie Walsh, and the staff are to be congratulated on this achievement. Aer Lingus should not try to become a carbon copy of Ryanair. Its arrival did much to increase competition and decrease fares, but Aer Lingus is a different type of airline with a different role and history which must form the backdrop to any debate on its future.

Why is privatisation being considered now? Things have changed since October 2001 in that the company is now profitable. Who is the likely buyer? Is only a partial sale being examined? What is the economic case for the sale at this time? What proposals is the Minister bringing to Cabinet in this regard? He needs to make the case and spell out his plans for us to debate them. What will be done with proceeds arising from the sale? I hope a broader debate on aviation in Ireland and the role of the national airline can take place as soon as possible.

The Minister is confronted with several major issues, including problems with Luas at the Red Cow roundabout, the height of the Dublin Port tunnel, the new terminal at Dublin Airport, the extension of the penalty points system, the break-up of Aer Rianta and CIE, and the privatisation of 25% of bus routes. All are of great interest but my chief concern is for the break-up of Aer Rianta and CIE. Action is needed on these issues. However, the ideology of competition and deregulation is not an instant solution to these transport matters. I hope for all our sakes that the Minister has got it right. He is a brave man but I would like him to assure us that each case is being examined on its merits and that all pragmatic solutions are being comprehensively examined in respect of these issues. We also need a progress report on the proposed break-up of Aer Rianta and the Minister's discussions with the trade unions if that is possible.

The Retired Aviation Staff Association has been lobbying for some time about its pension concerns, which we should take seriously. According to the Bill the company will establish pension schemes but the association is not happy with the wording of this section. It suggests that a pension scheme should be set up in consultation with members and social partners and that the wording of the Bill should be changed accordingly. It is also anxious to ensure that the schemes continue to be of defined benefit and would like employees to continue to have trustees to the scheme. There are suggestions that the establishment of separate schemes for catering staff, cabin crew and general employees is in the pipeline. If all this comes to pass, existing pensioners will remain in the old scheme which will be closed, with no growth or future protection. The retired staff want an active scheme and I hope discussions can take place with them to ensure that happens.

The pilots have highlighted an issue in the context of an EU regulation on the harmonisation of technical requirements and administrative procedures in the field of civil aviation which was partially adopted on 3 September 2002. It contains an amendment to include a section covering flight and duty time limitations and the rest requirement for airline crew which has been sent to Council for consideration by the member states. The Irish Airline Pilots Association has serious concerns about this because it deals with the question of airline and passenger safety. I will not go into the detail of it as I am sure the Minister and Minister of State are familiar with these concerns which I hope can be addressed satisfactorily in consultation with the Irish Aviation Authority.

Dr. Devins

I am delighted to have the opportunity to speak on this important Bill, the Aer Lingus Bill 2003. Air travel has seen many advances since that day many years when the Wright brothers took to the skies. Many of these advances have focused on the technological aspects of flying, especially the fantastic developments that have occurred in the design and manufacture of aeroplanes. In the past decade, however, a revolution has taken place in air travel that may have a more lasting effect than the changes and improvements in aeroplane technology.

I refer, of course, to the concept of low cost air travel. One of the pioneers of this concept in Europe is Ryanair, an Irish company of which we can all be justifiably proud. The undoubted success of Ryanair led to a shake up in the air travel business with significant implications for Aer Lingus, a company with a long and proud tradition. It went from a position where there was virtually no competition on most of its routes due to bilateral agreements, to an open market that was competition driven. If we consider the situation less than 20 years ago, when a short flight to London from Dublin cost hundreds of pounds to the situation today, where flights can be booked for between €10 and €20, we can see how far things have moved in the aviation field.

During that time there have been many crises and much turbulence but Aer Lingus has not only survived but thrived. For a State company to respond so well to competition has been a remarkable occurrence and management and employees are to be congratulated for this achievement.

In addition to the increased competition and opening up of the air travel market, the downturn in international air travel resulting from the atrocity of 11 September 2001 impacted on the survival of many airlines. This was particularly severe in the case of Aer Lingus, which had a large segment of its business based on the transatlantic routes. Since that fateful day, however, Aer Lingus has doubled its network, opening up 28 new routes. This expansion supports the airline's growing European operation to and from Ireland. New routes to Berlin, Venice, Valencia, Lyon, Dubrovnik, Copenhagen and Warsaw will be operational by June 2004. These new routes will result in greater efficiencies in the utilisation of planes and staff resources. This will in turn translate into greater choice for the travelling public and lower fares. We know that Aer Lingus is now committed to the provision of low fares across the range of customers. Not only does this offer more choice to Irish travellers, it facilitates new opportunities for growth in tourism into Ireland.

If one compares the situation today to that of 15 years ago, the turnaround has been remarkable. It was the norm then to have very few destinations, serviced by aeroplanes that were a quarter or a half full. The fares charged were often exorbitant. The accounts of the last three years illustrate this point. In the first half of 2001, there was an operating loss of €38 million. In the first half of 2002, that loss was reduced to €12 million and in the first half of 2003, there was an operating profit of €14 million. At the same time, the dramatic reduction in its cost base contributed to its turnaround. The cost base in the first half of 2001 was €570 million and was reduced by the first half of this year to €400 million. Likewise, there has been a huge increase in passenger numbers. In the first half of 2001 there was a 69% passenger load factor but in the first half of 2003 that had increased to 80%.

There will be more challenges ahead but the staff and management of Aer Lingus have shown that they are more than able to meet those challenges. All of them deserve our congratulations. Much pain and sacrifice was involved in the action that was needed to ensure the survival of Aer Lingus as it sought to reverse spiralling losses. Not long ago the very existence of the airline was in doubt. The employee share ownership plan resulted from the survival plan initiated and carried out to ensure the continued existence of Aer Lingus.

This Bill gives effect to the employee share ownership plan that was agreed between the Government and the unions. The involvement of the employees in the ownership of the airline is very welcome. In any business, a sense of belonging to the business heightens workers' awareness of it and the highest sense of belonging is where the workers own a share of the business. Staff feel they are a real part of the airline and it is a powerful motivation for increasing productivity. Out of this situation flow new ideas and a drive to succeed.

The presence of worker directors on the board is the logical development of employee share ownership. Existing legislation only allows for 5% of the share capital of Aer Lingus to be owned by staff. This legislation is needed to allow for full implementation of the employee share ownership plan, the issue of an additional 9.9% stakeholding to staff and the appointment of an employee share ownership director. A further director can be appointed by the Minister for Transport from nominations submitted by the unions. Staff will then have an important stake in the company and if recent years are an example, all efforts will be focused on building up the company so that its value can be enhanced. This is fair to the workers who have contributed so much to the remarkable turnaround in the fortunes of Aer Lingus.

There is a provision in the Bill to establish a framework to facilitate outside investment if the Government decides it is necessary. I have no problem with such a move and, in the ever changing environment in which we live, such a process may be undertaken in the future. The aviation world changes rapidly, as we have seen in the past few years, but we are an island country. Business and commerce with the rest of Europe and the world are vital to our well-being as a nation. Any short-term gain that might accrue from a diminution of the State's interest in Aer Lingus must be balanced by consideration of what is best for Ireland in the long-term. Private sector investment is necessary, as has been indicated by Aer Lingus itself. It should be pursued as quickly as possible but a mechanism should be available to the State so the strategic long-term role of Aer Lingus for the State can be an integral part of that process.

I can think of no Minister better able to handle the complexities of this important question than the current Minister for Transport. He has already shown a wonderful grasp of the intricacies of the transport problems that beset our country and, more importantly, a willingness to solve them. This Bill is a forward thinking solution to some of the difficulties surrounding air travel and I commend it to the House.

Mr. Ring

I am glad someone has confidence in the Minister. I welcome the opportunity to speak on this Bill and I hope to mention Knock Airport.

I compliment the management and staff of Aer Lingus for the way they have turned the company around. In recent years everyone thought it was doomed and that it would never be profitable again. However, the management and staff of this public sector company made major sacrifices and displayed great commitment. When the company is restructured, the staff should be rewarded for the effort they made to ensure the airline's survival. I hope too that they will not forget the staff in the past who made major sacrifices for this company. I hope their pension rights will be protected and that this company will go on from strength to strength.

When the Minister appoints the board, I hope we do not have the usual political appointees. I trust he will pick the people who can do the job best, and not pick people because they are Fianna Fáil members or supporters.

I am not sure about privatisation. I would prefer that this company should carry on as it is and that the taxpayers funding it should get from it some of the money they have invested over the years. If Knock, Shannon, Cork and Sligo airports had got the same investment as Aer Lingus, I am sure they would be thriving today.

Regarding the west, in particular what is happening at Shannon and Knock, there was a proposal a number of years ago that Galway should be given consideration as the regional airport. We have made enough political mistakes in this country. We have the airports in place. Galway is part of the western region, with its university, colleges and much State infrastructure. Let us spread the goods around. Let us have Knock as the regional airport. Aer Lingus was not at all helpful to Knock and did everything in its power to ensure Knock airport would not succeed. I am sure the Minister has met the board of Knock airport and will meet it again. Its members have been looking for subsidies and grants. I hope Knock airport will find favour. There is a new management in place, and I congratulate them. They have done very well.

I was in Knock airport recently meeting a family member and the place was buzzing. It was great to see the planes coming in and out and to see so many people around. The management is making a major effort on a small budget, and I hope the Government will do whatever can be done for that airport within the law. It needs support. It is important for the west and its infrastructure that Knock should succeed because people use it, support it and want it there. There is no point in the Minister and his Department supporting Galway as the regional airport. There is no need for that. If I see that happening, I will bring the issue to Europe and say that decision is wrong, because we already have a regional airport, namely Knock.

I hope that Shannon can be protected. There is talk of the market being further opened and that the Shannon stopovers may not continue. It is important that the Shannon infrastructure be supported and that what is there is left there. It is important too that the staff would be protected.

Shannon has contributed to opening up the west. I know people will argue that they want to fly into Dublin, but the transfer of the Shannon stopover to Dublin had a negative effect on tourism and on Shannon airport. The people there have fought back and done their best to keep the airport up and running. I hope the Government sees fit to support it, particularly now, with the break-up of Aer Rianta.

I was disappointed over the years when Aer Rianta did not take over Knock airport. I hope the Minister is making the right decision on Aer Rianta, because its existence has been important. In particular it supported Shannon and Cork airports. The Minister says Aer Rianta will take to Dublin whatever debts are involved at Shannon and Cork. I disagree with EU policy in this regard. It is fine for Europeans, but we are a small island country. It is fine for Britain and for the other European countries. We are one of the few island countries in the world and must have air travel infrastructure. People must be able to get in and out of this country. If we have to subsidise it, so be it. We must tell Europe it cannot always dictate, telling us what we can and cannot do. It is important that we keep that infrastructure in place.

In 1986, when the then Minister for Transport, the late Deputy Jim Mitchell, on whom the Lord have mercy, opened up the airways and Ryanair came on the scene, everyone said it would not last six or nine months and would never work. Ryanair is now the number one carrier in the world. It has worked, and has put manners on every other airline. Ryanair has brought down the cost of air travel to a reasonable level so that people can travel all over the world. The company must be complimented on its success under Mr. O'Leary.

Mr. O'Flynn

He is very arrogant.

Mr. Ring

The Fianna Fáil Party has no time for anyone who is not a Fianna Fáil supporter, or who is not loading money into its coffers. That is the Government's problem. Mr. O'Leary speaks his mind and has done well. He may be arrogant but he is a great and successful businessman. He has put this country on the map and shown what an Irishman can do. He has broken the monopoly.

Not too many years ago there were not too many flights out of this country. If one rang Aer Lingus it would merely think of a figure to charge as a fare. Thanks be to God, those days are gone. The local agent would say that Aer Lingus might be able to provide a seat in one week or another, but the price was set and one had to take it or leave it. In all fairness to Ryanair, it broke that monopoly all over the world, and it must be complimented. Success must be complimented.

Whatever decision the Minister and the Government make on privatising Aer Lingus, I hope it is the right one for the taxpayer, as well as for the staff and management of Aer Lingus. It is important that we have a national carrier. Aer Lingus has done well over recent years, when one considers the consequences of the war in Iraq and the SARS epidemic. The company survived and made profits of €80 million. It must be complimented on that. I hope Aer Lingus can keep that success going. It had a cabin crew dispute a few months ago. I hope such disputes can be resolved because it is important that Aer Lingus should do well and should not be a drag on the taxpayer.

I ask the Minister to support the board of Knock airport when he meets the members. They have some projects and ideas, and some funding is needed to promote the airport and put further infrastructure in place. The management board is doing an excellent job. Now that the airport is up and running and going well, this is the time to give it the investment and support needed, in whatever way that can be done.

It is important for the west that we have that infrastructure. It is important for our emigrants that they know they can hop on a plane and land in their own country at any time. There was a problem in Knock recently when a chartered flight due to land late at night encountered some difficulty related to fog and lighting. I hope the Minister can deal with such issues in the future and that the necessary infrastructure will be put in place.

The Knock airport management has done an excellent job. I was there one evening a few weeks ago when three or four flights were coming in and out. There was a great buzz in the place. There were three funerals coming in from abroad, one from Scotland and two from England. There is not a day now when one will not hear of a funeral coming in to Knock, and continuing on to Sligo or perhaps Galway. It is important that the Knock airport management board gets the support it needs.

The Minister should not be afraid to give State aid to the regional airports. The airports at Cork, Sligo and Knock deserve it. It is important to have the infrastructure in these counties and that the regional airports work.

I will give an example of where infrastructure is needed. A constituent of mine, who has not been in Dublin for a while, was rushing to get into the city today. He was planning to fly out from Dublin Airport this morning, and rang me just before he got to Heuston Station. The arrangements at that station have been changed again, with only one lane of traffic heading towards the city centre. The bus lane was not being used, and it took this man an hour and a half to get from Heuston Station to the city centre. He was due to meet me but could not do so because he had to get to the airport.

I ask the Minister to look at Heuston Station. I cannot understand why there is now only a single lane. Three or four lanes of traffic converge into a single lane. My constituent told me there was a dreadful traffic bottleneck this morning. There is no point in having bus lanes if they are not being used. He told me that only the occasional taxi driver was using the bus lane this morning while a tailback had built up for miles. I presume he was in time for his flight because if he was not I would have heard from him.

Aer Arann is doing an excellent job and it is important we have cheap flights from Dublin to Knock, Galway, Cork and Sligo so as to take cars off the roads and minimise the traffic coming in and out of Dublin. I am delighted to see local airports working and I hope we will continue to see them doing so. If Aer Lingus is sold I urge the Minister to ensure that the necessary finance is put into regional airports.

I hope the Minister is doing the right thing in introducing this Bill and that Aer Lingus goes from strength to strength. It is important that the national carrier does well. However, the taxpayer must not be expected to subsidise Aer Lingus, as we did for many years. Aer Lingus came back to the Exchequer and to the taxpayer on many occasions in the past when the company experienced crises. Now that the company is showing a profit I hope it will continue to do so. The company has been streamlined and is now being run as it ought to be. Major sacrifices have been made by the staff. The profits which the company is making should be divided among the staff and used to pay back the Exchequer, which rescued the company so many times in the past.

I hope Aer Lingus will go from strength to strength. I wish many days of success to Ryanair, which broke the monopolies in this country and throughout the world.

Mr. O'Flynn

I welcome the Bill. Aer Lingus continues to thrive. No other State company has responded so well to competition and this has benefited the company's employees and customers alike.

When we consider that less than 20 years ago the short flight to London cost hundreds of pounds we can see how far we have come in the area of aviation. The arrival of Ryanair in the 1980s forced Aer Lingus to confront a new reality. The airline has experienced many crises and much turbulence in the intervening years and it has not only survived but actively thrived. The company's turnaround since the terrible atrocities of September 2001 has been remarkable when we consider what happened to other international airlines in the immediate aftermath of those appalling events. Aer Lingus's network has doubled in two years, with 28 new routes since September 2001 while many national airlines, such as Swissair, Sabena and British Airways, have either gone out of business or reduced their passenger numbers.

Aer Lingus has served Cork Airport well in the 42 years since the airport opened. I acknowledge that service and I thank Aer Lingus for its support of Cork Airport. I accept that Aer Lingus, like all airlines, must compete in an aggressive and changing aviation business, but recent developments in Cork give cause for concern. The dropping of the Cork to Dublin route last month, after 42 years, leaves a great void. No longer can the public travel by our national airline between the two cities. The route is left to Aer Arann, whose fare from Cork to Dublin is €138 return. This is far in excess of what it should be. Aer Arann can offer fares of €49 to Edinburgh, which is twice or three times the distance.

Is Aer Lingus abandoning us in Cork? I hope not, although the signs are not good. I would like to be assured by Aer Lingus that the company is committed to Cork. I understand that next summer Aer Lingus will reduce its London service from five flights per day to four services per day, as per the company's current Internet timetable. This is not a good sign for Cork. Cork Airport is booming, with passenger traffic expected to grow by 15% this year, or 300,000 more passengers than last year, to 1.7 million passengers. Will Aer Lingus, Cork Airport's largest customer, continue to be part of that growth? I hope so. Will other airlines have to take its place?

We saw huge growth in Cork Airport this year with the arrival of Czech Airlines which flies from Cork to Prague. The local airline, Jet Magic, has opened 11 new routes to the United Kingdom and Europe and in a short space of time has carved out a nice niche for itself. The airline is targeting people who want a little extra friendliness, courtesy and helpfulness from staff. Jet Magic flies into London City Airport, a small airport in the east end of London. I have not tried the route yet but I know of numerous people who have. Passengers not only receive in-flight hospitality but when they arrive in London they find their luggage waiting for them in the terminal and they do not have to queue up and wait for it. I do not know how long this will last as the airport gets busier but it is nice to have a friendly airline taking such an interest in its passengers. I have recommended Jet Magic to many people although I have no vested interest in seeing the company succeed.

Aer Lingus recently announced three new European destinations, Alicante, Milan and Barcelona, the most successful of the three new routes launched by Jet Magic earlier this year. I question Aer Lingus's motive in this? Is it trying to put a new airline, which is Irish-based and has a number of Cork directors, out of business? Aer Lingus has served us well in the past but I hope it will make it easier for people in Cork to do business in the future and not take predatory action against small airlines based in Cork. Last week, Cork International Airport passed the 2 million passenger mark. The airport has enjoyed phenomenal growth this year and will shortly become the second largest airport in Ireland, in terms of passengers going through the terminal. Transatlantic services will shortly be arriving in Cork International Airport. I commend the management of the airport on its success. I particularly commend the airport director, Mr. Joe O'Connor, and his staff on their total commitment to serving the south-west region and the public of that region. It is a small but hugely successful and personal airport.

Aer Rianta has commenced the building of the new €70 million terminal to cater for growth, and a further €70 million will be invested in a new road structure, car park, fire station and air traffic control tower to facilitate the growth of Cork Airport serving the tourism needs of the south-west. Today, Cork is one of the fastest growing regional airports in Europe and I hope Aer Lingus will continue to be a strong component of any future growth at the airport.

I commend the Minister for Transport, Deputy Brennan, for coming to Cork to announce that the terminal would go ahead despite the huffs and puffs we heard prior to the announcement. I thank the Minister for coming to Cork, touring the airport and telling the management and staff how things are and how they are going to be. It was a pleasure for me to see him and the Taoiseach turning the sod for the new development some months ago.

I would like to see Ryanair doing more for the regions. Mr. Michael O'Leary has been huffing and puffing and trying to blow the house down. He thinks he is running the country and that he can get what he wants when he cries like a child and puts full-page advertisements in the newspapers criticising the Taoiseach and Ministers. He thinks they will click their heels when he snaps his fingers. That is not the case. Mr. O'Leary is not running the country. My advice to him is to belt up and care for his customers. He should respect his customers. Ryanair is not the only low fares airline in the country. Aer Lingus has responded very well and has introduced a number of new routes with low fares. An Aer Lingus flight to Malaga, booked last week, costs €69 each way, plus taxes. The same flight would have cost between €300 and €400 a couple of months ago. Aer Lingus is rising to the low fares challenge.

Ryanair's days as the low fare airline are numbered. People will not put up with the arrogance of the airline. Mr. O'Leary's policy is not to cater for those who are late for or miss their flight, not to allow those who forget their passports or other identification to board their flight, and to charge more where baggage weighs more than 15 kgs. The airline charges the customer an arm and a leg in extra charges. Ryanair is a low fares airline if a customer abides by Mr. O'Leary's rules, books his or her ticket three to four weeks or months in advance and arrives at the airport on time.

I am aware of the case of a 79 year old man who travelled from Stanstead Airport recently. He and 40 other passengers were delayed by road works. Were Mr. O'Leary and his airline concerned? No. These people were charged for a second ticket because they had missed their flight.

Mr. O'Leary appeared before the Joint Oireachtas Committee on Transport and I saw nothing but arrogance from him. He stated to the committee that it was none of his business and he did not care how people travelled to the airport. He used different words and was very disrespectful to the committee when he suggested that passengers could travel to the airport on their backsides if they wished because it was not his concern.

As my colleague, the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, observed, Mr. O'Leary would be better off providing wheelchairs for his customers and ensure they arrive at the departure gate on time instead of block booking full page advertisements aimed at the Taoiseach, the Minister, Deputy Brennan, other Ministers and the former Minister, Senator O'Rourke. He would be better employed concentrating and improving his services for the fee-paying passenger. Aer Lingus offers low fares and, therefore, I believe Mr. O'Leary's days are numbered and he will change his attitude. His spoilt boy attitude will get him nowhere in future.

My record on Cork Airport is well known. I have fought tooth and nail for its expansion. Investment in Cork's local airport was always minimal in contrast with the massive sums allocated at all times to Dublin Airport. The protected status and the subsidisation of Shannon Airport ensured its viability. Cork Airport was always the poor relation in the eyes of Aer Rianta. I actively supported workers at the airport when their jobs were threatened or they needed support on specific issues.

At one time there was a demand from certain business interests that Cork Airport be privatised. I supported the stand made against this proposal in 2001 by Cork Airport Against Break-up. The CAAB demanded significant Government intervention as an alternative to such a move. It stated that this investment was crucial to the survival of this important local facility. The CAAB believed that the airport's best interests would be served by remaining under the wing of Aer Rianta. That was the correct stance in the climate that prevailed, but times have changed.

I welcome the Government's decision to establish a fully independent and autonomous airport authority for Cork, Dublin and Shannon. This will allow the three airports the freedom to compete fairly on a level playing field.

Cork Airport is about to embark on an exciting new era which will be of benefit to Cork and will bring a new dynamism and significant growth in business and jobs. The Government has invested almost €200 million to clear the airport's outstanding debts and to cover the current losses associated with the works for its upgrading. This will enable the airport to make a fresh start free of all debt.

The new €140 million terminal extension is under construction. The new infrastructure will allow Cork Airport to cater for a rapid expansion in business. Under strong, new leadership, free from restrictive Dublin-based central control, Cork Airport will be in a position to aggressively seek new business and offer airlines and passengers a wide range of choice.

Employees at the airport have nothing to fear from the proposed change. It is an opportunity that should be enthusiastically embraced and fully supported. If it is not grasped, there is no guarantee that such a chance for growth and expansion for Cork Airport will come around again. The Minister for Transport, Deputy Brennan, intends to put in place a structure that will be a launching pad for a new era of expansion.

The chairman of the new Cork Airport authority, Mr. Joe Gantly, is a businessman who is held in the highest regard in Cork and abroad. He is managing director of Apple Computers in Europe. In Cork, where Apple employs 1,200 people, he is respected as a person of the highest calibre, a man who has clearly proven that he can deliver in a highly competitive business arena. Under his leadership, Cork Airport will finally be allowed to show its true potential. It will benefit from the experience, enthusiasm and energy of the progressive director of Cork Airport, Mr. Joe O'Connor.

I know that workers at Cork and other airports are concerned about how the change will affect their positions. I understand their fears and concerns. The Minister, Deputy Brennan, has had meetings with the Aer Rianta unions on several occasions and has assured them repeatedly that there will be no compulsory job losses and that there will be no change in the terms of employment and conditions the workers enjoy. He has stated clearly that the concerns of the unions will be fully addressed on an ongoing basis between now and the intended date of the establishment of the new airport authorities next year. He is fully convinced that all airports will benefit under the new proposals, if they rise to the challenge.

The Government has taken a brave step in giving the three airports their independence. I am fully convinced that the new, independent Cork Airport will have the drive and expertise to expand business on a scale that could never be attained under the old regime. The move will result in a boom in business for Cork Airport. It will bring more, not fewer, jobs to the region.

When the proposals for the break-up of Aer Rianta were announced, I was delighted to hear that Cork Chamber of Commerce and all the business interests in Cork fully supported the Minister. I do not understand how one single union body in Dublin Airport, the dominant body, holds such sway over the workers in the other two airports. It is trying to convince them that the breaking away of Cork Airport would be bad for the workers and the region. That is not the case.

It is important to note the key points. The Government has decided to establish Cork Airport as an autonomous State-owned airport independent of Aer Rianta. The airport will remain in full State ownership. The target is to establish a new airport authority to manage and operate it on a commercial basis within the next 12 months. The new board will be composed of persons of the highest calibre, including trade union representatives. It will bring together international, national and regional expertise, strong leadership and a focused commitment to the growth and development of Cork Airport. The chairperson designate and deputy chairperson designate will also be members of the Aer Rianta board to be dissolved in 12 months and which will assist the Minister for Transport in implementing the decision on full autonomy for Cork Airport.

The major development programme under way will proceed on schedule. It is heartening to see the new road network being built and the footprint for the new car park and terminal. The debt associated with this investment programme, together with the existing debt of €40 million and interest payments of more than €6 million, will be removed from Cork Airport. This decision heralds the beginning of a challenging and exciting new era for Cork Airport which will be free to compete with other airports and vigorously pursue new business, free from central control. European traffic grew by 16% in 2002.

Given this new debt-free beginning and under strong and visionary leadership, Cork Airport will have the opportunity to expand and develop on a scale never before envisaged. The reforms involve bringing in more airlines to Ireland. No privatisation is proposed. No job losses will result. There will be no change in the terms and conditions of workers in Cork Airport.

In summary, these changes are about a new beginning for Cork Airport, more choice for the people of Cork and surrounding areas, growth in jobs and business and an opportunity for the airport to embrace enthusiastically the challenges that lie ahead. While I do not want him to get a swelled head, we are fortunate to have a Minister for Transport with vision to see the future potential for Cork, Shannon and Dublin airports. I commend him for giving us an opportunity in the Cork area to have our own autonomous airport structure within State control so as to allow us to develop our regional business, as we have been doing in recent years. I have had many informal meetings with those working in Cork Airport to reassure them that they have nothing to fear and that, due to their track record of hard work, they will go from success to success.

Ms O'Sullivan

I welcome the opportunity to speak on the Bill. Our spokesperson on transport, Deputy Shortall, has outlined the Labour Party's deep concern that the Minister is using this legislation to prepare Aer Lingus for privatisation. In effect, the Minister has used the employee share ownership plan as a screen behind which to hide the intention to privatise the airline. My concerns about this matter were heightened when reading the report of the debate on transport questions two weeks ago. When the Minister was asked what his intentions were with regard to Aer Lingus, he said:

I take the view that change is probably inevitable . . . I take a very pragmatic view of the future of Aer Lingus and I will come to a conclusion on that question shortly.

The Minister also indicated that the chairman of Aer Lingus had expressed the view that a private sector investment process should be initiated without delay. The interchange in the oral questions to the Minister clearly indicates that Aer Lingus wants to take the route of privatisation.

Two weeks ago, the Minister said he had still not made up his mind on this issue, and it would be interesting to know if he can tell us now whether he has done so. The Minister's position leaves an uncertain atmosphere and he should tell us his views. Unfortunately, he is leaving many issues hanging in the air without telling us what he wants or intends to achieve. As a result we are getting a haphazard movement in certain directions, which then becomes reality. There does not seem to be any leadership in the process. I do not yet know what the Minister's view is on privatising Aer Lingus. However, the Labour Party does not support the privatisation of the airline and does not want to see more and more State companies being sold off for no good reason and with no public information, plan, financial examination or reference to the spatial strategy. That strategy, which is just a year old, set out a detailed and complex network of hubs, gateways, interconnections and links throughout the country.

If the Minister pursues his plans for Aer Lingus and Aer Rianta, we will have an even greater development of the eastern seaboard, with everybody either living there or commuting to work there. People are already commuting to Dublin from halfway across the country but in future they will be travelling even further if there is no link-up between the Minister's transport system plans and the spatial strategy of his colleague, the Minister for the Environment, Heritage and Local Government.

I appeal to the Minister to provide more information and to spend more time thinking through the consequences of his proposals. He should pay attention in particular to whatever reports are on the table concerning these issues. Some very good reports have been published concerning the importance of Shannon Airport and I will refer to them later.

It is important to pay tribute to Aer Lingus for the way in which the company has turned around its affairs. The process has been painful but the company has managed to achieve profitability in the hugely competitive climate of the international aviation industry. Aer Lingus operates with other partners and provides a good service, which is surely what we want from our national airline. The company has gone through a difficult period which affected its employees but in the current situation there seems to be no good reason to sell it off. The Government should think through all these issues because there is no reason Aer Lingus should be sold off to the private sector under EU competition rules. The Minister says he has not yet made up his mind so he should take these points into account.

Business people in the Shannon region have problems with Aer Lingus given that there is no comprehensive air service from Shannon to Dublin and other European capitals, which would enable them to do their business and return within a reasonable time. This is particularly the case with early morning and late evening flights which are insufficient. Many of the decisions concerning the airline are taken by decision-makers in Dublin, rather than in the interests of Shannon or Cork. Aer Lingus should address these issues and ensure that the interests of its customers in Shannon and Cork airports are catered for.

In 1997, the Tucker study was undertaken for the Mid-West Regional Authority. It indicated that 36,000 jobs on the western seaboard were underpinned by Shannon International Airport. If that study was updated it would certainly bring the number of jobs to 40,000 of more. Shannon Airport is hugely important to the mid-west region for industry and tourism as well as for the region's general economic infrastructure and interdependence. The Minister should not do anything that would affect the economy of the region.

It has been suggested that the 50-50 status between Shannon and Dublin with regard to transatlantic routes will inevitably have to be changed as a result of the negotiations concerning the EU open skies directive. It has also been suggested that, while the Government does not wish to do so, it will have to implement such change as a result of the EU's competition rules. This, however, is not the case. Information from Mr. van Hassell in the European Commission indicated that in the context of the open skies directive, it is not necessary to change the current equal proportion of transatlantic flights coming to Shannon and Dublin because that applies to all airlines. In other words, there is no competitive advantage for one airline over another and, therefore, what applies to Aer Lingus also applies to Delta and other transatlantic carriers. In effect, the equal status does not have to be changed under the open skies negotiations.

The Minister should have some concern for the serious fears being expressed in the Shannon region about the possible change in the existing rules. Transatlantic traffic represents over 40% of Shannon's entire turnover. It represents approximately 7% of Dublin's entire business. It is of huge importance to Shannon, therefore, whereas it is of relatively minor importance to Dublin. It is one of the few instruments of balance in terms of regional development and giving a leg up to a region as opposed to the capital city. I urge the Minister to maintain that balance because serious concerns have been expressed in the Shannon region from all sectors – business, tourism, trade unions, ordinary citizens and people who use the airport – about the consequences of losing transatlantic business which is inevitable if the current status changes.

A deputation appeared before the Oireachtas transport committee in Leinster House and it pointed out clearly that in other European countries where there was an opportunity to fly to any airport, in nearly all cases the airlines fly only to the capital. They do not fly to other cities because it suits airlines to fly to one destination if they are travelling that distance across the Atlantic. If they get the opportunity to fly to one place and that place is the capital city, experience appears to indicate that they will gradually drop routes to other destinations. We have very good reason to fear that if the Minister removes the 50:50 status that currently exists, Shannon will lose routes to Dublin and that will add to the problems of the east coast as well as those of the mid-west. It will add to the east coast problems in terms of an already very congested airport in Dublin and the problems will be immeasurable in terms of the mid-west region. People are already travelling to Dublin Airport from wide distances around the eastern seaboard and the Minister should be encouraging people to use the other airports and not put measures in place that will discourage the use of the other airports by airlines and passengers.

That is the main point I want to make. It is vitally important that the Minister reviews that issue before he makes a decision. I understand he will be making a decision on it fairly quickly but it is vital that he takes into account the serious concerns expressed in the mid-west region. That one measure gives us the opportunity to benefit from transatlantic numbers, and that benefit is considerable in terms of the money that transatlantic passengers bring in. These figures are somewhat out of date but one study stated that every 3,000 leisure travellers arriving via Shannon for a week in the west of Ireland spent over £1 million on accommodation, food and drink, gift shopping, activities, entertainment and internal transports. We are talking about the loss of a very large amount of money to the region.

On the question of regionalism and the importance of having a balance in the country – an issue which does not come directly under the Minister's Department – but it is crucially important that the spatial strategy issue is addressed. Some aspects of the strategy come under this Minister's Department and I particularly refer to the rail aspect and the importance of having the western corridor and the proposed link to Shannon Airport. The Shannon group which appeared before the transport committee, led by a member of the Minister's party, Councillor Seán Hillary from Shannon, made a proposal which has been endorsed by the committee that a study should be funded on a rail link between Shannon and Limerick, along the west coast, through Limerick, along the south-east to Dublin and other parts of the country.

I urge the Minister to take on board the seriousness of the issue of rail and road connectivity to Shannon Airport. I realise the issue of road connectivity should be addressed to the other Minister but many of those projects are now behind schedule, particularly the tunnel in Limerick – the fourth crossing which will facilitate access to Shannon Airport from other areas. Those areas are nearer to Shannon but very often people choose to fly through Dublin because it takes so long to get to Shannon by road from certain parts of the country. All of these issues are crucially important in terms of Shannon and access to the airport, which is vitally important to people in the region and in terms of its potential. The people who use Shannon probably do not travel within a very wide radius of the airport but the potential exists for it to be wider and for Shannon to be a hub of activity for the mid-west, parts of the midlands and the upper part of the south-eastern and southern regions.

I want to address the proposed break-up of Aer Rianta and express the concerns already expressed by my colleague, Deputy Shortall, and my party leader, Deputy Rabbitte. The Minister appears to be going ahead with the break-up despite the PricewaterhouseCoopers report, other internal reports carried out by unions, management and others within Aer Rianta, and without any kind of transparency in terms of the information the Minister has on the viability of the three airports as separate entities. Of particular concern, and Deputy Shortall referred to this aspect, is the fact that there is no business plan or any coherent reason given for breaking up a successful company into three separate components.

There has been a continuous lobby in the Shannon region to have some independence; some people wanted full independence. I am aware the Minister has some support in the region but many people would have settled for limited independence, and that is the position my party has consistently taken with regard to Aer Rianta. We would have settled for a level of independence because there was a belief that operations were being driven by Dublin and that we needed to be able to take strategic decisions in the mid-west region – I am sure the Cork people felt the same about Cork – with regard to marketing and extending the routes that come through Shannon. A large sector in the region, however, was not pushing for full independence and I suggest to the Minister that the sector pushing for full independence had not done its homework either, because it did not have any more information than the Minister on the way this would work. Mr. Pat Shanahan, whom the Minister has appointed as the chairperson of the interim board, is a very good person. The Minister has put some very good people on the board and I believe they will do their utmost to make this work. However, I am concerned that they do not have the satisfaction of knowing that this is a viable proposition. They will work as hard as they can to make it work if the Minister persists but I put it to him that he has information from the PricewaterhouseCoopers report and other information at his disposal which would indicate that it does not make sense to ask those companies to operate separately. It will be a double albatross around the neck of the Shannon company if the Minister also changes the 50:50 gateway status between Shannon and Dublin, if the rail link is not provided and the other infrastructural projects are delayed in the way they have been up to now. There is a whole series of interconnected issues in this debate. I appreciate that today we are addressing the Aer Lingus Bill but all of these issues are very much connected to each other.

The Minister is someone who likes to make announcements and is busy trying to get things done. However, some of these decisions are crucial to the lives and the livelihoods of a large number of people and to the economic and social welfare of an entire region in our case and, to a lesser extent, the Cork region also. I ask the Minister not to rush into decisions that will not be easy or even possible to reverse. Before he makes any decisions on these areas I ask him to allow for proper debate and present the facts and the information that is available in a public way. In that way, decisions will be made on the basis of sound economic information, following proper debate where people have the information and in the best interests of the country as a whole. The country will not thrive if a growing number of people believe they have to live and work within commuting distance of Dublin, villages continue to decrease in size and rural areas continue to lose schools, post offices and other support services.

It is not good enough for the Government to announce a major spatial strategy featuring an interesting collection of terms, including hubs and gateways, leave it untouched for a year and then introduce an alternative transport strategy, which ignores the spatial strategy, forces people to leave the designated hubs and gateways and weakens the regions while strengthening the greater Dublin area. It must rethink its approach.

While I appreciate the Minister is trying to make decisions in his Department, they are inextricably linked with other Departments, including the Department of Enterprise, Trade and Employment. It is vital we maintain jobs in the Shannon region, which has experienced a series of job losses in the past year, including the loss of more than 100 jobs less than two weeks ago caused by the closure of NETg, part of the Thomson Corporation.

My colleague, Deputy Shortall, has already indicated that the Labour Party is seriously concerned about and opposes the hidden agenda in the legislation, the sell-off of Aer Lingus. I hope the Minister will take on board some of the points I have made. While I appreciate that several of them have a wider dimension, it is crucial he listens to the voices of those who are concerned about the decisions he appears to be about to make.

Mr. McHugh

The Aer Lingus Bill 2003 gives effect to the employee share option plan and makes provision to facilitate a private sector investment process if that option is pursued in the future. One must acknowledge the remarkable recovery Aer Lingus has made from the problems it faced several years ago. On the brink of bankruptcy in 2001 when it made a loss of €52.1 million, the company made a remarkable turnaround in 2002 when it recorded an operating profit of €63.8 million. Management and workers were responsible for and can take pride in this turnaround which has been so successful that the company expects to make profits of around €75 million this year. As part of the agreements arrived at to achieve this transformation, an employee share option plan was agreed. The Bill gives effect to the plan and, as such, is to be welcomed.

In effect, the provisions of the Bill are about setting part of the scene for the future of aviation. It would be impossible, therefore, to contribute to this debate without considering the PricewaterhouseCoopers report on the future of aviation and Dublin, Cork and Shannon airports, the contents of which we became aware of in recent weeks. I do not agree with the wave of condemnation that greeted the Minister's proposal to break up Aer Lingus, which arose as a result of the contents of the PWC report. The future of our airports must be governed by a strategic plan, geared towards the management of the airports, which has at its core the notion of service, viability and profitability. The great need for balanced regional development requires the application of a regional focus and, if necessary, awarding compensation to address the disparity in terms of aviation between Dublin and the regions.

The forecast in the PWC report that Shannon and Dublin airports would continue to be loss-making in the initial years after the break-up of Aer Rianta does not mean our first reaction should be to retreat to the bunkers and cry, "No change". This option is never credible in a changing world, particularly in a progressive society such as this. One of the main reasons for the proposed break-up of Aer Rianta is to create competition between the airports. I subscribe to the notion that increased competition is good because it leads to improved performance and efficiency and should in theory lead to increased profits.

The PWC report is based on the premise that nothing else will change after the break-up of Aer Rianta, which is not a sustainable scenario. Where the cost base in any of the airports is too high, an examination will need to be carried out to establish the reason and adjustments will have to be made to correct the position.

The report contains comparisons between Shannon and Bristol airports, which carry similar numbers of passengers. In 2001, Shannon Airport carried 2.4 million passengers and incurred an operating loss of €1.1 million, whereas Bristol Airport carried 2.1 million passengers and made an operating profit of €16.9 million. Surely it is appropriate to ask the reason for this startling difference in financial fortunes of €18 million.

Similarly, a comparison between Cork and Cardiff airports reveals that the former carried 1.7 million passengers and incurred an operating loss of €3.2 million in 2001 as compared to the latter, which carried 1.5 million passengers and made a profit of €15.7 million, a difference of €18.9 million. The main message here is of inefficiency in the running of our airports. There should be an outcry demanding greater efficiencies as opposed to taking a dog in the manger attitude, burying our heads in the sand or crying, "No change, no surrender".

It has been suggested that autonomy for Cork and Shannon airports would endanger funding for the smaller regional airports such as Galway. Although I do not envisage that this will be the case, I call on the Minister to address this concern. Deputy Ring appeared to warn the Minister not to support Galway Airport at the expense of Knock International Airport. While I do not want the Minister to support Galway Airport at the expense of any other airport, he should, nevertheless, support it in whatever way possible because Galway has been designated a gateway city under the national spatial strategy and is the dominant city and gateway to the region. If the national spatial strategy is to have any prospect of survival, it must be given Government support. It must support the gateways and hubs designated under the strategy if its policy of promoting balanced regional development is to have any chance of survival.

Mr. Sargent

Ba mhaith liom buíochas a ghabháil leis an Teachta McHugh as a chuid ama a roinnt liom. The Aer Lingus Bill is important for the country and my constituents in Dublin North, many of whom rely on Aer Lingus directly or indirectly. For this reason, it is important the Minister's comments are clearly understood as the soft words in his speech may hide a more brutal meaning in the legislation. In referring to a framework for external investment, he stated it would be used in the event that the Government embarks on such a process, as if there is any doubt about the Government's determination to do so. This has been the consistent view of commentators.

Aer Lingus has undergone considerable pain and we all recall that the company let go 2,000 staff in 2001. At the time it wanted 2,500 staff let go out of a total of 6,300 permanent staff. There were also other issues, such as the sale of assets, the pay freeze, the 5.5% PPF pay increase which was foregone and the changes in work practices. There was much trauma within Aer Lingus and it is still a recent memory for many people.

The Minister said that the legislation includes new pension provisions. That is a matter of great concern not only to people in Aer Lingus, but also to many members of the retired airline staff association, which includes former staff members of Aer Rianta and Aer Lingus as well as some members from FLS. They have already experienced the cold winds of change, particularly as regards Christmas, in that they do not expect their traditional Christmas dinner. It is claimed that because the pension scheme has failed to keep pace with wage increases, all members of the scheme have been seriously disadvantaged. They believe it is important that the airline pension is immediately brought into line with other State and semi-State pensions, as highlighted in comparative studies, and that it does not fall below average industrial wage increases.

The pensioners from Aer Lingus are being further disadvantaged. The Government could, without incurring initial expenditure, involve the retired airline staff association in discussions about the future, given that its members are part of that future and that they rely on the pension scheme. When the Minister speaks about introducing new pension provisions, he should include the people directly involved, namely, the pensioners who built up the company over the years, who have given huge returns to the State and who are entitled to be part of the discussions if change is envisaged.

The Minister exaggerated the situation when he spoke about Aer Lingus serving 42 routes and nine new European routes in 2004. As Deputy Boyle said, he did not mention the loss of routes. Cork is close to Deputy Boyle's heart and I understand why people in Cork are sore that the Minister seems to have overlooked that matter. There is doubt among workers in Aer Rianta and Aer Lingus about the future and about what the Government has in store for them, if it is thinking about them at all. The threatened break-up of Aer Rianta, despite not having a business plan, is also strange to understand, given that the Government has been advised that it would be better not to break it up. I ask the Minister to take that advice on board. Aer Lingus is facing privatisation incrementally, but as quickly as the Government can manage it.

It is not often that the airlines are united, but that is the case in this regard. They are united in the way they are looking at the plans for the building programme for a new runway at Dublin Airport, at a cost of between €100 million and €200 million, depending on which report one reads. Deputy O'Sullivan mentioned the mid-west. It is strange to hear the Government talking about Aer Rianta's plans to cause more congestion at Dublin Airport by building another runway when Cork and Shannon are badly in need of additional business. How serious is the Government about the national spatial strategy when it is flagrantly disregarding its principles of balanced regional development in favour of more congestion in the eastern region?

The Government also seems reluctant to grasp the nettle of providing a metro to Dublin Airport which would also serve Swords. Aer Rianta and all the airlines agree that even at its current level of congestion Dublin Airport needs a metro. I understand that the Government was strongly advised that it was not an option not to have a metro. I urge the Minister to take that advice seriously and to grasp the nettle. He must ensure that Aer Lingus, the other airlines, Aer Rianta and the people in Swords, many of whom work at Dublin Airport, get a metro to avoid increased levels of congestion. Operation Freeflow notwithstanding, we know the situation is getting steadily worse. The metro must be built.

Mr. Morgan

For almost 70 years Aer Lingus has represented the people in cities and countries around the world. It has made and continues to make a large contribution to our image abroad as an extremely valuable brand associated with Ireland. The contribution of the company to the development of tourism has been enormous. For decades the economic conditions created by many of the other parties in this House forced hundreds of thousands of young people to leave Ireland, thereby creating a diaspora which stretches across the world. Every Christmas one can expect to see at least one or two RTE reporters at Dublin Airport interviewing people coming home for the festive season from such places as England, America, Australia and elsewhere. It is worth noting that Aer Lingus recently celebrated 45 years of service to Boston.

Aer Lingus has faithfully served the people through good and bad times and during times when airplanes were full of people escaping the economic chaos or full of investors and returning emigrants. Sadly, however, that contribution to Ireland seems to have been lost on some of the Deputies who have spoken in this debate. They seem too eager to support the privatisation of Aer Lingus, which has been facilitated through the back door by the Minister, who has needlessly tied the employee share ownership plan to the privatisation of the airline. The deal on employee share ownership, which was hammered out with the trade unions at Aer Lingus, is not dependent on facilitating privatisation. The legislation should not make that connection. The Minister is duplicitous in his actions. Unless he separates the two distinct and separate issues in the legislation and implements the share ownership plan, Sinn Féin will oppose the Bill and support the amendment tabled by the Labour Party.

I want to comment on the attitude of the junior partner in Government to the Bill. The members of the Progressive Democrats seem to have been muzzled on the issue of privatising our national airline. Perhaps Fianna Fáil is keeping its watchdogs quiet on this issue. One hardly wonders at the attitude of the Progressive Democrats to selling off our national asset to their friends in big business. As a party waging an ideological campaign against working class people and public sector workers, we cannot be in any doubt about their intense dislike of Aer Lingus. The success of our State airline undermines their absolute devotion to the greed based Thatcherite ideology. The Progressive Democrats typically characterise our public sector workers in State companies as lazy, inefficient, bureaucratic and incompetent. They believe that private sector companies, which were not to be found when the country needed to build vital strategic infrastructure, can do anything and everything better. In one year the workers of Aer Lingus turned a loss of €139.9 million into a profit of €35.3 million. The company is on track for increased profits this year and is expanding its services and purchasing new airplanes. A successful State owned company is the type of thing which keeps the Progressive Democrats awake at night. They would prefer privatisation. The Minister should not fall for that.

I welcome the comments of Deputy Glennon who spoke at length about his serious personal and political difficulty with the sale of what he refers to as a major national resource. I agree with him. As he said, we, the people, own Aer Lingus. I understand Deputy Glennon's beliefs are widely shared throughout his party, despite the comments of party members, such as Deputy Killeen who does not understand why a State airline is a strategic asset for an island nation. His view seems to be shared by no less a person than his party leader, whose statement of opposition to privatisation last July was commented on earlier in this debate. Despite the opposition of the Taoiseach and Deputy Glennon to privatisation, the right-wing extremists in the Progressive Democrats and their allies in Fianna Fáil are determined to forge ahead with policies destined to enrich the few rather than benefit the many.

The Government wants to flog Aer Lingus to raise money because it has no desire to raise it in the normal way by putting in place a banded tax system that would remove the crushing burden of funding from the ordinary PAYE worker and place it on the companies and those who for decades have profited on the backs of the workers. I call on Fianna Fáil Members who are opposed to the privatisation of the State airline to stand up and be counted. They should try and reclaim their party so that it stops functioning as a surrogate for the Progressive Democrats and their friends in IBEC.

Aer Lingus does not need to be privatised, it is in profit and making money. It does not need third party involvement. Sinn Féin's message to any Government planning to sell the company, whether through an IPO, a trade sale or some other method, is simple – hands off. Aer Lingus belongs to the people of Ireland. The Government should think long and hard before betraying the people and selling off a vital national asset as it will be fought every step of the way, both in this Parliament and outside it by the workers of Aer Lingus and their supporters. I am proud to count Sinn Féin among those supporters.

However, I call on Aer Lingus to deliver on its commitments to paying cabin crew. The Labour Court has recommended that the 4% pay increase due under the PPF and the 3% due under Sustaining Progress be paid from the dates claimed by the union. Workers in Aer Lingus made huge sacrifices to keep the company afloat, including pay freezes and redundancies. Their contribution should be recognised by the payment of the wage increases they are due.

We have seen in the past how Irish Shipping was sold. In our situation, as an island nation, it would be a scandal if Aer Lingus was to follow suit. It is a vital piece of national infrastructure that should be retained. We are counting on the Minister to keep it for future generations.

Mr. English

This Bill is one that every Member of the House needs to take great care and time in studying, because it sets the scene for the proposed privatisation of some, if not all, of our public companies. Fianna Fáil backbenchers, especially, should not just blindly take the word of their own party on this, but research the proposals properly. As Deputy O'Sullivan said, they should study the hidden agenda in this. I note that Deputy Haughey seems to have seen the hidden agenda and has spoken openly about it. I hope the Minister takes account of his comments, and those of the rest of, us regarding privatisation and the ramifications of the Bill.

I wonder do those Tory Members of the British House of Commons, who blindly followed Margaret Thatcher and supported her privatisation programme, consider that it was this area in which they went wrong politically. In light of what they know today, I wonder do they consider that their actions, or at the very least, some of the consequences, were foolish? That privatisation programme, along with the poll tax, was the making of the British Labour Party in its search for power. It is worth thinking about when considering the Government's furtherance of undiluted PD policy that does not suit the whole country.

The Minister for Transport, Deputy Brennan, went to great lengths to convince us the primary reason for the Bill is his and the Government's concern for the welfare of the Aer Lingus workers. On hearing this I almost wept because the Leas-Cheann Comhairle and I both know that only for the strong unions present in the company there would not be a word about it. If the Minister, or any of his colleagues, had any interest in the workers of this company their primary concern would be for them, and all other workers and taxpayers, to ensure they get value for the tax they are paying to the Exchequer. These workers should not be left in the dark on any issue, they should be properly involved in all decisions regarding their future and their work environment. We must get the best out of their talents through a proper promotion system from top to bottom.

Let us have a look at this company under the heading of the tax that workers pay. Will all Aer Lingus workers and taxpayers have free admission to the glorified leisure centre in Punchestown? They should have, as their money partly paid for it. Are they getting free access to the Luas light rail system if it is ever completed? They and all other tax payers should do so as their money paid for the ripping up of Dublin's streets and the closure of some Dublin businesses. It allowed the Government to let construction companies line their own pockets with overspends of millions of tax euro.

Where is the health strategy that the Air Lingus workers and others paid for? I could continue in this vein because the Government's commitment to workers is a lame joke. In a recent survey, over 80% of the people who were asked said they resent paying tax as they feel the Government wastes the money. It is not a nice state of affairs for a Government that is not trusted by 80% of the population to do what it is paid to do – collect and spend tax wisely. A company performing like this would have gone out of business long ago, and if the Government or even the Department of Finance were subject to the Government sponsored Companies (Auditing and Accounting) Bill 2003, which is slowly proceeding through the House, they would be the biggest offenders and law breakers.

The Government got the people to vote for it at the last general election on a platform of lies and false promises, which it now thinks gives it the right to build leisure centres and other pet projects at whim while refusing to answer questions posed by the taxpayers or even by the Members of this House who elected it to office. It is a national scandal. It is not concerned with looking after the interests of the workers of Aer Lingus.

Any company is only as good as its work force, and, as the old saying goes, "there is no such thing as bad workers only bad managers." If this is true, and I have no reason to believe it is not, were the problems in Aer Lingus prior to 11 September 2001 not a problem of management rather than staff? Unless I am mistaken, to get a job at any level in Aer Lingus, one is required to have a basic education with at least a leaving certificate qualification. Yet it seems that over the years, one need only be a friend of a Minister or the Taoiseach to be appointed to the board of the company. I would like to apply to be interviewed for membership of the board, which has unlimited access to taxpayers' money, yet has little or no accountability. However, interviews for board membership are not held.

If the Members of this House can see nothing wrong with this system I worry for the future of us all. Were Aer Lingus and Aer Rianta used by the Government to reduce the unemployment figures in the north Dublin and Meath areas in the run up to previous general elections? I do not imply anything against any Member of this House, but if that was the case then the real story behind losses in these public companies is one of political involvement with no accountability, again paid for by the poor taxpayer. Perhaps it is not true, but it is time the record was put straight. It is also time that all appointments to the boards of State companies were advertised in the national media and vetted by Oireachtas committees. Perhaps State companies would then more accurately reflect their counterparts in the private sector. The era of jobs for the boys is gone, or at least it should be. It is about perception. I have repeatedly asked the Government to introduce a system whereby anyone appointed to new or existing boards must be approved and interviewed by the Members of the House in committee hearings. Accountability and perception are the values that matter. In this regard our job in this House is to instil trust.

It is amazing that the events of 11 September 2001, involving the tragic loss of lives 3,000 miles away, turned Aer Lingus into a profitable company. Nobody has bothered to ask why. Before that date, a great many more people were flying, so why is it that the company could not make money then? Was anybody in management sacked over this? Did anyone in high authority lose their pension rights over it? Or are the Members of this House supposed to put it down to an act of God?

The company now congratulates itself on its new-found good fortune, even though I thank the workers and their sacrifices over the years for this. The Minister was quick to praise the role of the workers in the financial turn around of the company, and rightly so.

Debate adjourned.