I welcome the opportunity to speak on the Bill, not having expected to do so. I am glad to see the Minister, who is obviously hoping the debate will end relatively soon because there has already been a great deal of discussion on the Bill.
The purpose of the Bill is threefold. First, it proposes to give effect to the employee share ownership plan within Aer Lingus, which has been agreed by the Government and the Aer Lingus unions. Second, it will facilitate any private sector investment process which the Government may wish to follow, depending on policy. Third, it will establish a new pension scheme in Aer Lingus.
A key section of the Bill is section 3, which facilitates the Minister, should he decide to sell off part of the State's interest in the State airline. Section 4 deals with facilitating the issuing of new shares. Sections 6 and 7 relate to ensuring that the ESOP is represented on the Aer Lingus board and facilitate the establishment of employee shareholding schemes themselves.
I wish to address the concept of selling-off all or part of the State's interest in Aer Lingus, the ESOP or ESOT idea and how it has been successful in other companies such as Eircom, in regard to which we made some mistakes. The ESOT is an example of good policy which has worked well for those involved. I also wish to make some general comments on Cork Airport, Aer Lingus's involvement there and its future and how the company has transformed itself under a new management mindset.
There are a number of dangers associated with the selling-off of Aer Lingus. The Minister knows that Fine Gael does not have a problem with the philosophy of privatisation. However, when one considers privatising a company like Aer Lingus, a significant number of issues need to be debated carefully. The Fine Gael spokesperson on transport, Deputy Naughten, has on numerous occasions called for a White Paper on Aer Lingus to map out its short, medium and long-term future as the Government sees it. Without a White Paper, any plans to privatise Aer Lingus will be viewed with a sceptical eye as a way for the Government to use the company as a cash cow, offering the Exchequer a significant opportunity to gain revenue on a one-off basis. This would be a mistake.
If the Minister hopes to privatise Aer Lingus and gain the support of the largest Opposition party, he will need to map out his strategy surrounding that process in a detailed manner. I do not have a problem with the ideology of privatisation, but in Aer Lingus's case we are dealing with a company with much pride whose logo has been carried by aircraft as flagships for Irish people and Irishness. We must be careful how we map out its future. The logo on Aer Lingus aircraft is precious to Irish people living in New York, Boston and other cities across the US, as well as other countries. A considerable number of Irish people living abroad have a great attachment to Aer Lingus as a symbol of the journey between Ireland and their new homes. This should not be dismissed as emotional nonsense because it is more than that.
One of the more practical concerns which needs to be taken into account in the White Paper revolves around the slots retained by Aer Lingus at Heathrow. These are extremely valuable and if Aer Lingus were to lose them we might not be able to get them back. It is crucial that the number of slots held by Aer Lingus at Heathrow for flights to and from Dublin, Cork and Shannon be maintained. People too often refer to the mistakes made during the privatisation of Eircom. In this instance, however, a parallel exists. When we sold Eircom, we unfortunately also sold the physical infrastructure that existed across the country. As a result, we are struggling to roll out broadband. The process in this regard would have been much easier if the State had retained the physical infrastructure to which I refer. It is important, therefore, that we should not lose what I consider to be a national asset, namely, our slots at Heathrow through the sale of Aer Lingus.
We must also consider the role of Aer Lingus in the future. Do we want the Government, on behalf of the people, to have an interest in the State airline? Is it vital that we should have a shareholding in Aer Lingus and, therefore, be in a position to exert influence over its policies? Is this required, for example, in respect of regional development? Under its plans for decentralisation, the Government has made a clear statement that it is beginning to take seriously the concept of developing the regions. If we follow through on that logic, there surely must be a need to provide air links to the different regions. Would the State airline not have a role to play in that regard? I would be sceptical as to whether Aer Lingus would continue to provide its various regional services in the future if a ministerial shareholding in the company did not exist.
I wish to deal now with the concept of the employee share ownership plan. The Government and the Aer Lingus unions did a good day's work when they managed to agree an acceptable ESOP arrangement for the staff. There are many good examples of ESOPs, but I am most familiar, due to the nature of the brief I hold, with that of Eircom, which has been a phenomenal success for its members. The staff of Eircom have a 30% shareholding, making them the largest shareholders in the Valentia Group which runs and owns Eircom. The members of the Eircom ESOP have received substantial cash returns as a result of part of that shareholding being cashed in. There are two staff directors on the board of directors, the total membership of which is 11, which means that the staff have a significant influence on the direction the company is taking. They have set out a 20-year plan which offers real stability for Eircom going forward. I suspect there will be major changes in Eircom and the nature of its ownership and shareholders during the next 12 months. However, there will be no change in the consistent approach the ESOP takes towards the company. That approach offers the kind of stability a company of that importance to Ireland needs.
The Eircom ESOP is the largest single Irish investor in our telecommunications industry. I obviously exclude Vodafone from this as it is not, as such, an Irish company. The Eircom ESOP is a successful model which began when the company was State owned and which has continued since it was privatised, surviving all the mistakes made during that process. It has emerged on the other side stronger, able to offer real value to its members and with the power to influence, in a significant way, the future direction and policies of Eircom.
One can see the potential value of trying to transpose that model to a company such as Aer Lingus. If we make the strategic decision to privatise Aer Lingus the future – I am not stating that Fine Gael either favours or is opposed to it at present because we are not willing to decide until the White Paper emerges – the ESOP model used in Eircom, if it were to be adopted in a similar way in the national airline, could offer real and measurable returns for its members. This model does not merely represent the unions, nor does it, as such, represent the company; it is concerned with the interests and shareholdings of its members. It introduces a new way of negotiating between unions and management within a company and offers a new and viable option for a company such as Aer Lingus, which needs to improve efficiencies in order to face up to competitors that have entered the Irish market in an aggressive way, primarily through offering low fares.
I wish to comment now on some of the changes that have occurred in Aer Lingus recently. The past 12 months have been phenomenally successful for Willie Walsh and his crew at Aer Lingus. Significant changes have been made, leading to a great deal of pain for some of the staff and unions. However, management, staff and unions have managed to move forward together in order to ensure that Aer Lingus has a future. Only last year, the idea of selling Aer Lingus would have been rubbished because the company, which seemed for a number of months to have a bleak future, was not worth very much. Now, however, it is extremely healthy, making profits, has a bright future, is ambitious and is worth a considerable amount of money. It is important to record our recognition of the efforts of those involved and the change in the company's fortunes. If the Minister has assisted that process, his contribution must also be recognised.
I am concerned, however, about a number of the decisions that have been made. The first of these is the discontinuation of the service between Cork and Dublin, which is a mistake. I am regularly informed that flying from Cork to Dublin is not viable. However, I fly that route regularly and the aircraft on which I travel are nearly always full. This decision, under which Aer Lingus is giving its slots to Aer Arann, is not positive. I am not stating that Aer Arann is not positive in its outlook because the opposite is clearly the case.
It is unhealthy that only one airline carries people between Cork and Dublin, Ireland's first and second cities. As a person who believes in the benefits of competition, I would like to see Aer Arann and Aer Lingus competing on the Cork-Dublin route, as opposed to a cosy arrangement whereby Aer Lingus would hand over its passengers on that route to Aer Arann. There is a great deal of concern about the unavailability of jet planes on the Cork-Dublin route. Cork people are now forced to fly on propeller planes which, while adequate, do not provide choice. The way to offer choice and good value for money on that route is through competition.
I hope companies like Jetmagic, Ryanair and others will consider competing with Aer Arann on that route, given Aer Lingus's clear indications that it will not be willing to do so in the future. That is an example of what could occur if Aer Lingus operated solely from a profits mindset and without the influence of ministerial policy.
Aer Lingus, by and large, achieved its success in the past 12 months through the introduction of lower fares. It is currently operating on a competitive basis with Ryanair. It has significantly upgraded its website and its levels of communications and marketing have also improved. The new mindset in Aer Lingus has transformed the company. The willingness of unions to accept that transformation has been extremely helpful.
Cork city has a population of more than 200,000 people and serves a region of approximately one million people. It is unacceptable that it still does not have a transatlantic route. A person from Cork, Ireland's second city, wishing to fly to the US is required to drive to Shannon Airport or fly to Dublin, fly back to Shannon and then fly across the Atlantic. That must change. While I support the viability of Shannon into the future, that does not mean we cannot facilitate a transatlantic route from Cork through minor runway alterations and so on.
This Bill deals with an ESOP, of which I am supportive, and the potential for privatisation of Aer Lingus. The Minister must produce a White Paper which maps out how he and the Government view Aer Lingus in the short, medium and long-term in the context of its being a flagship company and an ambassador for Ireland in the sky and in other countries, thus ensuring the value to ‘Ireland Incorporated' is not damaged. We must not think about this in the short-term as a means of putting significant funds into the national Exchequer in the build up, for example, to an election and then, four or five years later, regretting the decision. That must not happen.
If the Minister for Transport is to obtain Fine Gael's support on privatisation of Aer Lingus, we must be reassured, by way of a detailed White Paper which can be debated at length, that we are not making a mistake which the country will regret in three, five or ten years' time.