Deputy Dinny McGinley is in possession agus tá naoi nóiméad aige.
Aer Lingus Share Disposal: Motion (Resumed)
An bhfuil? Ní raibh a fhios agam go raibh an oiread sin ama agam. Mar a bhí á rá agam roimh an sos, sílim gur margadh é seo atá déanta ag an Rialtas, agus ag an Aire, a rachaidh chun sochair go mór ní hamháin do Aer Lingus ach don tír ina hiomláine. Tá aithne, meas agus urraim againn go léir ar Aer Lingus, an córas eitilte náisiúnta a chothaigh meas an phobail le blianta fada anuas. Tá sé iontach tábhachtach sa chonradh atá déanta go leanfaidh Aer Lingus ar aghaidh faoin ainm céanna agus go mbeidh sé ábalta an caighdeán céanna a chur ar fáil a bhí á chur ar fáil aige ar feadh na mblianta. Is rud an-mhaith ar fad, de réir an méid eolais atá againn, ní hamháin go mbeidh na poist atá ansin ag leanúint ar aghaidh ach go mbeidh breis poist eagraithe - 600 nó 650 post idir seo agus 2020. Ar ndóigh, cuirfimid go léir an-fháilte roimhe sin chomh maith.
Mar a dúirt mé, rachaidh sé seo chun sochair don tír mar go bhfuilimid ag brath ar Aer Lingus chun daoine a thabhairt isteach ó thaobh na heacnamaíochta, an ghnó agus, go speisialta, na turasóireachta de. When this motion came before the House, I considered whether I should speak to it or not, but I decided I should because even in Donegal we have close associations with Aer Lingus. We have Stobart Air, which operates the regional franchise for Aer Lingus as far as Donegal is concerned. I do not know what the situation is in Kerry, but perhaps it is the same there. I acknowledge the decision of the Minister for Transport, Tourism and Sport towards the end of last year to extend the public service obligation, PSO, scheme to Donegal Airport for another three years. It will be a great help to the people of Donegal from a business, industry and commerce point of view. It is an excellent service. It was operated by Flybe but it was taken over by Stobart Air in February. As a regular user, I must compliment it on the service. It provides a good service twice a day from Donegal to Dublin. It saves a person four hours by road and the trip can be managed in about 40 or 45 minutes. It is providing an excellent service and it is so important from the point of view of the economy of Donegal. I admit I am being parochial and regional, but this ought to be acknowledged for the people of Donegal. I see the effect regularly. Every morning people come up to Dublin on the eight o'clock flight. They may have business in Dublin or be going to hospital. They get the flight back at seven o'clock in the evening at a reasonable price. I acknowledge the Minister's decision to approve that scheme for another three years.
There is one little thing I wish to bring to the Minister's attention, and I suppose the best of services do have glitches. This happened on 21 May and I have had a number of e-mails about it. Perhaps the Minister was informed, I think he was. A passenger on the particular flight went to Donegal. It was not possible to land that evening. An attempt was made but they had to come back to Dublin and they arrived about nine or ten o'clock. They were quite a number of passengers, some of whom had been discharged from hospital that evening. They arrived in Dublin about nine or ten o'clock and they were told they had two options. They could take a bus or a coach or some such transport by road that would be arranged that evening to bring them back to Donegal. Some of them availed of it and arrived in Donegal about 1 a.m. or 2 a.m. the following morning. Those who were in hospital or had been discharged that day found it difficult. After being discharged from hospital and an operation or some other procedure, it may not be the best thing to tell people to go on a bus to travel for three or four or five hours to west Donegal. I would have thought, as my constituent said, that perhaps, in a case such as that, arrangements should be made to give them overnight accommodation in Dublin adjacent to the airport so that they could avail of the following day's flight, but that was not available. Not alone was it not available, but there was no one there from Stobart Air at that particular time to arrange anything for them, except the staff of Aer Lingus. Perhaps this point could be considered in such cases.
As I say, this deal is an excellent arrangement and it is significant that all the other airports such as Shannon and Cork airports have welcomed this particular agreement with IAG. It will allow Aer Lingus to do what it has been doing for many years and it will provide extra connectivity. A person can leave Donegal, put his or her case on board, and retrieve it in Los Angeles, California, San Francisco or elsewhere without handling it. When the association with IAG is formalised, as I hope it will be, a person will be able to go to probably any part of the world without having to handle baggage and going through different securities and so on.
I acknowledge the work the Minister has put into this deal. He has been very patient. It is to the good of Aer Lingus and its continuation and to the good of the country. I remember the first time I ever flew with Aer Lingus. It was late in my life. I remember coming to Dublin Airport. I was just going to London, but an ordinary flight to London at that time cost me £154. That was in 1982, 1983 or 1984. In present day money, that would probably be near €1,000. Things have changed a lot since then. Efficiencies have been introduced in Aer Lingus and Ryanair is on the scene as well. We should acknowledge what it has done to bring in competition. At that time it was the preserve of the very wealthy to travel to London by aeroplane but it is available to everyone now. It is a good thing and I compliment the Minister on it and thank him for the PSO scheme in Donegal airport. I hope this deal goes through; it is only good for Aer Lingus and this country.
I call Deputy Bannon. Deputy Bannon will speak instead of Deputy Durkan. Has Deputy Durkan already spoken?
I am sorry. Then we are wrong. I call Deputy Paul Murphy. I did not realise. Deputy Bannon is in the same slot as Deputy Durkan.
Deputy Healy Rae is getting five minutes of my time so I will have ten minutes.
I will call Deputy Paul Murphy and then Deputy Healy Rae. Deputy Murphy is getting 15 minutes.
That is perfect. I may not take the full 15 minutes. The first point I wish to make is on the incredible method the Government has chosen to debate this extremely important issue. The so-called democratic revolution is now so covered with dust that no one could possibly see it. This is a most cynical attempt to rush through the full and complete privatisation of Aer Lingus. We had a Government decision on Tuesday night, following stonewalling during Leaders' Questions earlier that day, and the whole thing is to be done and dusted by mid-afternoon today.
It is patently a transparent and cynical attempt to get the sale through before the pressure mounts, on the Labour Party Deputies, in particular. One also has to raise the question of its timing and relationship to the successful and marvellous referendum result at the weekend. The Labour Party thinks it has got a boost from it and now has some political capital that it feels able to quickly rush this deal through on the back of it. Seven of the so-called "Aer Lingus Eight" in the Labour Party dissolved when faced with what was just a repetition of the same empty guarantees, the same empty promises and non-existent vetos. This is just an attempt to prevent the pressure from building up on them to vote in line with their promises and what is meant to be their political position, rather than with Fine Gael and the neoliberal position driving to full privatisation.
The guarantees, promises and commitments mean nothing - they are worthless. The Aer Lingus workers and pensioners will not need to be convinced of this, having had multiple examples of the same thing in their own history such as the related case of the Team Aer Lingus workers, whose company was privatised in 1997 and handed over to SR Technics, a profitable business, only to be closed with 1,300 jobs lost in 2013 and moved to Zurich where more profits could be made. There has also been a sell-out of Aer Lingus pensioners, a collection of workers who are used to being sold out. In this case, the Government is not even selling them out for 30 pieces of silver - it is effectively getting nothing. It is entering into a sale at a knock-down price. A company with cash reserves and Heathrow Airiport slots, with a combined value of approximately €1.5 billion, is being sold off for €1.4 billion. The taxpayer will receive slightly more than €300 million of this, which is a drop in the ocean in terms of the Government's finances and all that is being given up, while the executives between them will receive an estimated €30 million. No wonder they are in favour of and advocating the sale.
The embarrassing reality for the Government is exposed by the Nyras report which indicates that the logic of privatisation is a race to the bottom in competition with other companies. It includes a mention of the need for €60 million worth of cuts in order to be competitive. It recommends cutting jobs among pilots and cabin crew by 10% and among catering staff by 25%, brutal cuts, but that is what will follow when IAG assumes ownership. The fact that Aer Lingus is compared to Easyjet and Vueling is an indication of precisely how the logic of the race to the bottom works - it only pushes downwards.
Now that we have the report, if the Government had any shame, it would delay the vote until everybody had sight of it and its implications could be digested. It will not do this because it does not have any shame. We should not be surprised by what is contained in the report. IAG is made up of shareholders such as Blackrock, the world's largest asset management company, and hedge funds such as Lansdowne Partners which are only interested in profit. They are not interested in connectivity, jobs or the conditions of those at work. They are only interested in shareholder value, which means short-term profitability and whatever they need to do to get it. This is not an abstract debate about what might happen if IAG were to take over a major national airline. We only have to look at the example of Iberia where the same thing happened and 4,500 jobs were lost - the equivalent of between 1,000 and 1,200 jobs in Aer Lingus.
The Government, including the Tánaiste during Leaders' Questions, has made a lot of the B share. It has used the word "veto" repeatedly and stated the share will give the State the right to veto the sale of the slots at any future stage. That is on extremely shaky territory and I do not think the B share will be worth the paper on which it is written. There is extensive European Court of Justice case law dealing with the question of golden shares, including the sale of airlines such as British Airways. In general, the European Court of Justice has ruled against golden shares, stating they threaten the free movement of capital. If it came before the court, it is likely that the same ruling would be made. Government Deputies do not have to believe me about this; they can believe the Deputy Pat Rabbitte of old. To be precise, when dealing with the privatisation of 75% of Aer Lingus under Fianna Fáil in April 2006, he said:
The second deception relates to the pretence that the Minister for Transport is retaining a golden share. The Minister and the Taoiseach know the European Court of Justice rejected as illegal the ownership of a minority golden share which would protect strategic interests. In the case of the UK Government’s golden share in the airport operator, BAA, it was ruled illegal under EU law in May 2003. The golden share had special voting rights attached to it and sought to give Ministers the final say in major decisions such as selling the airport. The European Court of Justice ruled on this matter that it is illegal to use the golden share for protection of strategic interests. The Taoiseach is so confident about the decision made, but it is a surprise to most people that the Progressive Democrats has pushed Fianna Fáil so far to the right that it would be unthinkable even a decade ago that Fianna Fáil would have sold off the national airline in a country that has the strategic requirements of an island nation.
That is damning. It is damning of the argument of the Government about the B share and means that the Labour Party knows full well that it is entirely worthless and there is not the veto about which they speak. It also knows that even if the European Court of Justice were to state formally that we could use the argument to say Aer Lingus has to hold onto it for the protection of a strategic interest, there is nothing a future Government could do to prevent the slots from being leased to a subsidiary of IAG. It is also damning in terms of the Labour Party. It would have been unthinkable, even a decade ago when Deputy Pat Rabbitte was speaking, that the Labour Party would have completed the sell-off of the national airline in a country that had the strategic requirements of an island nation. Unfortunately, it would not have been so unthinkable because the road the Labour Party had travelled to the right towards the embrace of neoliberalism was quite clear at that stage.
The essential excuse of the Labour Party is that 75% is gone and 25% is somewhat worthless and we may as well go the whole way. It is the same logic used by somebody who beats someone to within a few inches of his or her life and then justifies killing him or her because he or she was nearly dead. It does not hold any water to say that, because Fianna Fáil got rid of 75% of the airline, we have no choice but to get rid of the rest of it.
The Labour Party seems determined not just to dig its own grave but aslo to climb into it by going along with this right-wing agenda of privatisation while dressing it up, as the Tánaiste did, as being somehow to do with the interests of consumers. It is the same right-wing Thatcherite logic that says only private business can provide for consumers, whereas state ownership is always inefficient. Those trade unions which still fund the Labour Party with their members' money in order to put the boot into their own members' interests should draw the conclusions of this. They should read the writing on the wall and follow through on the the words of Mr. Jack O'Connor of SIPTU by withdrawing funding from and support for a Labour Party which is determined to act against the interests of working people and the tradition on which it was built.
What is the alternative? The argument put forward is that there are two options. We can retain 25%, which is worth something but is not a decisive stake in the company as Aer Lingus is now run as a private company on a for-profit basis, or we can get rid of the 25% and have the company consolidated into IAG. There is, however, a third option which was well expressed by Mr. Paul Sweeney of TASC, the financial adviser of the trade union group within Aer Lingus. If, in 2006, the Labour Party was opposed to the sell-off of 75% and the loss of a majority stake, it should reverse the process and strive to at least have an ownership figure of 50.1% by buying up the Ryanair shares, ultimately leading us back to full public ownership of Aer Lingus.
That is the real choice. The first choice involves Aer Lingus becoming a minor subsidiary of a huge multinational corporation driven by short-term shareholder value, that is, short-term profits, and the State losing out in terms of jobs, connectivity and the strategic interests of the Irish economy as a whole. The other choice is public ownership. With public ownership, one can bring the workers to the fore in decision-making in the company, in addition to the interests of the passengers on Aer Lingus flights. Most important, one could bring the strategic, long-term interests of the economy and society as a whole to the fore. Otherwise, it is just a game of short-term profit-making. The shareholders of IAG have no interest in or concern for the long-term strategic interests of Ireland in terms of investment and everything else. The only way to guarantee these is to return to full public and democratic ownership of Aer Lingus.
I thank Deputy Murphy and the Technical Group for allowing me some of their time to speak on this important matter. The Government has handled this issue very badly. I am totally against the sale of this State asset. The Government had an opportunity today to act by accepting Deputy Dooley's proposal to defer the vote on this matter. The deal is being rushed. It is too serious to begin talking about it on Tuesday and rush a vote on it this evening before the House rises. It is a mistake. It is a serious matter that could have very long-term implications for Ireland, the workers and the future of travel to and from the country. To ask Deputies to discuss and vote on the issue within a couple of days without being in possession of all the facts on what exactly is on the table is wrong. As with other Deputies, I believe this has more to do with the Labour Party and the way the Government is holding together than anything else. The Minister is not doing the country a good service by rushing the vote on the sale of this very valuable State asset.
Let me return to a point already made by Deputy Paul Murphy on what exactly is being got for the sale. In the future, people will look back and ask what was wrong with the current Government to make it sell its share in the airline for the sum of money in question. I believe this question will be asked in the future, if not now.
With regard to the way in which the deal will affect the workers in the future, reports suggest that maintenance will be outsourced outside this country. How much money will we lose if such actions are to take place? We are trying at all times to keep work in this country for the people who are born and bred here. We want to keep our own people working ahead of anybody else and do not see anything wrong with saying that. The sale of this asset will not help in this regard.
I am worried about the implications for jobs, business and tourism. Aer Lingus served us well over the years. It is our flagship carrier and we are all so proud of it. In 1979, for instance, the Pope was brought to Ireland on an Aer Lingus flight. The Irish soccer team was brought home by Aer Lingus. We were all proud on those occasions. To lose the State's stake in our national airline is wrong.
Everybody will have suggestions about what should be done with the small amount of money to be derived from the sale. If the Government is to get its way and rush through this sale, the money should be used to build, as a matter of urgency, our new children's hospital in the interest of looking after sick young children. If the Government wants to put money to good purpose, that would be a good one to put some of it towards. People would certainly appreciate that.
Let me refer to our small regional airports, such as Kerry Airport, and to connectivity and the importance of having regional airports. They provide a great service and have affordable flights. I, too, acknowledge the work of Michael O'Leary and Ryanair over many years in reducing the cost of air travel. Mr. O'Leary, his colleagues and those who work for them deserve great credit for building up a great business over the years. That people can fly affordably is in no small way due to Michael O'Leary and Ryanair. This must be acknowledged in the House. We often hear Deputies criticising people who do well for themselves in business but I hold the opposite view. I like to acknowledge the contribution businesspeople make to society, the wealth and work they create, and the service they give. It is not right for politicians to knock continuously some of the bigger players in this country. I do not agree with their doing so. If we had more such bigger players, the country might not be in the state it is in.
Again, I thank the Technical Group for allowing me some of its time.
I welcome the opportunity to say a few words on the proposal to sell the State's remaining minority shareholding in Aer Lingus. I listened earlier to Deputy Dooley's contribution. It is interesting to note that not a single member of either of the two main Opposition parties in the House is present for this debate. Deputy Dooley made an observation on the strength of the Aer Lingus balance sheet and the company's current economic status. He said the company was in a position to weather any potential storm. This was an unusual statement because the industry, by its nature, is subject to economic cycles. It may well be on an upward trajectory at present but we do not need to cast our minds back too far to recall the consequences for the aviation industry globally of the economic crash in 2008 or the crash of 11 September 2001. Just because we are currently in growth mode and fuel prices are relatively low does not mean the trend is likely to last forever.
We need to be conscious of the fact that the global trend in the aviation industry is for mergers or closer co-operation between various stand-alone brands. In a way, that is what the IAG offer is about. It allows for the ability of Aer Lingus to continue with its own management, operations and clearly well-established management team. I have had the privilege of meeting some members of that team in recent days and I was quite impressed by them.
To quote S. H. Payer, "the moment of absolute certainty never arrives" with regard to making a decision of this nature. However, on the balance of probability, this is probably the right decision and the right time to make it. Strange bedfellows are thrown up by this debate. For example, Independent Newspapers is facilitating Deputy Clare Daly with an op-ed in today's Irish Independent. The question that really needs to be asked of Deputy Daly and others who oppose this deal is whether they can be certain that over the next seven years, the connectivity secured under the present arrangement can be guaranteed by Aer Lingus on a stand-alone basis. Can they be certain that the disposal of the slots, in respect of which the agreement has legally binding guarantees, could never be contemplated by Aer Lingus as it stands?
Given the fact that the shareholder register of Aer Lingus will inevitably change because of the court decision in the UK that Ryanair must divest itself of at least 25% of its 30% shareholding, can Deputy Daly and others be sure that in the event of that shareholding being made available to the market, it would not be acquired by somebody who would not be as favourably disposed towards the issues that were clearly raised in the context of the original IAG offer in so far as we have secured arrangements around that?
People say this is rushed. When this came out of the blue last December, critical issues such as connectivity, regional development, job security and the slots were raised. Almost six months later, substantial progress has been made in respect of those issues. If the Government was trying to sell the minority shareholding in Aer Lingus against the wishes of its management and board; the chambers of commerce in Limerick, Shannon, Cork and Dublin; and very significant economic commentators, we would rightly stand back and ask whether we were doing the right thing. However, when all these people are on board, we must question whether the opposition to this deal is naked political opportunism, primarily from a party that originally sold the 75% shareholding in Aer Lingus.
I think that on balance, it is the right thing to sell the shareholding and it is the right time to do it. Insofar as we can be sure of anything, we have secured guarantees about connectivity, the slots and job security. The motives of those who oppose this deal for what appears to be nothing more than naked political opportunism dressed up as concern for the national interest or employees who have given great service to the national carrier will be seen for what they are. I commend the Minister for the patience and diligence with which he went about dealing with a particularly difficult issue.
I am happy to have the opportunity to speak on this very important topic for the country. It is worth restating that the State only owns 25% of Aer Lingus. This leaves us with a minority shareholding with little control over the activities of the company. The 25% shareholding is the only thing we are selling. To put that 25% shareholding in context, much of the debate has been about the Heathrow slots. Our 25% shareholding alone does not control those slots. We would need to persuade another 5% of the ownership to support us in any attempt to protect the Heathrow slots. We are not making a decision on the entire airline. That decision was made by Fianna Fáil when it sold 75% in 2006 and privatised Aer Lingus.
It is also accepted by most commentators that the existing ownership structures of Aer Lingus are not sustainable or practical in the long term so changes are inevitable. Ryanair must sell 25 % of its 30% stake due to a recent court ruling. Etihad has signalled its intention to sell its 5% stake. This shows that the ownership structure was going to change anyway. It is much better that this be done on our terms where we can leverage the best possible deal rather than a potential hostile takeover occurring or a deal being done at a time when the aviation industry is in a worse position and Aer Lingus might not be in as strong a position as it is at present. I am cognisant of the fact that the aviation sector is very cyclical. Given these circumstances, the Minister and the Government sought to achieve the best deal they could in agreeing to sell a 25% minority stake in an international airline. I believe they have done a good job and I commend the Minister for his work since the initial bid came in.
Aer Lingus management and staff have done a great job in recent years in turning the company around and making it successful. This has made it an attractive investment proposition for an international group like IAG. The aviation industry is notoriously volatile, cyclical and ever-evolving and this opportunity may not be available to the company in the future. All it takes is another ash cloud, oil price fluctuation or terrorist threat to turn the cycle. The progress that has been made from the initial bid should be noted when we look at the benefits of the deal. It includes real guarantees and will bring huge benefits to Ireland in terms of jobs and connectivity. There is potential for growth and development at Dublin, Cork and Shannon. The deal will see new routes added which benefit all citizens and regions.
Stephen Kavanagh has confirmed that Aer Lingus with IAG want to grow direct employment. A total of 150 net new jobs will be created by 2016 and 635 jobs will be created by 2020. IAG also expects that new indirect jobs are likely to be created in the airport and airline support activities as well in the tourism sector. Aer Lingus staff are synonymous with the company and its exemplary image. Anybody who has been aware for a while knows that it is lovely to get on that Aer Lingus flight on the way back home and see the friendly smile and familiar accent. Therefore, I am particularly pleased that IAG has confirmed that the existing employment rights of Aer Lingus employees will be safeguarded fully and that there will be no compulsory redundancies.
The Government has secured a number of legally binding connectivity commitments in the offer. The commitment that the Heathrow slots will continue to be held by Aer Lingus indefinitely and the commitment to retain current schedule frequencies between Heathrow and Dublin, Cork and Shannon for seven years post-acquisition is very positive. It will allow the airports the certainty to build on them. Those commitments do not exist at the moment so we have seven years during which commitments that do not exist at the moment will apply.
We must look at the possibilities and not just the negative elements. We could see a situation with investment and development, Dublin could become a hub in itself. We spend all the time talking about the slots at Heathrow and how Heathrow is such a key hub but we have pre-clearance in Dublin and Shannon for access to the US. This leaves us in a very strong position to grow our transatlantic trade. I do not see why Dublin Airport and even our regional airports cannot look to be hubs themselves, rival Heathrow in some ways and grow our tourism and business interests.
Other commitments that have been secured also improve on our current situation. Securing the Aer Lingus name and head office in Ireland is very important. The creation of the new "B" share will give control over these commitments and subject to the approval of Aer Lingus shareholders, they will be enshrined in the articles of association of the company. IAG believes that together with Aer Lingus, it could deliver 2.4 million more passengers, four additional destinations in North America and eight additional aircraft for its fleet. These new transatlantic services could be added by summer 2016. This will have a really direct impact on the country.
Ultimately, many of the speeches in this House referred to an Aer Lingus that no longer exists, an Aer Lingus that was in full State ownership. This is no longer the case. I have heard speeches that praised Ryanair and Michael O'Leary for what he has done. I would ask those who are opposed to this deal whether they believe the growth of Ryanair and the activities of Michael O'Leary would have been possible under State ownership or with State intervention - something that possibly stifled Aer Lingus in the past. Considering all the factors before us, including the potential for growth that the current ownership structure does not provide, this deal is in the best interests of the country and I commend the Minister for his work on it to date.
I am glad to be able to contribute to this debate. I commend the Minister for all the hard work he has done in this area. I will speak as a Deputy who represents Limerick city and the mid-west and in that context, Shannon Airport. Shannon Airport has been a vital driver of economic growth in the region for a long period of time. To put it in context, a person could fly from Shannon to Heathrow with Aer Lingus for the past 50 years.
This new improved offer from IAG brings about certainty for Shannon Airport, the mid-west and Limerick in two main areas. For the first time, we are getting a guarantee that the Heathrow slots and, more particularly, the daily flights from Shannon to Heathrow will be kept and will not be diminished over the next seven years. This is to be welcomed. There is a commitment from IAG in this improved bid that it will look to maintain and grow the transatlantic routes that currently operate out of Shannon, namely, those to Boston and New York. I very much welcome this. In respect of Aer Lingus workers based on Shannon, I recognise that Aer Lingus has stated today that there will be no compulsory redundancies and I welcome this. We should be looking to grow the numbers at Shannon and other airports.
Before I speak specifically about Shannon Airport, I would like to welcome the fact that the Aer Lingus brand is being retained because it is synonymous with Ireland. The airline flies the shamrock which is a hugely important ambassador for the country all over the world.
In terms of the impact of this offer for Shannon Airport, it brings certainty on the Heathrow and transatlantic routes, both of which are extremely important to the airport. Connectivity through Heathrow and the year-round direct connectivity to Boston and New York are hugely important because we have a very large multinational base in the mid-west and along the western seaboard. One of the key reasons for that is the connectivity at Shannon Airport, as various employers have testified, including Regeneron in Limerick. Representatives of that company are on record as saying that one of the key reasons the company located in Limerick was the direct connectivity on the north Atlantic routes. Viagogo, a relatively new company which set up in Castletroy, has stated that it chose Castletroy because of the connectivity to Heathrow at Shannon Airport. When we boil it down to economics, the connectivity in the mid-west through Shannon Airport equals jobs.
One of the key successes of this Government in recent times has been its decision to make Shannon Airport independent. The airport has thrived across a range of areas since gaining independence. In the last year alone we have seen 17% growth in passenger numbers. Anyone who drives by Shannon Airport will be heartened to see that the car parks are full and that the nearby hotels are doing well, which are very positive signs. When IAG first announced its bid, I was eager to ensure that nothing was done that would undermine the success, to date, of Shannon Airport. The Heathrow slots were a key issue and we now have a seven year guarantee in that regard, which I very much welcome. That will encourage businesses to locate in the region and enable those already based there to know that direct connectivity is guaranteed with the flights that are currently in place for the next seven years at least and, no doubt, long beyond that.
Shannon Airport has significant capacity, with one of the longest runways in Europe. It has enormous capacity to grow further and a key element of that is the transatlantic routes. Apart from Aer Lingus there are other airlines operating transatlantic flights into and out of Shannon Airport although Aer Lingus is very much the flag carrier in that regard. We have seen the return of year-round schedules recently which shows how successful the airport has been. Those looking at Shannon Airport from the outside often miss the fact that it is boxing way above its weight. The airport is a key ingredient for economic development and tourism in the region. It brings tourists into the region all year round, but particularly in the summer period. It also brings key business executives to businesses based all along the western seaboard, from Sligo all the way down to Kerry. We are continually talking about balanced regional development and having an international airport functioning along the western seaboard ensures that we have a strong counterpoint to the eastern region and Dublin in particular. I am not taking from the great work that is happening in Dublin but we must have balanced regional development and Shannon Airport is key in that regard.
As with everything, we must look at the positives. In the context of this deal, the positives include the seven year guarantee on the Heathrow slots and the promised growth in transatlantic traffic and I take the word of IAG on the latter. The Shannon Airport Authority has a new board and new management in place who are doing a fantastic job and they are very supportive of this deal. Their track record speaks for itself. As a public representative based in the mid-west, I would like to see the details of IAG's growth targets and plans for the transatlantic routes out of Shannon Airport. I have no doubt that the Minister will be speaking to Willie Walsh at some stage in the near future and I would urge him to pass on the message that he should not be afraid to send passengers into Shannon Airport for onward transatlantic travel. The airport has the capacity, structures and staff in place to deal with additional passengers and it operates very efficiently. Anyone who has used Shannon Airport will testify that it is very easy to get around it and that parking there is relatively easy. The airport now has full pre-clearance for the United States which is hugely significant. IAG is using the pre-clearance facility for British Airways executive flights, which is very welcome.
Shannon Airport is hugely important to the surrounding region. Many of the staff who work at the airport live in Limerick city. The airport is an integral part of the economic fabric of the mid-west. The fact that it has become independent and has been successful is testament to the policy focus of this Government which is based on enabling regions to develop for themselves. The mid-west, western seaboard and Limerick bring an international dimension to economic development. Companies from all over North America are based in the region, as are many European companies which use the Heathrow routes at Shannon Airport. There is also enormous connectivity to the Asian markets in the mid-west region.
I welcome this measure and am fully supportive of it. It brings certainty to Shannon Airport with regard to the Heathrow slots for seven years, as well as assurances with regard to growth in transatlantic routes. I look forward to seeing IAG's plans in that regard; it has made a public commitment to grow transatlantic traffic. I also welcome its strategic alliance with American Airlines. I would like to see the details of the company's plan, including the period of time involved and the number of passengers it hopes to put through Shannon Airport. I am confident that we will continue to see success at Shannon Airport and in the region more generally and that a rising tide will lift all boats. I cannot overstate the importance of Shannon Airport to Limerick and the entire mid-west region. I welcome this measure and look forward to seeing how IAG and Aer Lingus will improve the potential of Shannon Airport.
I am delighted to have the opportunity to speak on this motion. This issue is very important and we must have a proper debate on all aspects of the sale of the State's share in Aer Lingus. Aer Lingus is our national airline and most Irish people had their first flight on an Aer Lingus plane. I had mine in the 1980s when I flew to the United States of America on one of the old 747s out of Shannon Airport. We all remember the advertising slogan, "Look up, it's Aer Lingus" and everyone would like that to continue. I wish to compliment the staff who have worked for Aer Lingus over the years. They have always been friendly and proud to work for our national carrier. The Aer Lingus emblem was the first thing that many people saw when they came to our country many years ago because it was the only airline that flew in and out of Ireland.
I do not know why we have to railroad this decision through and vote on it today. We need a fuller debate on the sale of the airline. There has been no committee debate on this issue. The prospect of a sale has been in the public domain since December, when Willie Walsh made his initial offer but Willie Walsh will not always be with IAG. What will happen in seven years' time if there is a new chief executive at IAG? Will the guarantees with regard to Aer Lingus still stand?
Stobart Air operates under the Aer Lingus Regional brand. It started off in Galway as a small airline servicing the Aran Islands. Pádraig Ó Céidigh took it over and built it up as Aer Arann with flights between Ireland and the United Kingdom. More than 400 people work in Stobart Air and this is proposed to increase to possibly 500 people. What commitment has been given to them? What job security do those who work in Aer Lingus Regional and Stobart Air have? Did the Minister have any discussions with Stobart Air on the implications of this sale on Aer Lingus Regional? Stobart Air relies 100% technically on Aer Lingus. It provides a great service regionally between Ireland and Britain. When Mr. Noel Dempsey was Minister for Transport, I worked with him to get Aer Lingus to work with Aer Arann because it did not make economic sense to have a big jet taking off in Dublin and landing in Manchester or Liverpool. It was better to use turboprop aircraft.
Has the Minister had any discussions with Stobart Air? Has any commitment been given to Aer Lingus Regional over the 400 jobs? What is to prevent Mr. Willie Walsh in two or three years time downsizing Aer Lingus to provide a regional service? He can do that because with the jobs commitment he has given to Aer Lingus he has to keep people employed there. In his reply I would like the Minister to outline to the House the guarantees that have been given to the employees of Aer Lingus Regional. Can the same guarantees that have been given to Aer Lingus staff be given to the staff of Aer Lingus Regional? Those 400 employees of a small regional airline are very concerned about what is happening. No one has mentioned this in the past two days of debate in the House. I raise the matter because the airline started in my constituency. Before the debate finishes, I would like a commitment from the Minister that there will be job security for the staff at Stobart Air.
I will be voting against the motion this evening simply because we are not having a proper debate on it. It is a huge issue to sell our national carrier. We are an island nation. Aer Lingus has done exceptionally well over the years, through recessions and wars. It has provided a great service and it is an airline that will survive. The IAG takeover comes down to one issue, which is to get at the Heathrow slots for the long-haul flights to Australia and Asia. That is the motive behind it.
In his reply I ask the Minister to give some sort of comfort to the 400 staff in Aer Lingus Regional, the vast majority of whom are based in Ireland. It flies out of Shannon and Dublin airports. It is important to give a commitment to the employees of Stobart Air and give them the same guarantees that have been given to Aer Lingus employees.
I do not agree with much of what Deputy Noel Grealish has said, but I am in complete agreement about the contempt that has been shown to the House in how this matter has been handled over the past couple of days. It is unfortunate that there is no opportunity to engage in a proper and full question and answer session with the Minister. The matter should go to the Joint Committee on Transport and Communications.
I never enjoy the nonsense that goes on here about Dáil sitting days and whether we should sit. However, I find it hard to understand why we are not sitting next week. I do not believe it would cause anybody too much concern if we were to sit in order that this matter could receive proper and full attention by the Joint Committee on Transport and Communications if only to provide comfort and answer some of the questions that have been legitimately raised by a number of Deputies. This is yet another example of how the Government is deliberately downplaying and reducing the impact and relevance of this House, the elected Chamber of Deputies, which is unfortunate particularly given that the Government has such a large majority.
Having said that, I wholeheartedly favour the sale of the Government's 25% stake in Aer Lingus. I do not believe nostalgia is a substitute for good business decisions. In recent months I have heard a considerable amount of misty-eyed tales about flying transatlantic, the green uniforms and so on. We live in a globalised economy and we live in the real world. Aer Lingus is not the largest carrier in this island, that fall to Ryanair. Ryanair has a business model that thrives on competition and on offering choice to consumers. Ryanair has singlehandedly transformed the opportunities for Irish customers. It has made air transport accessible to people who otherwise would not be able to afford it. It has opened up the world to Irish citizens. It means that the many tens of thousands of Irish emigrants who live in other parts of Europe and the world are able to afford to travel to come home to see their families and their families are able to travel to see them. Competition is to be welcomed and we do not have anything to fear.
We must remember that we are not discussing the privatisation of Aer Lingus. That happened in 2006 when it was floated on the stock market. The Government's 25% shareholding is quite meaningless and the days of Ministers dictating commercial policy to the board of Aer Lingus are rightly over. It is not the business of the Government to dictate to an airline company.
As a nation we need to prioritise securing the future of Aer Lingus and the future of air travel for our citizens. In the debate so far there has been an absence of concern for Irish air travel customers. The focus of the debate, certainly from the Government benches has been far more about protecting the electoral concerns of certain, primarily Labour Party, Deputies, rather than discussing the best interest of the State and its citizens. That is unfortunate. Aer Lingus should not be the plaything of parties that are concerned about their potential performance or otherwise in the next general election. It is misguided and misses the point of what this is all about. Certain Government Deputies have not showered themselves in glory in recent weeks and months.
This represents a reality check for us. We live in a global economy in which cumbersome state companies that do not evolve and are resistant to change fail because there is always a more nimble, efficient and dynamic alternative ready to replace them. We have already seen that with Ryanair. The risk is that if Aer Lingus refuses or is not allowed to evolve, adapt, compete and modernise in order to secure its future, it will be under severe threat in the future.
Concerns that IAG has some kind of mischievous goal to somehow reduce or downgrade Aer Lingus are nonsensical. It wants to purchase Aer Lingus because it is a viable company that has huge potential to grow and with the right investment it can grow. However, it needs that investment and that is where IAG comes in. Given that IAG is a major player, it can invest in aircraft and open up new routes. That is good for Ireland. It is good for Aer Lingus. It is good for Irish consumers. It is good for Irish air traffic customers. It is good for everybody concerned. It is good for the people who work in Aer Lingus and for the people who want to work in Aer Lingus in the future.
It makes sense. IAG has the resources to invest in stock and aircraft to which Aer Lingus otherwise would not have access. Companies that cannot invest and renew die. IAG has access to strategic alliances with other airlines across the world, something Aer Lingus has not had. As a customer of Aer Lingus, I find it frustrating that it does not have partnerships and alliances with airlines in other parts of the world. Alliances open up new opportunities, opportunities that should be embraced rather than resisted or rejected.
The only question that we, as parliamentarians, should be asking is: what is best for Ireland? What is best for Aer Lingus, as a company, to help it to innovate and grow and be dynamic in order that it can secure its future? What is best for Irish customers? The many people who lined up in the past to resist Ryanair and reduce its influence because they believed it would threaten Aer Lingus and so on have been proved wrong. Ryanair is the best thing that has happened to Irish aviation. We need to learn from the lessons of the past. We need to open our eyes to what is happening in the global economy and the global aviation sector and embrace it. I will be voting in favour of the motion, notwithstanding my genuine annoyance at how the Government has handled the matter.
The document relating to the motion on which we will be voting later this evening contains an outline of principles set out over two pages. To use an appropriate metaphor, Members are alerted to the announcement of the Order of Business by the ringing of a bell, which is similar to what happens at an airport when information on a flight is being announced. The boarding gate for flight IAG 999 is due to close at 4.42 p.m. today, but we have not packed properly.
The Government's minority shareholding - 25%, at a price of €2.50 per share - amounts to €335 million, which is a better price than the price per share obtained in respect of the 75% shareholding sold some years ago. The opportunity should have been taken to have the pensioners who built the company to what it is today exit fairly for their lifetime's work. The Minister should revisit that price and add, at least, a €150 million infusion into the pension fund. Ryanair would support this because of its potential exposure should the pension wound in respect of the deferred pensioners of Aer Lingus be reopened and it knows this. The Government has leverage with the proposed buyers. The saving of €40 million to €60 million per year in costs, as set out in the Nyras report, in the context of a ten year view, represents a figure of between €400 million and €600 million in super-expectation capital for the buyers. That is why, at a minimum, the Government owes it to the people who built the airline and presented it in its present form to do what is right and fair. For the Government which has the largest ever majority in the history of the State to bring this proposal before the House without considering this issue is pretty limp. It is gutless and not right.
The document before us should have been presented on the basis of E&OE, errors and omissions excepted. The shortest sentence in the document is: "The offer price is a cash payment of at least €2.50 per Aer Lingus share", which is shamefully raw and bald. Of course, the buyers would be prepared to pay an extra €150 million which is only 10% above the overall price to all shareholders. As stated yesterday by Deputy Sean Fleming, Aer Lingus is owned by a composite of Irish residents, Ryanair, the pilots' pension fund and the State. As the shareholding amounts to 60%, there is great cohesive negotiating strength, as IAG knows.
There is a propensity among Departments, ministerial offices and Cabinets to go around in circles, talking in hypothetical rather than business terms. The buyers will assuredly digest another €150 million. Did the Minister put forward as an opening requirement that the pension fund be uplifted by not less than €150 million? Had he done so, everything that would have followed would have been meaningful. One cannot move forward from the unresolved legacy issues, that are an open sore to past employees and their families, without tidying up the past. The potential buyers know this, too.
Those backbenchers who will be required to put on blindfolds and insert their ear plugs when the boarding gate closes at 4.42 p.m. will have missed the opportunity to board with safety on an airline which Deputy Lucinda Creighton fairly described as requiring the resources of a wider network of allegiances and alliances to deliver to the people the air transport service needed into and out of Ireland. Into the future, the aircraft will mostly be landing and staying in Dublin and other places and the staff will be largely Irish. As possession is nine-tenths of the law, we will be able to bring forward whatever regulations and legislation is required to keep it safe. If the Government does not roll up its sleeves, put its shoulders back and, with some steel in its spine, try to right the wrong of the pension raid on past employees and current and deferred pensioners, it will have done a dark day's business. The 166 Members of this House should not allow that to happen. IAG would respect us for it and would pay the price which would be only 10% of the overall price.
I welcome the opportunity to speak to the motion. When the initial offer from IAG was made in January, it was deemed unacceptable to the Government. Acting with my Labour Party colleagues, I played a key role in ensuring the initial offer which was bad was not accepted. From the very beginning, we have been criticised from all sides, including right-wing media commentators for being parish pump politicians only interested in grandstanding and seat-saving gestures and the far left for not folding the tent of the Government and calling an election on the grounds of State assets. Unfortunately, we do not have the luxury of being able to act in a space without consequences.
Once a bid was made for Aer Lingus, we had to respond in the world as it was, not the world those in Sinn Féin or the far left pretended it was. Unlike the ESB and Ervia, Aer Lingus is not a commercial semi-State company. It is a private company with shareholders, of which the State is one. The company has always been subject to a takeover bid. We saw such a bid previously from the low cost airline Ryanair and this bid has come from IAG.
The Opposition would have the public believe a dismissal of any offer, on the grounds that the State's 25% share is not for sale, would have no effect on the company at all. That is simply not true. If we had dismissed the bid on the grounds of well meaning ideology, that in this case the Government's stake in a private company was not for sale, there would have been consequences. The company's value is set by the market's view of how much the company is worth. If a company is not for sale, in essence, its value will plummet. These are not rules created by the Labour Party. Unfortunately, that is the reality in the world in which we all live and no amount of roaring or screaming to the contrary will change it. Therefore, it was not an option to dismiss the offer out of hand. If the company's value had plummeted, the company would have been vulnerable to further cost saving measures.
The leader of Fianna Fáil in the Seanad said Labour Party Deputies, including me, had said, "we would not sell under any circumstances". That was never our position. We never said anything of the sort. Our position was that should a sale take place, certain conditions would have to be met, concerning connectivity, independent valuation, workers' terms and conditions and a plan for the regions. This was included in our motion at our party conference and is a matter of record. The misquoting is another example of what we have gone through in the past four years, in being pulled between the left, the right and populist and enduring criticism of our attempts to do the right thing to get the country back on track and create jobs.
By the end of next year, IAG expects to create approximately 150 net new jobs in Aer Lingus. By 2020 the plan is to have created 635 high quality jobs, including pilots, cabin crew and engineers. This takes into account the approximate 50 job losses as a result of the takeover, none of which will be compulsory. There are up to 487 applications in the pipeline for voluntary severance packages. It is also important to note that all of the airports have come out strongly in favour of the takeover, including Shannon and Cork. The regions are happy with it. Unlike the Opposition, politicians in the regions see potential in the deal to achieve further growth in terms of job creation and tourism, which is welcome. The Opposition is stoking up fear, among the workers in particular, that the deal is a Trojan horse which will serve to bring a great airline into ruin.
The company has committed to entering into registered employment agreements under the framework enshrined in the Industrial Relations Bill 2015, as introduced by the Minister of State, Deputy Gerald Nash, to protect the terms and conditions of Aer Lingus employees. Does any of us have a crystal ball through which we can gaze into the future? No, we do not. We all need to act on the best advice and information we have available at a particular time. As I mentioned, taking the option to reject any offer out of hand would have had a detrimental impact on the company. What would happen if the offer was rejected and followed by a hostile offer down the road? If an offer had not been accepted, it would have offered no surety on the employees' terms of employment, connectivity or a plan for the regions.
It has been said before and is worth restating, Aer Lingus is a private company, having been privatised by Fianna Fáil. The State's share was retained solely to ensure guarantees in respect of connectivity and the Heathrow Airport slots. We have received that guarantee in the making of this offer. The Minister for Finance will have the ability to block any proposed disposal by Aer Lingus of any of its Heathrow Airport slots indefinitely. This provides stronger protection for the State than the current arrangement, under which the State cannot prevent a reallocation, reassignment or cessation of use of the Heathrow Airport slots. The Minister for Finance will also be able to block a proposal by Aer Lingus to change its company name, brand and head office location and place of incorporation from Ireland. This commitment is unlimited in time and provides protection that, again, is not available under the current arrangement.
Instead of using the proceeds of the sale to pay down debt, the Labour Party has ensured the proceeds from the sale will be reinvested, through the strategic investment fund, in transport and other connectivity projects only. Questions have been raised about proceeds from the sale being used for other purposes such as for IASS pensions. The Minister for Public Expenditure and Reform was clear that, legally, funds from the sale could only be used through the the strategic investment fund for specific connectivity purposes.
We acknowledge and share an emotional position from which one is reluctant to divest State ownership, but it would be very wounding if funds from divesting the State's share in Aer Lingus were used to write down Fianna Fáil's legacy debt. It is welcome that funds from the sale will be reinvested in much needed infrastructure. This infrastructure is sorely needed, owing to years of Fianna Fáil waste and over six years of budget deficits which have stifled our ability to grow and invest.
In summary, being in government is about making decisions and choices. In its time Fianna Fáil made poor decisions. Sinn Fein makes populist soundbites. Those on the far left never want to make a decision. We chose to go into government in the knowledge that we would be making tough decisions. This is one such decision. If we had accepted the initial offer, it would have been a bad decision for the airline and the country. If we had dismissed it out of hand, it would have been a populist gesture. Most populist decisions have consequences and these consequences would have had a negative impact on the company and its workforce. We had to make a decision. Our decision was not to sell to a vulture capital fund, which is what ultimately happened when Fianna Fáil privatised eircom. Neither did we roll out the red carpet to a low cost airline. We have considered an offer from one of the major players in the global airline industry, an industry which is going through a period of consolidation. Was it an easy decision? No, it was not. Are we certain everything will be rosy in the garden in the future? No, we are not. How could we? However, this is a good offer which has the potential to be of major benefit to Aer Lingus, the country, current Aer Lingus workers and the many new workers who will take up the high quality jobs that will come on stream.
I want to refer briefly to the dynamic of the debate in the past couple of days. I arrived quite late at a Labour Party briefing on Tuesday afternoon - it had started at 4.30 p.m. - to discuss what might be agreed at the resumed Cabinet meeting later. I looked at a letter from Mr. Stephen Kavanagh, CEO of Aer Lingus, to the Minister, Deputy Paschal Donohoe, which had been provided as evidence that the REA requirement included in our Labour Party conference motion had been delivered on. I stated immediately that it had not delivered on it and that the letter did not go far enough. It was woolly and not specific enough. It got into the public domain later on Tuesday. Our discussion on the matter continued into the evening.
An important phrase in the press release from me and my seven colleagues late on Tuesday largely went unnoticed, but it indicated that we had unfinished business in regard to REAs. That phrase read: "Between now and the formal completion of the sale, we will continue to work towards ensuring that the REAs deliver the best possible outcome for the workers involved". This was not just padding but a considered inclusion.
Work on that unfinished business resumed the next morning at a further scheduled briefing with the Minister and, importantly, Mr. Kavanagh who was questioned by a number of people about the meaning of the letter and what could be taken from its contents. I told him directly that a revised letter to the Labour Party chairman, Deputy Jack Wall, with more specific commitments around REAs would be required to secure all of the votes on the deal on Thursday. There was agreement that efforts would be made by the Minister of State, Deputy Gerald Nash, and Mr. Kavanagh in the time before the vote to come up with the revised letter requested.
I am happy to say the commitments given in the new letter from Mr. Kavanagh, negotiated and signed off on by the Minister of State last night on behalf of the Labour Party and the Government, address the REA element of the Labour Party conference motion. I understand unions at Aer Lingus recognise the progress made and I am now more comfortable with how I will cast my vote later today. I am quite certain that the improved offer from IAG is due in no small part to a group of back bench Labour Party Deputies working together in a focused way to secure the best possible deal to secure the future of Aer Lingus and its workforce in the interests of the country as a whole and the regions.
I want to read a paragraph from the letter we received from Mr. Kavanagh to the Minister of State which was copied to Deputy Jack Wall.
In the fourth paragraph he states:
I am also committed to the principle that Aer Lingus would not utilise compulsory redundancy or a movement to non-direct employment in a scenario where the changes and efficiencies that the business requires can be achieved through flexibility and mobility internally delivered by staff and their trade union representatives. We would now envisage engaging with the trade unions in this regard. This engagement would be designed to agree a formal approach to enshrine this principle and the method of its implementation in a collective agreement or agreements. The company is prepared to undertake to register these agreements under the terms of the enabling legislation.
That is a major move forward in terms of providing security of employment for the current workforce and new workers in the future.
I am glad to have the opportunity to state my position on this matter. I welcome the decision made by the Minister and the Government on the disposal of the minority shareholding of 25.1% because it has been made after careful consideration. It is in the best interests of the country, Aer Lingus, Aer Lingus employees and the economy as a whole.
It is interesting to note that no member of the two major Opposition parties and most of the Independents are not present for the debate, despite their protestations, grandstanding and turning this issue into a political football. Their negativity is appalling. This morning the acting leader of Fianna Fáil, Deputy Timmy Dooley, said he had been taken unawares by the unexpected decision announced on Tuesday evening. I found that amazing. In view of what is happening and the publicity this issue has generated in the media and the entire country in recent months, everybody was expecting that it would be brought to a conclusion. I compliment the Minister on bringing it to a conclusion without further delay. A decision was urgently needed because the longer it went on, the more likely it was it would have a negative impact on Aer Lingus and the air industry.
I compliment the Minister on making himself available for discussions. My colleagues in Renua Ireland may not be aware of this, but he was very disposed to meeting us and met us on numerous occasions to clarify and deal with issues raised. Of all Ministers, he briefed us extremely well on it.
I also welcome the decision as a rural Deputy for County Tipperary. One might wonder why we would be bothered about airports, but we are as concerned about connectivity as anybody else. Mr. Tony Ryan who founded Ryanair probably got inspiration from Thomas Davis, the editor of The Nation in the 1840s, who described Tipperary as the Premier County. He said this because "where Tipperary leads, Ireland follows." That is certainly the case in the aviation industry.
Now that the issue of the shareholding is out of the way - Ryanair spent a lot of time concentrating on putting pressure on Aer Lingus - Aer Lingus can get on with managing its core business. In the future some entrepreneur - there may be one in our midst - might set up another airline, now that Aer Lingus has been consolidated as part of a larger group. That larger group will afford an opportunity to provide much greater connectivity to Ireland and fly to many more cities, particularly in the United States and Europe. With pre-clearance facilities at Shannon Airport for travellers to the United States, many people from elsewhere in Europe will be able to fly to Shannon Airports and onwards to the United States where they will not face delays. The agreement which I welcome has tremendous potential.
Deputy Peter Mathews was concerned about the departure time of 3.45 p.m.
It is 4.45 p.m.
All I can say to the Deputy is that I hope he has his ticket and passport in order-----
The boarding gate will close at 4.45 p.m.
-----and that he will pass through security safely and without undue delay.
On flight IAG 999.
One of the benefits is that the Aer Lingus brand is being retained.
A sum of €150 million will solve it.
IAG intends to increase capacity by 50% for cargo. That will provide a great opportunity for airports such as Shannon which has the required capacity and facilities. This will certainly be of benefit to all of us in the mid-west, particularly in north Tipperary. I always take the view that the glass is half full, which is the case in this instance.
It is overflowing.
Opposition Members have valuable points to make. Change brings uncertainty, concern and, to an extent, fear to many, but the constant negativity from Opposition Members who see nothing positive in this deal is galling. A few years ago when they were in charge, the country was broke. They called in the IMF and we had to be bailed out within days. What would have happened to Aer Lingus at that stage? It would have been liquidated and we would have had no say in the matter, yet crocodile tears are being shed by the Opposition, including by Deputy Peter Mathews who said he was not afforded an opportunity to discuss the matter. I commend the Government on its actions and wish the Minister well.
Perhaps the reason the Chamber is half empty is other Members share my frustration. How many hours will we spend debating this issue today?
Yet we were told by the penultimate speaker that the deal had been signed off on by the Minister of State, Deputy Gerald Nash, last night. We are, therefore, spending seven hours debating something that was agreed last night when hands were shook - it was deal done. I want to ask the Minister one question before I continue my contribution. Can I or anybody else on these benches say anything that will change the deal struck last night?
To improve it-----
-----or are we wasting our time?
Perhaps that is the reason the Chamber is empty.
Having expressed my frustration I will be a tad cynical and say I am surprised the Government did not launch this as a new initiative to reduce youth emigration. In many ways that would be an ingenious scheme. I am surprised the Government would not have enacted it sooner because what better way to stop people leaving our country than to sell off our national airline and put the future of connectivity from the island nation at risk? That is what we are doing here. Ireland needs connectivity. It is not just about the road network or the public transport service. Essentially, it is about flights into and out of the country. We are an island.
Unless the Government proposes to use the funds from the sale of its Aer Lingus shares to build a tunnel connecting us to mainland Europe and to the United States, there is no getting away from the fact that we have lost control of our connectivity. In the north west, where I live, the M4 is a good road for most of the way but the last 60 miles of it are poor. That has been an impact in terms of creating jobs in Sligo or Leitrim. I have spoken to the IDA and business people there who say that is for the want of investment in 60 miles of road. That is connectivity, but if we cannot get people into the country in the first place, we can forget about international investment.
The Government touts Ireland as the best small country in which to do business, which is a bold statement, and it requires infrastructure in key areas, such as broadband, electricity and education. A key reason for which people and businesses would choose to locate in Ireland is the fact that it is an easy place to get to and because in 20 to 50 years time it will still be an easy place to get to. I might be wrong, but I would be surprised if the CEOs of multinational companies were to use ferries or transatlantic boats as a means of getting to and from this country. If we are to hope to attract international companies to Ireland, we must be sure they are able to operate in a global market from this island. They must be able to fly in and fly out of the country from multiple destinations. Although we are a relatively small country, due to our location we need that access. Without easy access, we will be unable to attract the full potential of international investment.
For some time, the Government has acted as if this were a done deal, a fait accompli. The Government did not decide just last night that the deal was to go ahead. The decision was made quite some time ago. However, it was necessary to have some document it would be able to put before the public and say it justified the deal. It is privatisation and is the same as the sell-off of State assets such as Bord Gáis and, possibly, Dublin Bus in the future. Can we trust the Government when it says it will not privatise Irish Water? Privatisation goes to the core of what the Government has aimed for during recent years. It is interesting to hear the Labour Party Members shouting about the Opposition in order to drown the voices of their consciences. Although they pretend to have fought the privatisation agenda, they have been laid down on the guillotine of privatisation and have abjectly surrendered to the major party, Fine Gael. I commend Deputy McNamara on his integrity on the issue. It took guts. However, while Labour Party Deputies have made grandiose speeches at their party conference about how they will oppose the privatisation agenda, when push comes to shove, they are the ones who are both pushed and shoved.
The Deputy had better read the motion.
Aer Lingus is to remain under IAG control for seven years, therefore the agreement the Government has reached with IAG is a stay of execution. IAG and Willie Walsh are interested in the Heathrow slots. They are not concerned with the shamrock on the tail wing or the future of Cork, Shannon or Dublin airports. As it becomes more unlikely that a third Heathrow runway will go ahead, the Heathrow slots have become more valuable to a company such as IAG. However, the blame for any future transfer of Aer Lingus, for example from IAG to another company, or the loss of jobs or services by IAG cannot be laid at the feet of IAG. IAG is a private, for profit company, and I have no problem with that. Its allegiance is to its shareholders and its job is to maximise return on investment for its shareholders.
Is the Government naive enough to believe that any agreement it signs with IAG will be maintained for seven years, let alone beyond that? IAG has a track record that shows its interest is not in providing jobs or supporting the countries from which its airlines operate. When Iberia was privatised, it was a good employer. Within one year, more than 5,000 jobs had been cut. That is more than the entire staff of Aer Lingus. The Government believes it can have a say in Aer Lingus after selling it off. I believe that is patent nonsense. It is like a builder selling me a house but saying it is only on condition that the bathroom tiles remain pink because he likes pink. It is unenforceable and makes no sense.
When Labour Party and Fine Gael backbenchers and Ministers attack people such as me and try to drown out what we are saying, the problem is that I am not the only one with these opinions. I represent a lot of people, and ignoring me and people like me is the same as ignoring the many people who agree with my views. While I would not suggest that the Minister would dismiss me and score cheap political points, some on the benches would, and every time they do so, they do it to many people. A failure to listen to and respect contrary opinion is what got Ireland into the mess in the first place, and people know it.
The Government was dealt a weak hand regarding Aer Lingus, given that we controlled only 25% of it. Given the importance of air transport to Ireland, an island nation, I, along with a number of my Labour Party colleagues, put a motion at the last Labour Party conference asking that the IAG bid for Aer Lingus be rejected by the Government until four issues were addressed. I commend the Minister for Transport, Tourism and Sport, Deputy Donohoe, on the way he has worked with us to address these issues. He took the contents of the motion very seriously.
The first issue was the need for an independent valuation of the assets of Aer Lingus. This has been done, and it has resulted in a considerable increase in the price offer to €2.50 per share. Probably the issue dearest to the hearts of the Deputies concerned was the need for a firm commitment in terms of registered employment agreements. Even in the past day, great progress has been made on it and there are indications that while some members of the trade union movement are not entirely happy, others are and they see the benefits of both this element of the deal and the fact that it will be tied into legislation that will shortly be introduced to the House. The third issue was the guarantees regarding connectivity and the Heathrow slots. The country has scored very highly on this. I find it difficult to believe how successfully we have dealt with the issue. Not only do we have commitments for Cork, Shannon and Dublin for the next seven years, we also have an indefinite veto over the sale of the slots in Heathrow. I am delighted and amazed that we have made that major achievement. The prime reason Fianna Fáil retained 25% of Aer Lingus when it sold 75% of the company was so that it would have some influence over those slots, which are extremely important to the country.
The deal goes much further than that, however. I commend all those involved in achieving a successful outcome. We cannot overstate the importance of the achievement.
The fourth part of our motion was a plan to promote Shannon and Cork airports because we were aware that they were in a vulnerable position. Considerable progress has been made in this regard, including the retention of the Cork-Paris and Cork-Amsterdam route and the plan to grow business at Shannon, where business has already grown by 17% in the last year. In light of Ireland's pivotal position for air traffic between Europe and North America and the customs arrangements in Shannon and Dublin, we are well placed to benefit from passenger growth.
Given that the Minister has delivered on the four matters of concern for us, we would be wrong if we did not support this motion. I am delighted that we took a stand on the issue because it helped to focus the Cabinet's attention on getting the best deal possible for Ireland. Deputy Creighton has accused the Government of pandering to Labour Party backbenchers. I make no apology for acting in the best interest of this country and any backbencher or Minister who acts according to that principle should be commended. As long as we have the interest of the country and its people at heart, we are doing our jobs well. This is why I was involved in an attempt to influence Government decisions for the better.
It was previously assumed that the €335 million the Government will receive from the sale its stake in Aer Lingus would be used to reduce our national debt. I welcome that the Minister for Public Expenditure and Reform has reached an agreement with the European Commission to spend the money on infrastructure projects such as roads, rail and broadband. We did not think of that as a bonus when we were preparing our statement. We certainly need considerable investment in infrastructure. This decision is in our national interest because Aer Lingus is a small airline, albeit a successful one, that has to compete against larger companies. By linking with IAG, it will have access to locations across the world, as well as reducing the costs incurred by smaller airlines. The cost per aircraft for a small airline is much greater than is the case for a larger company. It has been estimated that 2 million additional tourists will visit Ireland by 2020. We should be thinking about how we can best accommodate these additional numbers because while they will help to create employment they will also put more pressure on our infrastructure. We have a great deal to offer but areas of the country would benefit from further investment. We should be thinking about the future.
I was surprised that at the eleventh hour I was given a glimpse of the Nyras report. I challenged the CEO of Aer Lingus, Mr. Stephen Kavanagh, about this and his response was that the report largely dealt with reducing costs in destinations outside this country. For example, Aer Lingus considered it was paying too much for baggage handling in Brussels. I am curious as to why the report was only shown to one or two of us at such a late stage.
I recognise that Aer Lingus cannot stand still. We are in a competitive environment and we must be able to succeed. This deal will ensure the future success of the airline industry in Ireland and bring benefits to the country. It amazes me that we have managed to get such a good deal on the Heathrow slots. It is beyond my highest expectations and it is great that the money we will get can be invested in infrastructure projects rather than put towards our debt. I commend the Minister and all who worked on this deal.
I thank the Minister for Transport, Tourism and Sport for staying in the Chamber throughout the debate on the sale of Aer Lingus. He has listened to every point of view on the matter. A number of Deputies noted the absence of Fianna Fáil Members from the House. After three or four hours of debate, I welcome Deputy Dooley back to the Chamber.
I knew Deputy Bannon would be making an important contribution that might change the course of history and I wanted to be here for it.
I recently read the report of the Government steering group on the State's minority shareholding. The IAG offer price is an acceptable one and if the proposed sale goes ahead I believe some of the funds raised should be redistributed to our smaller airports and airfields. An example of a regional airfield with excellent potential is Abbeyshrule airstrip in County Longford, which has been in existence for nearly as long as Aer Lingus.
I am glad I came back.
Recently we had the outstanding news that Center Parcs is planning to establish a new holiday resort in Newcastle Woods, County Longford. Not only will this project provide 1,700 new jobs but it will also offer an opportunity to create a valuable infrastructure development for the midlands by expanding the Abbeyshrule airstrip. At a time when we are trying to attract foreign visitors via the Wild Atlantic Way and the ancient east trail, easy access to the natural amenities of the midlands would make a huge difference to the local economy.
The share price of IAG has doubled in the last five minutes.
I have been involved with the drive to expand the capacity of Abbeyshrule airstrip for many years.
A feasibility study of the airfield was carried out in recent years, which indicated that an extension to the existing runway could turn the airfield into a commercial hub for the entire region. Like the west, Limerick, Cork and Dublin, we need an airport in the midlands.
The Deputy needs somewhere to keep flying a kite.
It has been on the agenda of former taoisigh for years. In one of his party's manifestos, the former Taoiseach, Albert Reynolds, promised to develop Abbeyshrule airfield. The poor man has passed away and may his soul rest in peace. However, very little happened to develop that airfield, even during Mr. Reynolds' years as Minister for Industry and Commerce and later as Taoiseach. The site is approximately 69 acres and can be compared to London City Airport. The airfield is on a similar demographic scale to that English airport and both airports are situated on land that is similar in size.
Within a 30-mile radius of Abbeyshrule there is a population in excess of 300,000. There are currently 20 or 30 people in permanent employment at the facility, which should not be overlooked. Activities take place on the airfield some 364 days per year, with the exception of Christmas Day. One of the main attractions of Abbeyshrule is its location. A regional airport is out of the question but with an extension of just 100 m to the existing runway, which is exactly 1,100 m long, 80 to 90-seater planes could land there. We already have a commercial attraction in the shape of the new Center Parcs development, but we now need proper infrastructure in order to attract even more visitors and industry to the midlands region.
If the sale of Aer Lingus goes ahead, then it is vital to use the finance raised to upgrade our smaller airstrips. Abbeyshrule airstrip is a prime example of a project that would be good for tourism and infrastructure. Most importantly, it would provide value for money.
The potential of this development should not be ignored. As a midlands Deputy, I am pleading with the Minister to examine the possibility of developing that airfield. It would generate employment for the region and would also boost tourism. Its development would provide a value-for-money project for the midlands. It now makes more sense than ever to provide this valuable facility to encourage inward investment to the midlands.
Many fine infrastructural projects are under development in the region. In addition, the River Shannon is a great amenity which attracts tourists from America and Europe, including Germany. Visitors are in love with the midlands, but accessibility is a problem at the moment. Tourists or business people flying into Dublin airport should be able to take a small carrier to Abbeyshrule, so they would be within easy reach of all those facilities within minutes.
The midlands region is crying out for infrastructural development and has been overlooked on so many occasions for funding. It got a raw deal in the national spatial strategy, which has now been abandoned. The region was also bypassed in Transport 21, which was announced with a huge fanfare of publicity at that time. However, very little of that programme has been implemented. Plans were in place to continue the motorway from Mullingar down to Rooskey and it was ready to roll in 2009 and 2010 with the purchase of lands in the requisite areas, but to date that has not happened.
I hope therefore that some of the funds acquired from the sale of Aer Lingus will go towards the development of important infrastructure in the midlands region, which has been greatly neglected for many years. The time is ripe for such development, so the Minister should take this idea on board. I know he has been listening-----
-----but we need a little action as we go forward.
The next speaking slot is shared by Deputy Fitzmaurice and Deputy Tom Fleming. I call Deputy Fleming first.
I have grave reservations about how the proposed takeover of Aer Lingus by IAG will look in future. In trying to analyse the consequences for our national and regional airports, we cannot ignore the approach taken by British Airways to its domestic market and what has occurred there in recent years. British Airways has consolidated its transatlantic services into the London airports, especially Heathrow. It has achieved this by feeding all its UK regional passengers through Heathrow, rather than by providing transatlantic services from other large English city airports.
British Airways is ceding this significant transatlantic business to its competitors in favour of a consolidated London-centred approach. In the event of an IAG takeover of Aer Lingus, there is a real possibility that in the short to medium term, IAG will consolidate all Aer Lingus' transatlantic traffic into Dublin with its US customs and border pre-clearance facility or CBP. This scenario will have a detrimental effect on Shannon airport's interests in particular. It will also have a capacity to undermine the viability of the CBP facility.
Even in the event of a full withdrawal of the Aer Lingus transatlantic services over time, Shannon would rely on a number of US carriers continuing to service the airport. It is clear, however, that without a sufficient volume and the critical mass of Aer Lingus' transatlantic services, the viability of a CBP facility would be at significant risk. The US authorities will not provide this facility purely on a seasonal basis. It is clear also that any Irish airport with CBP facilities would have no year-round scheduled transatlantic services. This imminent possibility would clearly work in the interests of Dublin Airport at the expense of the State's other airports.
In the event of a successful IAG takeover of Aer Lingus, Shannon will be more vulnerable to cuts with possibly the total loss of its Heathrow slots over time. This was proven previously by Aer Lingus. Its complete transatlantic service would also be vulnerable as a consequence of the proposed merger of the three State airports at Shannon, Cork and Dublin. Shannon is most at risk and is vulnerable to sustaining the greatest loss through this deal. Cork airport with a large catchment population has a number of things in its favour. In all likelihood, Cork would maintain some of its Heathrow connections, as well as enhancing short-haul services.
The ironic aspect of this proposed takeover is that Aer Lingus has had a major revival in trade over the past five years. This occurred at a time of recession not only in Europe but also worldwide. The airline is competitive, viable and one of the fastest growing carriers in Europe.
Aer Lingus management has demonstrated that it can operate successfully as a viable and profit-making independent carrier. This follows 80 years of very successful business and its potential in the current global market is spiralling upwards. It would be most unfortunate to see one of our national treasures and State assets being totally sucked into the ownership of a foreign multinational.
Some of the negotiating tactics, ploys and offers look great but the bottom line is there are no job guarantees. There is also an absence of guarantees about the Heathrow slots beyond the seven-year window, which is one of the conditions. Paramount in all of this are the Aer Lingus legacy slots. They are crucial and very valuable to our tourism industry in particular, as well as our export sector and the maintaining and further development of foreign direct investment into this country. It is imperative that any condition of sale would secure those slots for a minimum of 20, 25 or 30 years. That is a vital aspect of any sale.
Due to economic and regional strategic development of our major indigenous industries, such as agriculture and tourism, which are rapid growth areas, there is a surge in technological companies investing in this country. Now, more than ever, we need to be in charge of our destiny. The enhancement of connectivity by aviation transport is crucial in this respect. As an island nation, our airport access and connectivity is a vital component in the revival and restoration of jobs. We do not want a repeat of what happened to Scotland, for example, as a result of IAG's actions. It has no transatlantic route, and the neglect of Scotland by British Airways has resulted in a complete absence of any route into the North American market from any Scottish airport. Aer Lingus has developed nine transatlantic routes that are flourishing, fortunately.
It is a matter of neglect that we have no aviation policy, and although there have been efforts made since early last year, they have not yet progressed. I ask the Minister to resume and renew the process. We will be at a major disadvantage in global aviation terms unless we put in a place a good working policy with rational thinking. Practically all countries at this stage are working from a strategic perspective. That approach is neglected in our case so I ask that the issue be addressed as a matter of urgency.
I mentioned earlier about feeding into our State airports. I mentioned Cork, Shannon and Dublin but we cannot forget Knock as a regional strategic airport as well. We have peripheral airports, such as that in Kerry, and the Minister knows its importance. There are also airports in Donegal and Waterford, and it is imperative that we do not neglect those resources and assets. They are crucial. The Aer Lingus regional service in its current format, with Stobart Air, has looked after the regions. In Kerry, for example, it got the public service obligation contract and I thank the Minister for his co-operation in that matter.
I would be very fearful of what will happen down the road with these crucial strategic airports. We know the road network comes in at Macroom at Cork and Adare in Limerick but we are totally hindered in our development of the tourism industry because of what is happening on that side. I ask the Minister to take up these matters in the near future as they are relevant to his portfolio.
I am thankful for the opportunity to speak to this issue. I acknowledge the Minister being here and I thank him for that. Some of us are on the transport committee and over the past few months we have seen people from both sides of the argument coming before the committee. One day we would listen to one side and another day we would listen to the other side; at the end, we had to assess the ups and downs, what is good for our nation and what will be beneficial to the country in future.
In my assessment, Dublin may survive and prosper but there is a red flag for Shannon and Cork. I am also wary that Knock does not seem to be mentioned at all. I know there was talk of improving the Cork to Gatwick route with more flights, etc., but for whatever reason, it did not seem to be worthwhile to discuss the airport at Knock when they debated the seven-year provision for Shannon and Cork. There is no figure for Knock whatever. I am surprised by this because in terms of regional development we must ensure that all the airports - Knock, Shannon, Cork or Dublin - be used to bring prosperity in each region. We must think about that into the future.
I intend to look further into a surprising element. If Mr. Walsh in England decides to return to Ireland and wants to buy something, it does not seem to be a problem, although the UK is still in the EU, but when an Irish company was talking about buying Aer Lingus, that was ruled out of order. It is ironic that after the British legal system was involved with the process of shares in another jurisdiction, all these bids were tabled.
The company has approximately €600 million in the bank and I have always said the price is very important. We are not getting a proper price for the laying hen, or an airline that has served this country so well. We must remember that we are an island nation, and we must ensure that we think strategically in holding assets that are good for our country. We must ensure that as an island nation, we will not be left to vultures that may come in and decide to use us for a while before going. The prosperity of our people - not now but in five, ten, 15 or 20 years - is very important.
I have heard all morning and yesterday that the Minister has brought guarantees of seven years for slots from Shannon and Cork. However, what can one do if in two, three or four years, we are told that the company had to do something different? What will happen if the company is sold again or IAG amalgamates with something else? Somebody may buy a business, for example.
It is for the person who buys it to run it as he or she sees fit. I do not buy into the argument that we will be able to press on IAG's toe and tell it to do this, that and the other because it said it would. That will not wash.
The first bad news that came yesterday was the loss of the 55 jobs. I accept that there may be more jobs in Dublin down the road, which would be welcome, but we need to understand that this is not all sunshine. There may be clouds on the way also. With a country like ours, we must ensure that we do the right thing now. We have looked at a strategic example like Eircom. Many people and Deputies one talks to today will say they are not sure it was a great idea to sell it given that we have encountered many problems since. When these things were being done, people acknowledged it and said it was for the improvement of the country. As with public transport and other strategic assets like airlines or airports, it may not always pay to have it. If one looks at the overall economic picture of bringing in business and creating employment, however, one finds that one may have to spend €1 to make €1.
We should have assessed this more. Down through the years, the one thing about Aer Lingus was that it was our airline and national carrier. The shamrock was the symbol of Ireland. There are no guarantees from now on. At one time, one heard on the advertisement, "Look up, it's Aer Lingus", but from tomorrow or next week it will be a case of "Look up, it's Willie Walsh".
I hope this is not a day we rue. In the likes of Cork Airport, numbers are going down while the airport is strategically very important for that part of the country. Shannon Airport is strategically important for the mid-west. It is sad that in the west we have a fine airport that is like an orphan. The Government seems to have forgotten about it.
It never wanted it.
If we look at the bigger picture including tourism potential and the development of the regions, we need to ensure that we give equal treatment to Knock, Shannon and Cork. With the population that is in Dublin, Dublin Airport will always prosper. There is no point in saying it will not. The volume of people is coming through it. If we are to have balanced economic regions and people working and living in other parts of the country, we must ensure that we treat all parts of the country the same. I am very worried for the airports at Cork, Shannon and Knock. While Dublin will survive and may receive extra flights, I worry that those airports will suffer the consequences a few years down the road.
The Government has made its decision. We should have assessed it better. This is a day when something that has been with us for years will fly away. When it flies away, it is gone and we cannot replace it. As a nation, we do not want to be scratching our heads in five or ten years asking why we did that on that day. One will hear different views.
The one thing that has not been talked about is Aer Lingus Regional. There is a contract for the next four to five years, but we do not know what is happening with it at the moment. IAG has its own regional set-up. Aer Lingus Regional has served even the smaller airports around the country very well and given a good service. It has gathered people and brought them to different places where they could embark on larger aircraft. There does not seem to be a word about it. We must remember that there are 700 people involved in Aer Lingus Regional. While some call it Stobart Air, that is what it is running under. That needs to be assessed also. Is this part of the deal and what will happen in three or four years when the Stobart contract is up? It is on contract to Aer Lingus. I hope it does not happen, but will it mean more Irish people losing their jobs?
I welcome this debate and in particular congratulate my colleague, the Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, for doing a very competent and good job over the last six months in negotiating a deal for Aer Lingus, Ireland, regional connectivity and the staff of the company that is very much worth supporting. It is important in debating this issue to do so on the basis of the facts. Some Deputies opposite have been talking about Aer Lingus as if we owned it in full. We do not. The decision was made in 2006 to privatise Aer Lingus for good or for ill. What we have today is a 25.1 % stake that gives us a very limited influence over the running of the airline. On key issues like the protection of slots into Heathrow, the only thing we can do is to act in combination with other shareholders to prevent the sale of those slots. As we saw a number of years ago when Aer Lingus decided for commercial reasons to move a slot from Shannon to Belfast, the Government could do nothing about it. As such, we need to get away from this narrative that Ireland is somehow selling a State airline. The decision was made back in 2006 to privatise an airline that had to survive on its own commercially.
Many airlines that were 100% state-owned across the European Union went bust while Aer Lingus has done a brilliant job as a relatively small airline. The only airlines of similar size in Europe are Finnair and TAP. Aer Lingus has done a great job to reinvent itself and find ways to reduce its cost base while increasing its services. Aer Lingus is vulnerable in the future because its size, however. The trend in the airline industry is that airlines of the size of Aer Lingus must be part of partnerships where large parent companies with connectivity all over Europe and all over the world can add strength to the story the company carries into the future. We must decide how we use the 25.1% we currently hold in Aer Lingus at a moment of maximum leverage to ensure we get the best possible deal for the company and the country into the future. In my view, that moment is now. To hear people talking about this being a rushed deal is odd. This has been six or seven months' of negotiation. Nothing has been rushed. Just because everybody in the House has not been involved in all of the conversations does not mean it is a rushed deal.
It just means it is a secret one.
Anyone who understood the sensitivities of a deal like this would understand that when one has Stock Exchange rules and is looking at off-loading a minority shareholding in a public company, there are certain things one can and cannot say. What has happened here is that the Government has taken an ultra-cautious approach. It rejected the offer initially and has gone back and taken its time to negotiate and use all of the leverage it has in terms of the share it still owns to maximise the benefit of any deal that is on the table for the country. That is what the Minister has done and he has done a great job doing it.
Let me say what this means for people. It means increased employment. It is a growth story for Aer Lingus, which without this deal would not happen. Without this deal Aer Lingus would be focused on survival in the future and not growth, expansion, investment and improved connectivity. It would not be focused on reconnection with the One World alliance and all the other things that will now be possible, as it links up with an organisation that has 466 aircraft, serves 248 destinations and carries nearly 80 million passengers a year. Aer Lingus is now plugged into that organisation and this will ensure it has a long-term future operating out of Ireland and Irish airports. It has already said that by 2020 it will have created a net 635 new jobs and next year there will be a net increase of 150 jobs.
Key issues surrounding connectivity and protecting Heathrow slots, in particular relating to Shannon and Cork airports, have been raised by many people in this House. Under this deal we will have stronger protection, from the creation of a B share, than what we have at the moment with a minority 25.1% share. The Minister for Transport, Tourism and Sport has negotiated this protection by using imagination and by being determined that the Government would not support this deal unless it had cast iron guarantees on the protection of slot disposal and a seven year guarantee on slot use. These guarantees have been achieved. That is a much more comprehensive protection measure for Heathrow slots than is currently available. That is the fact of the matter, as opposed to the emotion others are seeking to invoke.
This deal has been negotiated tediously over a long period of time to ensure key issues Members of this House have been raising on regional connectivity, in particular, connectivity out of Shannon, Cork and Knock airports, are addressed. Regional connectivity has not only been protected but has been enhanced from its current position. That is why the Chamber of Commerce in Cork is welcoming the deal. The business association welcomes the deal. For the first time in quite some time, people are talking about Cork Airport with optimism. They are talking about the commitments Aer Lingus is making in what is a growth story, using regional hubs in Europe, such as Paris and Amsterdam, and developing new linkages to Germany, Spain and elsewhere. That is now possible because of the connection with a much larger, internationally connected, IAG group.
The B share is not simply about the slots. The speaker before me also mentioned this. When they look up, people are filled with pride when they see an Irish brand in the air. When coming home from the United States or other parts of Europe, they want to see a shamrock on the wing or the tail of an aircraft. The branding is protected. The Minister for Finance effectively has a veto over any decision to change the branding or name of Aer Lingus or to move its headquarters out of Ireland. We have guarantees on keeping an airline in Ireland, which is branded as an Irish airline. These guarantees will keep the Aer Lingus name strong and growing in the future. At the same time, the airline and its name and brand are plugged into an international group that can make it much stronger. That is the deal and it is a good one.
In terms of its strategic future within IAG, the Minister had to make a decision, and the Government had to confirm it, on whether this was the best potential partner in terms of the growth of Aer Lingus in the future. What other potential offers might be out there? Should we accept this offer or should we wait for someone else to come along? If one looks at the response of the markets and shareholders in Aer Lingus, everyone is comfortable that the fit with IAG is the right fit for Aer Lingus. In terms of the protection and growth of brands and airlines such as BA and Iberia, the same opportunities for growth and expansion are now available to Aer Lingus. This decision will create jobs, increase connectivity out of Shannon and Cork airports and protect and grow potential routes out of Knock Airport, as well as Dublin Airport. It will also result in eight new planes flying under the Aer Lingus banner and will provide certainty around the Heathrow slots.
However, another question needs to be asked. What will happen to the money and the proceeds from the sale? Where will it go? Will it be used strategically on connectivity for Ireland, which is Aer Lingus's primary concern? As a Government, we have decided that the €335 million which will be raised from this sale will be ring-fenced. It will be given to the Irish Strategic Investment Fund to manage. It will be targeted specifically at connectivity projects in airports and ports and broadband connectivity. It will connect Ireland and improve our international connectivity, as an island, which is exactly how this fund should be used. This fund will not be used to pay off national debt or something like that. This has been a strategic share in Aer Lingus, since it was privatised. We are now going to use the proceeds as a strategic fund to improve and protect international connectivity in the future. This is in addition to the other strategic decision which will strengthen and allow Aer Lingus to grow and will provide vital connectivity services, both regionally and out of Dublin, in the future. I strongly welcome and support the decision.
The next speaking slot is shared by Deputies Mary Lou McDonald and Gerry Adams.
Bhí Sinn Féin glan in aghaidh Rialtas Fhianna Fáil nuair a dhíol sé Aer Lingus and we oppose this latest move by Fine Gael and the Labour Party to sell off the State's remaining 25% stake in the company. Ireland is a small island nation and the economy needs consistent and secure air access, and not just for seven years but in perpetuity. No Government should jeopardise this by throwing away the links that Aer Lingus provides. This State, through its 25% stake in the company, has the potential to be an advocate for sustainable development of Aer Lingus in the interests of its customers, workers and the island as a whole. Like any private multinational conglomerate, IAG will only seek to maximise profit. This Government has once again failed to put Irish strategic interests first. The State will now have no say whatsoever in the future of Aer Lingus. A few short years down the line, it will be clear to every one that we have lost a vital aviation asset forever. We will lose certainty, connectivity and jobs. Beidh deireadh le hAer Lingus.
If sold off, Aer Lingus will become a very small cog in a vast multinational airline enterprise. Commercial considerations rather than national strategic ones will be the deciding factors. The interests of IAG shareholders will always trump the interests of the economy and the Irish travelling public. The Minister knows this and the Government knows this. Ba mhaith leis an chuid is mó de mhuintir na hÉireann gurb in Éirinn a bheidh Aer Lingus. Let us remember that this is a profitable company. Aer Lingus's financial position, after some huge losses following privatisation, is strong. Major growth is planned on long-haul routes. It has been buying new aircraft. Aer Lingus does not need IAG and the Government does not need to sell off this asset.
Of course, senior management at the airline will benefit by millions of euro from any sell-off, but Aer Lingus workers have been given no guarantees on compulsory redundancies or outsourcing. According to the Minister for Transport, Tourism and Sport, Deputy Donohue, and these are his words, not mine, Mr. Kavanagh has indicated that he does not foresee a likelihood of either compulsory redundancies or non-direct employment under IAG ownership. Is that "likelihood" a legally binding guarantee? Níl anseo ach plámás.
Trade unions at Aer Lingus envisage 1,200 job losses as a result of this sell-off. Those job losses would cost taxpayers €8 million just to meet the basic entitlements in terms of jobseeker payments for these workers. Since IAG took over the Iberia airline, it has cut 4,500 jobs.
What of the internal report which the Minister claims he has not read and which the Taoiseach also claims not to have read? It was commissioned by Aer Lingus and recommended slashing costs by cutting 10% of pilots' jobs, 10% of cabin crew jobs and 25% of the catering staff. The Nyras report was presented to the management of Aer Lingus a month ago and represents a major blueprint for job cuts, confirming the worst fears of Aer Lingus workers. The Government, despite its claims to the contrary, has received no guarantees whatsoever about compulsory redundancies or outsourcing and it claims to know nothing about this blueprint for wide-ranging job cuts.
In these circumstances, how on earth can this Dáil be expected to approve the sell-off of the people's stake? In the Government's efforts to ram this through it briefed the media rather than the Dáil. I do not understand why Deputies were not given all the documentation, all the paper work. Leaving aside ideological and other considerations, how does refusing to provide us with those things give us the basis for making an informed decision? There were condescending and patronising remarks from Government spokespersons, telling us we have to understand the difficulties and the complexities involved in all of this. Why not just give us the papers? Are we stupid? Can we not read them ourselves? Can we not form a judgment?
Sinn Féin opposed the initial Fianna Fáil decision to privatise and the Government is simply finishing off the bit of business commenced by Fianna Fáil. Fine Gael is an adherent of neoliberal ideology. It believes in dismantling State assets and in privatisation across the board. Look at Irish Water. Watch that space in the time ahead. Fine Gael would sell its granny if that suited the market. But what of the Labour Party? What of the famous motion passed at the Labour Party conference? What about the absence of Labour Party Deputies for this debate? The motion signed by eight Labour Party Deputies called for an independent valuation of Aer Lingus assets in Heathrow slots. It also sought a commitment to prevent the outsourcing of jobs and compulsory redundancies. It called for a plan for Cork and Shannon airports, taking into account their value to their individual regions. No such guarantees have been given. What of the 1,500 deferred Aer Lingus pensioners, sold out by Fianna Fáil in the first instance and now by Fine Gael and the Labour Party? Where are the Labour Deputies who said they would oppose the sell-off, tooth and nail? As Shakespeare once wrote, "Full of sound and fury, signifying nothing". Tá Fine Gael agus Páirtí an Lucht Oibre ag cur críche leis an obair a thosaigh Fianna Fáil. Mo náire iad.
Those Deputies who sponsored the motion at the Labour Party conference are not stupid. They know it is wrong to sell off Aer Lingus. They also know that the terms and conditions of this sell-off do not match the motion they sponsored. Was their conference motion all about the optics? This vote today allows them to make a stand. In fact, this vote compels them to make a stand in keeping with their own party conference motion. Unless their party conference motion was always about throwing shapes, that is exactly what they should do. They should vote against the sell-off of Aer Lingus. If they vote for it they will be putting the interest of a multinational company before the needs and interests of the Irish people.
To clarify for the Minister, Deputy Coveney, there is nobody on any side of this argument who does not understand that what we are debating is the issue of the 25% stake. We know that the initial vandalism to Aer Lingus in 2006 was carried out on Fianna Fáil's watch.
The die was cast for the 25% stake back in 2012 when the Government compiled a list of what it regarded as non-strategic State assets. Along with elements of the ESB, Bord Gáis and Coillte, which of course it stepped back from, there was the 25% stake in Aer Lingus. A "non-strategic asset", it said. At the time I remember questioning, and not getting satisfactory answers from, the Minister for Public Expenditure and Reform, Deputy Howlin, on how on earth the Government arrived at the conclusion that the 25% stake was not strategic. I listen to Government Deputies now and I listened to the Minister last night and all are praising Aer Lingus, which is correct to do. The Minister set out the way Aer Lingus has served and continues to serve the country well. He also observed that Aer Lingus and its operations represent a significant and legitimate national interest. Strategic, strategic, strategic.
If the objective at the outset had been to offload non-strategic assets, this holding in Aer Lingus would never have appeared on the list. However, that was not the rationale or the motivation. Instead, Fine Gael and the Labour Party, led by the nose by Fine Gael, agreed to an approach and a set of actions that are all about taking the public interest and the public share out of public utilities and aviation, including Aer Lingus.
Some of the Minister's colleagues have made valiant efforts to convince the rest of us that the rights of workers in Aer Lingus are protected by this deal. They cite, almost ironically, the registered employment agreements and say they will be a catch-all to secure people's rights and entitlements. It is deeply ironic because the very legislation required to give life and effect to such agreements has not even passed through the Oireachtas as we speak. Fears of compulsory redundancy, fears of outsourcing, fears of a real, effective running down of workers' terms and conditions are justifiable because if IAG and the Government have their way it will, necessarily and by definition, trigger a process of consolidation. If we are to follow the trend and logic of the Nyras report, that will involve very serious cuts in employment. Not alone will this involve a reduction in the numbers of those employed, it will also involve a substantial change in the nature and profile of employee and a change from direct to indirect employment. Many of the airlines cited by Deputy Coveney saw exactly that pattern and exactly that narrative play out.
I find it deeply unacceptable that the Government is so cavalier in its approach to the rights of employees, job security and the standard of work of those employed in Aer Lingus. The workers feel that acutely. They are not fooled for a second by the Minister's conditional and half-baked, halfway-house guarantees. They do not cut the mustard for them.
Even more shocking is the Minister's attitude towards the pensioners. He met with the group of 1,500 deferred pensioners who had received letters of comfort from Aer Lingus. Most had given huge service to the company and they were given a clear understanding, in black and white, that their pension entitlements would be secured and protected. What followed was anything but that. I have a letter from one of them, a man who had very lengthy service with Aer Lingus, and his pension entitlement has been cut by 60%. It has more than halved.
At one stage while thinking out loud, mar dhea, Deputy Joe Costello of the Labour Party said he would seek something for this group of deferred pensioners if a deal were to be put on the table.
Do it now.
That did not materialise. Not to put too fine a point on it, what has happened is that the deferred pensioners in particular have been thrown under the bus by the Government. The Minister met them, as did the Tánaiste, and undertakings were given that they would be given a fair hearing and that something would be done to rectify the situation. However, the Government did not want to know and still does not want to know. The reality for this group of pensioners — fine people who in Aer Lingus served the country and the airline well, truly and honourably — will be put to the pin of their collar in their old age. That is the story for them. As the Minister spins his good news, that is the reality for them.
However, the Minister seems to have carried the day because he has successfully convinced his Government colleagues that his "B" share, his golden share, somehow allows for an ongoing veto in respect of the Heathrow slots. In front of me I have a copy of the agreement struck with IAG and also a copy of Article 10 from the articles of association of Aer Lingus. Let us be clear and put on the record of the Dáil what will exist in perpetuity. There is to be an ongoing cast-iron guarantee that Aer Lingus Group plc will not change its name. Equally, there is a guarantee that Aer Lingus itself will operate under the name Aer Lingus and a guarantee that the brass plate, the head office, will be headquartered in the Republic of Ireland. After that, my friends, there will be nothing else - nothing whatsoever.
I heard Deputy O'Dowd praise in a heightened emotional state the wonder of having an absolute ongoing veto over the disposal of the Heathrow slots. The Minister, Deputy Donohoe, needs to make it clear when he speaks — I assume he will make the concluding remarks in this debate — that no such veto exists. What the Minister will be allowed to do is convene an extraordinary general meeting, at which the shareholders will decide whether to dispose of the Heathrow slots. If anybody imagines this is a win for Aer Lingus, the Government or State, he needs to give his head a shake. The members of the Labour Party, in particular, who pledged to protect the strategic interests of the country and citizens in Aer Lingus need to wake up and smell the coffee. There is no veto regarding the Heathrow slots. There is a commitment for five years and a conditional commitment for an additional two years in respect of the use of those slots. While this is true, the Minister, Deputy Donohoe, the Minister of State at the Department of the Taoiseach, Deputy Paul Kehoe, and the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, who has left the Chamber, should realise that, in seven years, we will still live on an island. I predict that in seven years, not only will we not have any controlling influence over the use of Heathrow slots, we will have no veto because it is not written down in any of these documents. This is what makes the failure of the Government to provide to every Deputy these documents and others that exist in respect of this deal all the more cynical and disgraceful. It is utterly cynical on the part of the Minister. It is utterly cynical to deny the transport committee its right to scrutinise the detail. There is not a veto and Members on the Government side simply repeating like parrots that there is one does not change that reality.
I ask for the Members' co-operation. There are only four minutes left. Deputies Maureen O'Sullivan, Mattie McGrath and perhaps another Deputy still wish to contribute but I must call the Minister at 4.27 p.m.
To be helpful, since the Chief Whip is in the House and there are a number of speakers who still have not had an opportunity to speak, would it be possible to change the order to allow another 20 or 25 minutes of debate to facilitate them as they have genuine concerns? In the interest of fair play and recognising that the Government has refused to allow this debate to continue this week-----
We are eating into time now.
Three minutes each.
All right. I call Deputy O'Sullivan.
Could we have five minutes each to give people an opportunity to put their views on the record?
This is like Spancil Hill. Will the Members have five minutes each?
I do not want to have a vote on this. Deputy O'Sullivan has three minutes.
I will speak quickly. We could apply one of our proverbs to this - "Marry in haste and repent at leisure" - because that is what we are doing here. We came in on Tuesday believing we would be talking about the postal services legislation, the Constitutional Convention and criminal justice but the media informed us very early that morning that the whole programme had been changed.
My views arise from my having spoken with long-serving members of crew in Aer Lingus. The first point they would like to make is that IAG works on the basis of a 12% profit margin, or thereabouts, whereas Aer Lingus works on the basis of a profit margin of 7.5%. Therefore, in order to be profitable, it seems that it will be up to Aer Lingus staff to make up the difference. How will they do so? We know it will be through cheap labour, outsourcing and reorganising.
The second point concerns Aer Lingus short-haul flights. European staff see clearly how the IAG outsources all check-in, baggage handling and airport support work to cheaper companies. Therefore, why would Aer Lingus staff be confident that Ireland will be treated as a special case?
The notion that the guarantees are legally binding is also a myth because various experts in corporate takeover law and appointment who have been consulting the staff have said there has never been a case of a government taking a corporate entity the size of IAG to court over breaking an agreement. That just does not happen.
Third, in the eyes of staff, the seven-year guarantee is like a time-bomb. They believe that after the seven years have expired, if not before, the Heathrow slots will be redistributed overnight for British Airways long-haul services, connecting British Airways to the Middle East and the US routes as they are far more profitable than it would be to keep Heathrow as a hub for Dublin outbound and inbound traffic.
The staff are also very concerned about the lack of consultation with them at a meaningful level. The consultation appears to have been all with shareholders and those who stand to make vast sums of money from this. I listened to the CEO this morning. Some of the phrases he used included "rationalising processes" and "deliver services in a new way". He then used the phrase "dependent on growth". Of course, that is the get-out clause.
Aer Lingus has been very much associated with so much that is Irish, including our céad míle fáilte. The company staff are renowned for their safety, commitment and care. All of these are now under threat. There are far too many questions for the staff, and far too many genuine concerns for this vote to go through now. Why is the Government selling its share in a profitable company? Why does it expect promises to be kept by a corporate entity? Corporations are not exactly known for their human rights concerns, workers rights or labour laws. How can the Government really believe that a multi-billion euro airline group carrying over 500 million passengers per year would care about the connectivity of a small island of 4.5 million people, especially when we have already seen examples of it outsourcing other work?
The Government has told us its decision was taken following detailed and careful consideration of all the issues involved in the potential disposal of the 25.1% share, yet we are aware of the circumstances described in the Nyras report. The Taoiseach and Minister for Finance, Deputy Michael Noonan, said they did not see it. That is the first untruth and example of misleading information. There has been a fob-off. As Deputy Maureen O'Sullivan said, we came in to do certain business this week and were diverted into the business at hand. I have waited all day for my ten minutes in which to speak but the Government has allowed me only three. It is very magnanimous.
Of course, no one believes the Minister, Deputy Paschal Donohoe, anymore. The Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, referred to connectivity and stated the €335 million would go into the strategic investment fund for connectivity. Connectivity my hat. Aer Lingus will be gone. The Minister for Agriculture, Food and the Marine should recall the experience of the sugar industry and note the desolation in Carlow, Thurles and other areas of the country.
We sold out our industry there, which was a very vital industry.
We have sold off other assets like Eircom. Where is Eircom now? It takes a month to get a telephone repaired in any part of rural Ireland and if someone lives in a remote area, they will not even get a telephone line. Irish Ferries was sold and Irish Shipping is now in Chinese ownership. The Government's attitude to workers and deferred pensioners is "to hell or to Connacht", "to hell or to India" or "to hell or to Willie Walsh". The Government does not care. It never cared about ordinary people. One can go back to the Government of 1948 to 1952 which sold our investment in long-wave radio. Fine Gael has not changed its spots. The Labour Party joined it and Fine Gael beats it up, throws it around like pulp and browbeats it into voting with it.
This is an outrageous sham like everything the Government has done, such as Uisce Éireann. Big Phil has gone to Brussels. Where is Putting People First, the famous document for better local government? The Minister for Public Expenditure and Reform now tells us that it was a mistake and he took his eye off the ball. The Government is a disgrace. It is forgetting about the regions.
The Government talks about the golden share. It will melt away as if it is a lollipop or candy floss in the mouth as quick as one puts it in. We all know that. If the Government did not have any support with a 25.1% stake, what will it have with its golden pellet or bullet? I know what will happen to its golden bullet and I know where it should go as well. The Government will go back and face the people and it will face them pretty soon. It got a lesson last week in Carlow-Kilkenny but there are many more lessons waiting for it because it has sold out the people who gave it its mandate.
The Government will not even give us time to debate this matter. It rammed this through here today. We got seven hours of debate. The Government should join a community employment scheme and work week-on, week-off because that is all it has done here in the past three weeks. We were running with two, three and four hours taken out of a day's work during the past number of weeks. The Government Chief Whip should be ashamed of the way he runs this Government. He only gives us seven hours to debate a strategic and important industry with so many jobs and so much activity. Government Deputies should hang their heads in shame and go back to their constituents tonight because the people are waiting for them.
Deputy Billy Timmins: I thank Deputy Mattie McGrath for giving me some of his time. I do not necessarily agree with the sentiment he expressed but he certainly did it very emotionally. It is important to point out that since 2006, the Government has had no control over Aer Lingus, it is a private company and it cannot survive in its current form. Aer Lingus is a commercial company and must make its decisions on that basis. I am not a believer in Government having any role in running companies like airlines in the same way as I do not believe it should ever have had a role in running the Great Southern Hotels because it is not capable of running them. Government would be better served if it became a bit more efficient in running the things it is responsible for.
Aer Lingus management, the regional airports, the former CEO and Michael O'Leary of Ryanair are in favour of this. Who am I to argue with many of these players? I suspect that most workers are secretly in favour of it. Certainly, the most important people of all who have received virtually no mention in this House - the consumers - would be in favour of this. We all remember times when we could not travel to London on an aircraft given the price and we should acknowledge the role played by Ryanair in giving large parts of the population access to flying.
It is important to realise that we live in a global economy. Ireland is geographically an island but it is not an island commercially and economically.
That is the latest policy. When is an island not an island?
Deputy Dooley is very much an island because he cannot remember how Fianna Fáil sold off 75% in the recent past. He is not in a position to cast any stones in this Chamber. It is important to realise that we live in a global economy.
The Government has spoken about a windfall to the regions. My understanding is that State aid cannot be given directly to the airports. The Ireland Strategic Investment Fund was mentioned by the Minister for Finance. What is in this fund? I understand it contains between €5 billion and €6 billion. It was set up 18 months ago and somewhere in the region of only €100 million has been circulated. It is a mechanism that is not working, the Government is going to change it and here we are talking about it as a vehicle for getting money out to the regions. In his response, I would like the Minister to tell us how the windfall to the regions will happen, the status of the Ireland Strategic Investment Fund, how much money is in it, how much money from it has been invested since its inception and if he intends to route money through it from the sale of Aer Lingus.
In a nutshell, I very much support the sale.
I thank all Deputies for their contributions. We have had a very long and important debate on this very important decision and I have been here for nearly all of it. I am aware of the importance of this decision like everybody else in this Chamber. This sentiment is not confined to the Opposition benches but is something every member of this Government understands. We appreciate the very long history of Aer Lingus and its deep importance to our country. For 70 of the nearly 80 years of its existence, it was a State-owned organisation. It was privatised nine years ago. Across that entire period, it has had a very special place in the hearts of the Irish people. The Government has been very conscious of this at every stage. It has been very conscious of the public interest in that company and the decision. It is the reason why the Government has taken such care in reaching a decision on the future of its shareholding in the airline. We are doing so against the background of extraordinary tourism numbers announced yesterday. There were almost 1.8 million overseas visits to our shores in the February to April period, an increase of 13.5%, which highlights the importance of connectivity and access to our country and shows how our economy can benefit from tourism. Against the backdrop of these figures that this Government has been instrumental in delivering, we do not need any lectures from that side of the House on the importance of access.
We are also aware of the degree of change that has taken place in the international aviation market. It has changed immeasurably since 1936 with the most rapid changes occurring over the past 30 years. For its first 70 years as a State-owned company, Aer Lingus served the country very well. As a minority State-owned company, it has performed even better in a highly competitive and volatile market. The Government has now decided to support IAG's offer as we are absolutely clear that this provides the best opportunity for Aer Lingus to continue to grow and prosper, serving the country as part of a larger privately owned airline group. Like any business, Aer Lingus has had to change with the times and, likewise, Government policy relating to ownership of our stake in the airline is responding to changing circumstances.
At the heart of this debate and our decision is whether the State should continue to own a significant minority shareholding in an airline. This factor has been touched on by some Deputies. As I have pointed out already, the European airline industry remains relatively fragmented compared to the US. Many of the European legacy carriers have been forced to implement significant restructuring plans in recent years, have been taken over or have gone out of business. This has driven consolidation among European airlines with many formerly state-owned airlines either becoming part of larger groups or having failed. They no longer exist.
The Government and I do not want to leave it to chance that there will be a forced decision in more difficult circumstances at some point in the future. The huge improvements in choice of routes, price and service levels are largely attributable to the opening up of the aviation market to real competition. Tourists, business people, friends and relatives can now fly in and out of more Irish airports to more destinations than could ever have been imagined 30 years ago. Deputy McGinley made the point earlier about the difference in price between now and when he took his first flight on an Aer Lingus plane over 30 years ago. The travelling public and the economy as a whole have benefitted greatly from the very good competition and connectivity provided over recent decades. This Government's aviation policy is firmly aimed at ensuring this situation is maintained into the future. A key aspect of the IAG offer is that upon completion, the two largest Irish airlines will continue to operate as strong operators and serve vital routes for Ireland and for the Irish market.
As has been demonstrated clearly over the last two days, the Government's decision to support the IAG offer has only been taken after very careful consideration and having secured guarantees from IAG. I want to emphasise the main reasons for this decision to accept this deal. The first is jobs. This will create employment. It is envisaged that a net total of 635 jobs will be created in Aer Lingus in Ireland by 2020, with 150 of these jobs coming into existence and on stream by the end of 2016. It strengthens the competitive position of Aer Lingus in an extraordinarily volatile and demanding industry. It reduces risk to the company and provides it with an opportunity to plug into more routes, to serve more locations and to launch new services, two of which we will see next year. It gives greater certainty around our connectivity to Heathrow, a point to which I will return. It strengthens the guarantees we have around the disposal of Heathrow slots and it provides guarantees for seven years on the usage of slots that do not exist at the moment. It promotes Ireland's wider connectivity and can and will bring growth to our airports. It is anticipated that benefits will accrue on short and long haul routes at Dublin, Cork, Shannon and Knock airports. Finally, it will protect the iconic Aer Lingus brand, which is very important to this Government and to the people, and it will keep the head office of Aer Lingus in Dublin.
I will now respond to some of the points that were made during the debate. Politics is about leadership. It is about doing what we believe is right even if sometimes that is not popular. Over the last two days the leadership qualities of other parties and other Members have been brought into focus. I am particularly struck by the Members from both Government parties - from Fine Gael and the Labour Party - who have indicated that they will support this motion because they believe it is in the best interests of the State, Aer Lingus and the current and future workers at the company.
What about Aer Lingus Regional?
Despite initial reservations, some of which I shared and which led to my rejection of the earlier offer from IAG, Deputies in government in both parties engaged with me on this matter. They engaged with the company and the unions and they laid out to me, as Minister, matters of concern in a clear, responsible and, at times, forceful manner. There were Deputies on the Government benches who decided not to play politics with the reputation of the company or with the livelihoods of the workers they represented but rather-----
They were only playing games.
Rather, they sought to use their offices - as Ministers and Deputies - to seek assurances for those they were elected to represent and I commend them for that. As Minister, I did my best to respond to the points that were made. Indeed, they were crucial in determining the criteria for evaluating the initial proposal and fundamental to the agreement secured by this Government. I want to acknowledge the role played by the Minister for Public Expenditure and Reform, Deputy Howlin, the Minister for Finance, Deputy Noonan and the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Nash in a process that has gone on for many months, in private and in public, in advancing issues which they knew to be important. They, along with many of my colleagues in both parties with whom I engaged over many months, showed passion and ambition for their country.
That is what this agreement is about and why I am putting the motion to the House this evening.
The same passion and ambition has not been evident from others in this House. I must say that I am particularly struck by the cowardice of Fianna Fáil in this matter. The party that privatised 75% of Aer Lingus-----
The Minister is going to privatise 100% of Aer Lingus.
The party that bankrupted our country is now playing politics with this great company.
During the recent debate, Fianna Fáil members praised the management of Aer Lingus for turning the company around. Then, in the same breath, they castigated the same management for selling out the workers and looking to advance an agenda they do not have. The Deputies opposite cannot have it both ways. They cannot stand up in the House and say on the one hand that the leadership of Aer Lingus is responsible, along with the workers, for saving the company and then argue that the same leaders are trying to ruin the company.
They will be getting a big payout-----
Fianna Fáil, having secured practically no guarantees when it sold Aer Lingus, is now, for nakedly political purposes, opposing a deal which includes guarantees and which brings benefits to the country. To make matters worse, Deputy Martin, a man whose sole legacy to Irish aviation is the scale of the debt on Cork Airport-----
The Minister will have it closed down if he has his way
-----referred yesterday to the Nyras report and claimed that it was commissioned last February by Aer Lingus and IAG. It was nothing of the sort. Deputy Martin either did not know the facts, which shows a shameful inadequacy on his behalf as leader-----
Has the Minister read it? The Minister should stick to the contents of the report.
-----or did know and misled the House. The work of Nyras was commissioned solely by Aer Lingus. It had nothing to do with IAG and it has nothing to do with the deal currently being debated by this House.
All the more reason to read it.
Deputy Martin’s contribution was only matched in its absurdity by another claim from a Fianna Fáil Deputy who said the following about Aer Lingus: “tomorrow it will be owned by the Arabs”. That is complete nonsense.
Where is the Minister's veto?
Fianna Fáil now stands separate to every major business organisation in this country in not welcoming this deal. The party that bankrupted our country-----
Here we go. Here comes the punch line.
-----is now bankrupt of economic vision or any long term economic plan. To quote their former party colleague-----
-----Senator Averil Power-----
What about the Minister's former colleague, Deputy Creighton? Where is Lucinda?
If ever we needed evidence that proves her right, we have seen it in the last few weeks. As she said, Fianna Fáil is "unfit to govern".
Could we have order please?
As for Sinn Féin, the same old tired proposals were brought out again: nationalise the airline-----
Let us look at the proposals from Sinn Féin to nationalise the airline-----
What about the Minister's veto?
-----nationalise the banks; nationalise everything that moves.
What about the Minister's veto?
The Government wants to privatise everything.
How, I wonder, would we pay for all of these nationalisations?
I ask the Minister to explain the veto. Where is it?
Of course, we know the answer. The answer to all of this is its famous wealth tax we hear so much about. That tax would not only be levied on the companies it despises-----
Where is the veto?
-----but it would also be levied on every individual in this country, including the workers in Aer Lingus. Their colleagues on the Independent benches included the cheerleaders of the boom like Deputy Shane Ross and the cheerleaders of gloom, like Deputies Clare Daly and Ruth Coppinger.
Nationalise the speech writers.
They have engaged in their normal approach of parliamentary indignation.
If it was not for the fact that they speak in the same tone about every matter brought before the House, there might have been other reasons for taking their points seriously.
It must be the Minister, Deputy Michael Noonan's speech writer.
I want to respond to a number of legitimate points that were put to me-----
Like the 400 jobs.
-----regarding maintaining the connectivity to Heathrow Airport, retaining the Aer Lingus brand and its head office in Ireland. Subject to the approval of Aer Lingus shareholders, these connectivity commitments will be enshrined in the articles of association to give them legal effect.
And the Government's golden share.
The Minister for Finance will retain one share in the company, the class B share-----
The black share.
-----which will be redesignated as a new class of share-----
That is the BS share.
-----with certain rights attached to it.
The share is not a veto.
The prior consent of the Minister for Finance, in consultation with the Minister for Transport, Tourism and Sport of the day, will be required by Aer Lingus before taking any action inconsistent with the connectivity commitments.
A big stick to beat them with.
What does that affect?
Some Deputies have suggested there would be nothing to prevent the articles being changed in future under IAG ownership, negating the value of this share.
That is right.
This is absolutely not the case.
The golden share.
Why does Deputy Mattie McGrath not listen?
Under the provisions of the proposed articles, which have been agreed with IAG, any alteration of either the rights attaching to the B share or the articles themselves that affect the rights attaching to the B share in any way, would require the consent of the B shareholder, the Minister for Finance of the day.
In other words, the proposed protections to be enshrined in the articles-----
Mr. Willie Walsh must be losing his touch. He is giving a lot of money for Aer Lingus by the sound of things.
-----cannot be changed in the future without the agreement of the State shareholder, the Government.
Does the Minister believe that?
The tooth fairy share.
Despite the clear network plans, the plans by airport and the protection of slots by airport that have been outlined, some Deputies continue to try to scaremonger by referring to job losses that happened at Iberia following its merger with BA to create IAG. I heard some Opposition spokespeople refer to the great company of Aer Lingus and say this would be another nail in the coffin of a company as great as Aer Lingus. They attempted to draw a direct comparison between Aer Lingus and Iberia. Those Deputies know that is completely inappropriate.
The same promises were made to Spanish workers and they were let down the same way.
Shame on them for drawing that comparison.
What about the Nyras report?
Let us consider the difference between the two companies. Iberia was in financial distress at the time of its merger with BA. It had been loss making for several years before their merger occurred.
That makes the Government's deal even more scandalous.
Aer Lingus is profitable having undergone significant restructuring over many years.
Why is the Government selling so?
Even though they are aware of these facts, the reason they brought such focus on what happened with Iberia is because they want to draw attention away from one of the main reasons the Government is supporting this transaction, which is to maintain high-quality employment and to create more jobs in the future-----
-----with the plans in place and the target for the 635 jobs by 2020.
The plan is to pay them poorly and force them out after six months
Let us consider the existing workers and the work that has taken place within Government over many months.
This has been acknowledged by many backbench speakers in recent days. The chief executive of Aer Lingus-----
How much does he get?
-----has confirmed in writing Aer Lingus's position on registered employment agreements.
What about Stobart Air?
He has committed to doing two further things with registered employment agreements.
There are 400 jobs in Stobart Air.
He has committed to expanding the scope of registered employment agreements.
Does the Minister believe him? He does not care about wages.
He has committed to expanding the number of workers who will be covered by the same registered employment agreements. One of the great ironies is that all of the speakers who have complained about a debate that has gone on for two days-----
It is at the 11th hour and too late.
-----is that one of the things that is now not happening today as a result of their complaints is the very legislation to introduce registered employment agreements and put in place the foundations to make this agreement happen-----
That was the Government's choice.
-----is now not going to happen this week.
Whose fault is that? The Government changed the agenda for the week.
The Minister of State, Deputy Gerald Nash, will introduce that legislation and it will underpin these agreements.
I ask the Minister to conclude.
Give him lots of time, a Leas-Cheann Comhairle.
Mr. Kavanagh has also indicated, and it has been publicly acknowledged by union leaders today, that there will be a process of structured consultation with staff and their representatives, governed - I use these words deliberately - by agreed structures when or if any restructuring is required and that Aer Lingus does not foresee a likelihood of either compulsory redundancy or non-direct employment.
The Minister would believe anything.
What does "not foresee a likelihood" mean?
This is a company that responded at times of crisis-----
The Government did not see anything wrong with Irish Water either.
-----to huge challenges and huge difficulties without having to make recourse to these options.
Clearly the Government foresaw everything that would happen with Irish Water when it rammed that legislation through the Houses.
Now at a time of growth we can look at that track record in times of difficulty. We can look at the legal framework the Government is introducing. We can look at the written assurances from the chief executive of Aer Lingus and that gives my Government colleagues the confidence-----
And the cover.
-----to know that these commitments will be implemented.
I again acknowledge Aer Lingus's great success in recent years.
Why does the Minister not acknowledge Aer Lingus Regional?
It has responded to the challenges of the global financial crisis and of the events of 9 September 2001. Its management, leaders, workers and unions have collectively risen to those challenges and have done a tremendous job. However, what is underpinning the recommendation and the decision before the Dáil this afternoon is the simple and fundamental acknowledgement of what is happening in the airline industry. We need to consider the volatility and consolidation in the aviation industry. The Government believes that there will be significant benefits for future growth and connectivity in the company joining a larger group such as IAG-----
It is selling its soul.
-----while remaining as a separate business with its own brand, management and operations.
What about the deferred pensioners?
In addition, the board of Aer Lingus has expressed the view that, as part of this group, it will have more opportunities to manage risk and accelerate its growth plans and should be in a stronger position to respond to the commercial challenges.
The Government made the decision to reject the approach from Ryanair early in our term of office. When I made the decision not to accept the initial approach from IAG, we did not hear a word from the Opposition about it. It was struck in dumb silence on the matter.
That is because the Government was doing the right thing.
There were no calls for a debate to focus on it.
The Government rejected that proposal then because we believed the best deal was not then secured for our country, for Aer Lingus or for its workers. We rejected that deal then and we have secured a better deal because, working with Cabinet colleagues, and back bench Deputies and Senators in both parties, we have advanced the cause of the company, its workers and passengers for the years to come.
Why is the Minister supporting the IAG proposal?
Will the Deputy, please, allow the Minister to conclude?
I want to conclude with the reason I am asking the House and the Government to support this proposal.
It should be accepted not supported.
Yesterday, I commenced my contribution by saying Aer Lingus was one of the first State companies established by a newly independent State in 1936.
It was a seven-hour, not a two-day, debate.
It predates other organisations and companies such as CIE and Bord na Móna. The establishment of Aer Lingus was more than the setting up of an airline-----
The sell-out of it.
-----it was an expression to the rest of the world-----
This is a bad day in terms of fairness for the deferred pensioners.
-----of Irish optimism and openness in terms of a fledgling country finding its way in the world, connecting with other countries to advance its interests. Today, that optimism and openness remains. Change should not be feared.
The Minister is fairly optimistic.
It must be examined and, where appropriate-----
This proposal was not examined.
-----and following reflection, it should be embraced.
The history of privatisation in Ireland is to be feared.
There must be openness to new opportunities-----
And job losses. Do not forget about the job losses that will result from this.
-----while admitting, as many speakers have done, that there are no certainties in life and that risk is always present.
What about Irish Shipping and all the jobs lost in that regard?
Ireland and Aer Lingus are ready for this change.
We will be looking up in the future but we will not be seeing Aer Lingus.
I am confident that supporting this offer is the right decision for this Government and the Dáil. It is in the best interests of the airline, its employees-----
And Fine Gael.
-----those who will work in the company in the future, the travelling public, job creation and the overall economy.
Is it in the best interests of the country?
I am seeking the approval of this House to proceed on the basis of the general principles I have laid before it. I commend the motion to the House.
On a point of order, how much time is allowed for questions and answers?
As a teller, I seek a vote by other than electronic means so as to give Government colleagues in the Labour Party and Fine Gael an opportunity to examine their consciences and what they are doing to the country.
A walk-through vote has been sought on No. 13, a motion re approval by Dáil Éireann of the general principles of the disposal of shares in Aer Lingus Group plc. That vote will now take place.
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