Dáil Éireann Debate, Wednesday - 22 June 2005
59 Mr. Sargent asked the Minister for Transport if his attention has been drawn to the serious difficulties facing airlines as a result of the ongoing increase in fuel prices; if further price increases will prompt the Government to reconsider its decision to sell a majority stake in Aer Lingus in view of the strategic importance of having such a carrier at a time when other airlines may be going out of business. [21108/05]
View answer72 Mr. Morgan asked the Minister for Transport if the privatisation of Aer Lingus has the potential to damage the future competitiveness of the State. [18091/05]
View answer81 Mr. G. Murphy asked the Minister for Transport the progress made in introducing private investment into Aer Lingus; and if he will make a statement on the matter. [21180/05]
View answer90 Mr. Broughan asked the Minister for Transport the amount of money the Government expects to raise from the sale of its majority shareholding in Aer Lingus; the amount of this total which will be reinvested in the national airline; and if he will make a statement on the matter. [21188/05]
View answer94 Mr. Broughan asked the Minister for Transport the guarantees he will provide that the Aer Lingus landing slots at Heathrow Airport will not be sold-off once the Government completes the sale of its majority shareholding in the national airline; and if he will make a statement on the matter. [21187/05]
View answerI propose to take Questions Nos. 59, 72, 81, 90 and 94 together.
The Government's recent decision to allow the sale of a majority shareholding in Aer Lingus is the culmination of detailed and comprehensive consideration of the various options facing the company over the past year. The key driver was to ensure that Aer Lingus continues to make a valuable contribution to the economic and tourism development of the country.
Significant growth potential has been identified, particularly on long-haul routes, provided Aer Lingus has the appropriate cost base and access to funds to finance aircraft acquisitions. The Government decision will ensure that funds are available to support that growth and to provide financial security. With access to funds and a competitive cost base, the airline can continue to make a major contribution, flying to more destinations, offering more choice to consumers, opening new markets for tourism and growing jobs.
The Government also decided that in view of the strategic importance of the company, a significant minority stake of at least 25% should be retained, irrespective of the chosen transaction mechanism.
I am well aware that Aer Lingus faces many challenges looking forward, including pressure from rising fuel prices. However, the Government decision provides the basis for good long-term planning and shifts the focus from crisis management to planning for growth.
In relation to arrangements for the investment process, the Minister for Finance and I have moved quickly to engage advisers with the publication on 2 June last of a tender notice inviting proposals from financial and legal advisers. These advisers will advise on the size, type and timing of the Aer Lingus sale transaction as well as execute the chosen transaction.
I have already written to both Aer Lingus and ICTU in relation to implementation of the Government decision. Consultations have begun with the company in this regard and I will be meeting with ICTU on 28 June next.
As the objective for facilitating an equity injection in Aer Lingus is to fund growth and provide financial security, it is clear that any investment transaction must involve the issuing of new shares, thereby allowing the proceeds to go directly to the company. However, decisions on all matters relating to a transaction, including the valuation of the company, will be made at the appropriate time with the assistance of the selected advisers.
