asked the Minister for Tourism and Transport if the inter-departmental review group who are considering the question of the replacement fleet for Aer Lingus have yet completed their work; if not, when it is expected that they will report; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Interdepartmental Review Group.
13.
I refer the Deputy to my reply to a previous question on the subject of the Aer Lingus fleet replacement programme on 31 March 1987 and the examination of the Aer Lingus proposals by the interdepartmental review group.
Recent developments and trends within the aviation industry have made it necessary for Aer Lingus to undertake some further work and a further submission from Aer Lingus is now in course of preparation. This will be examined by the review group, who are now expected to report later in the year.
Will the Minister advise us as to what these trends are and whether they were apparent to him or his Department on 31 March 1987 when he told us he was expecting a final report in May-June?
I can list some — not all — of the factors involved. Those responsible are, the improved situation in regard to interest rates which is very important in regard to funding of the Aer Lingus fleet; depreciation of the US dollar — as the House knows, at one stage the dollar was on a par with the punt and now it is roughly $1.50 to the punt — and the strong profit position of Aer Lingus on 31 March 1987 for the trading in the 12 months previously. Those three important factors had to be taken into consideration and we are waiting for resubmissions from Aer Lingus.
I appreciate that those factors could have some impact——
Thank God.
However, I humbly submit that those factors should, if anything, speed up a decision by the inter-departmental review group as to the raising of capital. Will the Minister say when precisely a decision will be taken or will this matter be put off for ever and ever?
I do not agree with the Deputy's comment that these factors should speed up matters. If I had to provide money when the punt and the dollar were at par it would be a more substantial sum than when the punt and the dollar are related one punt to $1.50. The Deputy's general thesis or major premise does not hold up. It is very difficult to give a precise date because there is a meeting of the Council of Ministers tomorrow and decisions may be taken which would change the scene as there are so many variables. To venture into the realm of assessment, I expect the report by July or August.
(Limerick East): Will the Minister confirm that his Department are considering allowing Aer Lingus permission to sell part of the equity of the company to private sources to fund the replacement of the fleet?
I understand that the Deputy has a special interest in the financial end of it as he is Opposition spokesman but I do not have any such information in my brief.
Is it part of the terms of reference of the group that the possibility of selling shares in Aer Lingus to the public is being considered at present as one of the possible options of raising funds for the replacement costs of the fleet?
The terms of reference are very long, I will just read a short sentence from them. In the light of the projected investment needs of the Aer Lingus group for air transport purposes and for ancillary activities the review group will examine and report by the end of December to the Minister for Communications and the Minister for Finance on the structure and funding options for the group. That is clearly a wide remit.
It is fair to assume that the option to which I referred is on the table along with many others. Is that the Minister's opinion?
The Minister is long enough on the road now not to indulge in interpretation of terms of reference.
(Limerick East): Will the Minister give a commitment that any announcement about selling equity in Aer Lingus will be made in this House and not by means of a press release during the summer recess?
Hear, hear.
The Deputy is putting a degree of emergency into the summer recess——
(Limerick East): There is no emergency but, in the matter of the replacement of the Aer Lingus fleet, the House should be informed if the major step of privatisation of part of Aer Lingus is imminent.
I have always regarded the House as the proper place to inform the legislators of any move and, through them, the public.
What is the estimated cost of the replacement of the fleet?
On account of the factors I outlined to Deputy McCartan, nobody could give an answer at present. The Deputy is aware that the previous Government sanctioned two 737-300s for later on this year. The financing of the fleet into the mid-nineties has been the subject of speculation as the figures have varied so much and it would not be fair to the House to put a hard figure on it.
How will the finances be raised?
This has been asked on three or four different days already in the House and it is a matter for the Department and the Government to decide when the final report comes from the inter-departmental review group.
To redraw the balance a little from those who want to privatise Aer Lingus, has the Minister made known to the review group Fianna Fáil's pre-election commitment to Aer Lingus and their workers that there would be no privatisation in the Aer Lingus fleet or in their operations?
Lest I get an ideological blow on the left jaw from one side and on the right jaw from the other, I wish to state that I have the greatest confidence in the members of the inter-departmental review group to know the nuances of policy of all the parties in this regard and to keep them in mind when they make a decision.
(Limerick East): The Minister knows far more than he is telling us in the House.
I wish I did, if I am giving the wrong impression I apologise.