(Limerick East): A Cheann Comhairle, when I finish in about four minutes I would like to concede a minute of my time to Deputy Ivor Callely.
Adjournment Debate. - Aer Lingus Rescue Package.
Is that agreed? Agreed.
(Limerick East): The Aer Lingus crisis and Aer Lingus itself has been of great concern to the public for over 12 months now. The report and accounts for the year ended 31 March 1992 show that Aer Lingus employs 7,600 persons in Ireland and 13,631 in the group as a whole. I believe Deputies on all sides of the House are aware of the fears of the workforce and, in particular, the fears of thousands of those workers of being made redundant.
Aer Lingus has served Ireland well. It has been a good employer, an efficient and courteous carrier and a major contributor to our tourism industry. It has added a variety of ancillary activities to its core business of air transport and these activities have contributed to the profitability of the company in the past and cushioned its losses in recent years.
In the 1992 report, published just 12 months ago, the chairman, Mr. Bernie Cahill, stated, inter alia:
The scale of investment required to enable Aer Lingus to generate additional wealth and jobs will necessitate a significant increase in the equity base of the group. This is an issue which is vital for the growth of Aer Lingus and its contribution to the Irish economy. It must be addressed as a matter of urgency.
The loss in the core business was then almost £40 million. It is now, we are told, almost £100 million, or, if we believe the leak to RTE earlier this evening, in excess of £90 million. Neither the Minister for Transport nor his predecessor acted on a matter which the chairman of the board considered to be of extreme urgency 12 months ago this week.
I should like the Minister to answer some questions: does the Minister agree with Mr. Cahill's statement that I have just quoted? If he does not, will he dismiss the chairman and the board of Aer Lingus? Does he reject the rescue plan put forward by Aer Lingus to his Department? If he does, does he have an alternative plan, or is the Government bringing in consultants to help draw up such a plan? Is he aware that the Tánaiste and Minister for Foreign Affairs has compared the enormity of the problems at Aer Lingus to the problems experienced by Irish Shipping, B & I and ICI combined? Would he agree with this? Would the Minister like to comment on the surprise expressed by the Tánaiste at the extent of the problems of Aer Lingus, in view of the fact that all relevant information about Aer Lingus was provided to the Labour Party negotiators, Ministers Quinn, Taylor and Howlin, when the Programme for a Partnership Government was being agreed? Would the Minister like to express a view on this, or is the Tánaiste merely being disingenuous against the background of the absolute commitments made by him to Aer Lingus staff assembled in a hangar at Dublin airport during the election campaign?
Would the Minister state the Government's intentions? Procrastination could lead to another catastrophe. Neither Aer Lingus workers nor the tourist industry can afford such a catastrophe. Our national airline has been one of our national symbols. If the Government walks away from its responsibilities it will never be forgiven. I want effective action, and I want it now. I do not want some individual to be made a scapegoat by the Minister. In this context we are not talking about making scapegoats, we are talking about a plan that will rescue Aer Lingus and preserve the jobs of the workers. Any attempt to make a scapegoat of one individual and offer him up as a sacrificial victim for the inactivity and incompetence of the Government will be rejected. We want full answers, Minister, and we want a rescue plan for our national airline.
I thank Deputy Noonan for sharing his time with me tonight on this very important matter. I wish to echo clearly the statements made by Deputy Noonan in the House in relation to the concerns about the national airline in past months. I wish to put on record my support and that of my Fianna Fáil colleagues, especially those on the north side of the city, for the protection of our great national airline, Aer Lingus, its employees and the families of those dependent on the survival of Aer Lingus. I recognise, as does Deputy Noonan, the excellent role played by its employees in the past 12 months.
Indeed, there are an awful lot of questions to be answered. It is my understanding that the answers lie with the responsibilities of those in senior management and those who have made decisions which have brought Aer Lingus into the serious financial difficulties it now finds itself.
I should be vigorously opposed to any proposals that would affect the survival of our national airline, the further development of the airline and the jobs of the employees within the airline.
I am glad to have the opportunity to respond to this question on the Adjournment because it enables me to advise the House of an important decision taken in relation to Aer Lingus. This evening, following consultation with my Government colleagues, I am announcing that Mr. Bernie Cahill has been appointed as executive chairman of Aer Lingus. Mr. Cahill has been given executive responsibility to take whatever action is necessary with immediate effect to restore the company to commercial viability. Decisions to be taken by management and workforce must be evident before the Government can commit itself to any specific level of support. In that context, both my colleague, the Minister for Finance and I have said that, subject to the constraints in the national finances, which rule out very large injections of equity in the group by the Exchequer, the Government would be prepared to support convincing and visible action.
I have given the executive chairman absolute discretion in terms of increasing yields, disposing of assets not essential to the core business and achieving savings on the company's cost base. Some elements of this recovery strategy can be quickly identified and put in place right away. I have also indicated that Aer Lingus is to maintain a significant presence on the transatlantic routes in the context of the existing policy on the Shannon stopover.
In the light of this announcement, the House will understand that the Government has no plans to appoint international consultants. We have had sufficient analysis, now is the time for action. The executive chairman shares my view that a partnership approach is essential and, with this in mind, the chairman will be seeking a very early meeting with representatives of the employees, and with other interests, to explain the new framework to be developed to ensure the company is restored to viability.
In looking to the future, it is vital to recognise the realities of the Single Market in which most Aer Lingus services operate. Airlines must compete in an open market in which governments can no longer intervene to regulate access to routes or pricing. This makes it essential to Aer Lingus' survival that its costs match those of its competitors. Along with reducing costs, the airline must ensure that its yields are at sustainable levels. The resolution of Aer Lingus' current difficulties and its future prosperity dictate that its fares must be not only competitive but also economically sustainable.
I have said before that the Government values the contribution which has been made by Aer Lingus to the economy over the years. It has provided the critical mass, expertise and range of products which have helped spawn our national aviation industry. I have also said that the Government wants to see Aer Lingus' contribution continue into the future. Aer Lingus is presently going through a very difficult period in its history. It is now time for all concerned to work together to resolve the problems facing the company. The underlying situation of the company is serious but does not warrant panic measures. It is, however, a time for resolute action.
Finally, I would like to express my appreciation of Mr. Cahill's decision to accept the demanding task of executive chairman and the inherent acceptance of the absolute necessity to deliver the required recovery strategy. While difficult decisions will have to be taken and sacrifices will be called for, I believe that confidence can quickly be restored to the airline.
Does the Minister accept that this is a Pontious Pilate job?
The Minister's reply ends the debate.