Deputy Gilmore has 40 minutes to present his case.
Private Members' Business. - Air Transport Policy: Motion.
I wish to share my time with Deputies De Rossa and Sargent.
Is that satisfactory? Agreed.
I move:
5. "That Dáil Éireann,
—recognising the strategic importance of Aer Lingus for the Irish economy, its role as a provider of substantial employment and the necessity for a viable national airline,
—concerned at the implications of the recent senior appointments and resignations in the company and at the Government's continued failure to announce a coherent air transport policy and to provide Aer Lingus with the equity capital which it needs,
calls on the Government to
(1) immediately publish its air transport policy,
(2) provide Aer Lingus with adequate equity capital to enable it to develop as a viable national airline, and to state without further delay the amount and form of the equity, and
(3) reject the privatisation of any part of the Aer Lingus group."
This is the third time within the past six months that this House has had a major debate on Aer Lingus. That is a reflection of the central importance of the national airline to our economy, and of our concern for the 7,600 Aer Lingus jobs based in Ireland and the 13,600 worldwide.
The need for a repeated debate is also a product of the Government's continuing failure to provide the equity which Aer Lingus needs, the Government's reluctance to state in clear terms its air transport policy and to dispel the continuing indications that Aer Lingus, or at least a significant portion of the group is to be privatised. These are not new issues, on which an unreasonable Opposition is seeking to extract a premature decision from Government. Aer Lingus has been seeking State equity since 1991. We are now on the eve of the 1993 Easter Dáil recess, and there is still no announced decision about the amount or the form of that equity.
The Programme for Government declares that the commercial future of our national airline will be ensured "as part of our overall air transport policy", but we are still in the dark as to what that air transport policy is. There have been declarations from some on the Government side that Aer Lingus will remain in public ownership and that the jobs will be protected, but all the recent indications are that the pieces are being put in place for massive job shedding and, ultimately, for privatisation.
Despite all the talk about Aer Lingus, the uncertainty is continuing, hanging over the talented and committed workforce and gnawing at the company's confidence and performance. If all the promises and declarations of intent which have been made about Aer Lingus could be converted into cash, the company's problems would be well solved. But promises and declarations are all that the Aer Lingus workers have been hearing for the past six months. There was no shortage of promises, very specific promises, during the general election. These promises have yet to be fulfilled. In the Dáil on 12 March the Minister declared, "decision time is now". Over three weeks later, we are still waiting for him, and his Government, to make, or at least announce their decision. Last Saturday, in Waterford, the Tánaiste, and author of the most specific election promise, declared, "Aer Lingus will not be abandoned by the Labour Party or by this Government". The following day, the General President of SIPTU, Mr. Bill Attley, wisely took the precaution of warning that the handling of the Aer Lingus issue would be the litmus test for this Government. Here tonight, when we hear the Minister's reply to this motion, and tomorrow night when the House decides the fate of this motion, we will see what the litmus test indicates.
This is the first opportunity since the general election for this House to vote on the Aer Lingus issue. It is the opportunity for each party, and for each TD, to convert their election promises and their declarations of intent into a firm decision by Dáil Éireann. It is a final opportunity, before the Easter recess, for the Minister to clarify and quantify the rather vague commitments which he has made to date.
If the Government is serious about providing adequate equity for Aer Lingus, about promoting an air transport policy which is in Ireland's interest and about retaining Aer Lingus in public ownership, then they will have no difficulty in accepting this motion and in spelling out the detail of their intentions for the company. I invite the Minister to accept this Democratic Left motion and in doing so, to provide the staff of Aer Lingus with the re-assurance and confidence which they desperately crave. If, however, the Government do not accept this motion, then it will expose the shallow and cynical nature of the promises which have been made to date, and when it is put to the vote tomorrow night it will give every party, and every TD, the opportunity of declaring with their vote their commitment to Aer Lingus. The litmus test is underway and by tomorrow night, we will all know whether Aer Lingus is to be supported or to be let down.
The conflict between promise and practice over Aer Lingus, is not just a political matter. It impacts very directly on the operation and future of the company. To date, the debate over Aer Lingus has featured much political promise and declaration. Not only has this not been matched by decision, policy and money, but it is being denied by what is taking place in practice.
Three inter-related responses are needed from the Government to address this crisis in Aer Lingus. First, the provision of sufficient equity to guarantee the commercial future of the company. Second, a coherent aviation policy to address the position of our national airline in the deregulated and so called liberated environment of today's air transport industry and to address the EC's policy on air transport. Third, the maintenance of Aer Lingus, and its associated companies, in public ownership to ensure the security of the national airline and the jobs which it provides. On each of these requirements, all the indications are that while in public the Government is saying one thing, in private, and in practice, it is doing the opposite.
Let us first take the question of equity. The case for Aer Lingus has been argued repeatedly in this House, and superficially at least, appears to have been accepted in principle. But where is it; how much and in what form?
On 12 March the Minister spoke about the need for a spirit of partnership in tackling the company's problems. Unfortunately, since then, the Government has behaved more as a spirit or phantom than as a partner. Mr. Bernie Cahill has been directed to produce a rescue plan and he, in turn, has told the trade unions that such a plan must be produced within a matter of weeks. The only policy given him, is not, to violate the sanctity of the politically sensitive Shannon stopover. In effect he has been told to do anything he likes provided it does not upset the political equilibrium in the mid-west. When he eventually produces his plan, we are told that the Government will give it as yet unspecified backing.
That is not the kind of approach one expects from a partner, particularly when, as in this case, the partner is the sole shareholder, is the body responsible for determining overall aviation policy for the country and the body responsible for the handling of the set of EC relationships which impact on the whole issue.
How are the unions and Mr. Cahill to devise a plan, when they do not know the extent or form of the Government's financial backing? It is not possible for any union/management talks on the company's future to be meaningful unless they know how much equity will be available and what is the Government's perspective on the future of the airline and the industry. All of the items on the union/management agenda, including pay, conditions and staffing levels, require a knowledge of how much money will be available.
The Minister should tell the House tonight how much is available and in what form. He should tell us if the Government have yet made a decision on the amount and form of equity. If they have not made that decision, then what was the basis for the Tánaiste's assertion at the Labour Party Conference on Saturday night that he would never let Aer Lingus down?
If the decision has been made, then to whom, if anybody, has it been communicated, and why are the staff and unions in the company being kept in the dark as they enter their negotiations? It is hard to believe that Mr. Cahill who has been charged with producing the plan, and who apparently dictated his own terms for taking on the job, has not been taken into the Minister's confidence about the Government's specific intentions on equity. If Mr. Cahill, at least knows, the ballpark figure for the amount to be made available and he is not disclosing that to the unions then the staff of the company are being invited to play blind man's bluff with their own jobs and futures.
It is also hard to accept, especially in the light of the recent resignations and appointments at the company that the fundamental direction of policy on the company's future has not already been determined, and that it is pointing clearly to massive jobs losses, to the sale of parts of the group's non-core activities and, indeed, ultimately to privatisation.
During the debate on 12 March, many Deputies, including the Minister, referred to the resignation of Mr. Cathal Mullen and to his life-long contribution to the company. Reference was also made to the nature and choice of Mr. Cahill's appointment as executive chairman, especially in view of Deputy Spring's previous comments about his role as chairman of Greencore. On 12 March the Minister appeared to be rowing back somewhat on the dictatorial scope of Mr. Cahill's terms of reference, but any such apparent retreat has since been roundly reversed by the subsequent resignation of Mr. Kyrl Acton and his replacement by Mr. Peter Owen.
Mr. Acton now joins Mr. Mullen as the second "fall guy" for the company's problem. Mr. Acton resigned on Friday and Mr. Owen was appointed on the following Monday, which must be a record for the replacement of a top executive, even for an executive chairman who has earned himself a reputation for doing business at weekends. The question which hardly needs to be asked is: was Mr. Owen head-hunted and lined up before Mr. Acton resigned and did it, indeed, lead ultimately to Mr. Acton's course of action?
Mr. Owen's appointment is extraordinary. How can the Government convince us of their sincerity regarding the protection of jobs at Aer Lingus, or even its retention in State ownership, when the executive appointed to head up its operations is the man who led the assault on jobs and on the unions in British Airways and who prepared that company for privatisation? If you are serious about the Aer Lingus jobs and about public ownership, you do not put somebody in charge who is a specialist in job shedding and union bashing. Mr. Owen had a very stormy stay at British Airways and by all accounts a very stormy exit, in the wake of a week long strike over the dismissal of a cabin crew staff member which subsequently led to a successful libel suit by the worker involved.
I am sorry to interrupt the Deputy, but I must say I am concerned at reflecting on a person outside the House in respect of his character and integrity from a privileged Assembly of this kind. I would prefer if the Deputy would not so reflect on persons outside the House.
I wish to make it clear to you, a Cheann Comhairle, that I am not in any way reflecting on the man's character or integrity, I am simply commenting on his style of management which I think I am perfectly entitled to do and which has been the subject of press comment during the weekend.
I think the remarks the Deputy has been making are, to say the least, of a very derogatory nature.
His contribution to the settlement of the industrial dispute to which I am referring was to attempt to require staff to sign the kind of "back to work, no strike agreement", which has made the name of William Martin Murphy a by-word for bad industrial relations in this country for almost a century. It is probably no wonder the Sunday Independent of 4 April 1993, true to its pedigree, carried an article which was ecstatic about the appointment describing him as:
A paratrooper in pinstripes,...the toughest boss that any group of trade unionists might have to face, with the reputation of a proverbial "hatchetman" ... It seems likely that the man head hunted by Bernie Cahill to bring the semi-State company out of its tailspin will lose no time in coming to a showdown with the unions.
This Government's password is partnership, partnership with management and with the unions. It is certainly a unique understanding of the concept of partnership which would lead any Government to ask trade unions to negotiate in the dark, and to simultaneously saddle them with a boss, whose hostility to trade unions and public ownership is legendary. In the absence of any stated policy by the Government one can only draw the most disturbing conclusions.
This Government's policy vacuum is not just confined to the formulation of a survival plan for Aer Lingus. It includes also the unforgivable lack of any aviation policy at a time when the global air industry is still undergoing a transformation resulting from deregulation and at a time when the EC is promoting an air transport policy which is antipathetic to the interests of our national airline.
The Programme for Government states:
We attach a high priority to the future development of modern efficient transport links with Britain, Europe and further a field, and will suitably upgrade ports and airports. We will investigate the posssibility of further development which could use Shannon as a fast freight facility. We will ensure the commercial future of our national airline as part of our overall air transport policy.
Who could argue with that? But what or where is the "overall air transport policy" referred to in the Programme for Government?
We all know that the problem of Aer Lingus can ultimately only be resolved in the context of an aviation policy for this country. How in the context of the Single Market and European Union are we, the only air and sea dependent member state of the Community to get our goods and services on and off this island, especially as the Transport Commissioner is telling us that there will be no EC funding for mobile assets? What is the place for Aer Lingus, a small national airline, in the deregulated world of modern aviation, where increasingly the control of routes, markets and even airports is being concentrated in the hands of a smaller number of powerful private airline companies? This is a situation which is now being called into question by reputable economists like Professor Kenneth Galbraith.
These, of course are questions which should have been addressed long ago. Not only did successive Governments and Ministers fail to develop an air transport policy to take account of the rapidly changing air industry, but they have acted in a manner which was positively hostile to Aer Lingus and which has now given rise to the crisis in the company.
When deregulation was the order of the day throughout the air industry, and Aer Lingus needed the support of its Government shareholder, former Ministers for Tourism, Transport and Communications Deputies Séamus Brennan and Geoghegan-Quinn were ironically regulating the Irish industry in a way which was hostile to the national airline. The crisis in Aer Lingus today is the fault not of individual managers who are being scapegoated, but of Government with its two airline policy and with the restrictions imposed on the company's airline operations. Aer Lingus was told it could not fly to London Stansted, could not fly to Liverpool, could not fly to Munich, could not fly from Waterford, from Kerry or from Knock and had to stop at Shannon on all its transatlantic flights, whether the passengers wanted to or not. At a time of deregulation and in the name of competition, Aer Lingus was fettered with anti-competitive regulations by successive Ministers.
No other Government in Europe has behaved in such a discriminatory way against its own national airline. While the rest of the EC was limbering up for the liberalisation of air transport in Europe, our Government was pursuing a "leprechaun" policy, encouraging the growth of five little airlines, all engaged in a little peripheral competition for the smallest share of the European air market and ending up with one of the best national airlines in the world being badly undermined. Even while Aer Lingus sought to fight back by, for example, seeking to develop fifth freedom services, it was being betrayed by the fifth column activities of the Minister responsible whose policies were furthering the interests of a privately owned rival.
When Aer Lingus complained, or sent out a message that all this would lead to trouble ahead, they were silenced. When the board of Aer Lingus complained about the preferential treatment being given to Ryanair, they were threatened with dismissal by the former Minister for Tourism, Transport and Communications, Deputy Séamus Brennan. When, in 1991, Aer Lingus looked for financial assistance, they were given a gagging order by the former Minister for Tourism, Transport and Communications, Deputy Geoghegan-Quinn, on the grounds that they might say something politically incorrect about Shannon. When the 1991-92 annual report of Aer Lingus, published in July 1992, told the public what the Government already knew, that there was an urgent need for equity, they were first hammered by a threat from the Taoiseach that 49 per cent of the company should be sold to a foreign airline and then three days later, the board of the company was subjected to a patronising lecture by the Minister whose policies had helped cause the problem in the first place. That was last October, when the first tranche of equity should have been put into Aer Lingus. Six months and a change of Government later, not a penny has been invested by the Government in Aer Lingus and there is still no sign of the air transport policy.
It is, of course, being put about that it is all under control, that Mr. Cahill will in due course produce his plan, that the Government will honour the promise and that it will be happy ever after at Collinstown.
The provision of equity for this ailing company is long overdue and each day's delay is adding to the company's debt servicing and debt repayment problems.
We are being told that not only will the EC not provide assistance for Aer Lingus, but that it will set the terms under which the Irish Government may do so. The Transport Commissioner came here last week and announced that there would be no money for mobile assets. Has our Government not yet convinced our EC partners and the Commission of the simple truth, that the only way of getting on or off this island is by plane or by boat and that if our goods and passengers are ever to get onto the modern, EC subsidised motorways, fast trains and chunnels which integrate the rest of the Community, there must be investment in ships and planes? The Kinnegad bypass will not do a great deal to combat our peripheral and regional disadvantage if we do not have a reliable air and sea transport service to get us on and off the island.
Are we now wedged between an EC policy on funding which limits our ability to assist Aer Lingus and an EC air transport policy which is contributing to the problem in the first place? Where do we stand on the EC's air liberalisation policy? Does our Government slavishly accept this EC policy which is weighted in favour of mega carriers and which will operate to the disadvantage of our national airline? This is a policy matter which must be answered if, irrespective of whatever financial assistance is eventually provided, Aer Lingus is to survive into the next century. The Minister has an opportunity tonight to answer those policy questions and to tell this House once and for all how much equity is to be given to Aer Lingus, when it will be given, and what is this Government's air transport policy.
On a point of order, the amendment circulated in my name is incorrect. In case Members might refer to it, it does not read correctly and will be corrected by the General Office for publication tomorrow. It is not the amendment I submitted.
I am sure we will be anxious to carry out the appropriate correction.
Three Members of this House have held ministerial responsibility for Aer Lingus over the past 18 months. Deputies Brennan, Geoghegan-Quinn, and the current Minister, Deputy Cowen, have all been made well aware of the difficulties facing Aer Lingus and the acute need for an injection of equity. Each of them has dallied and equivocated. Their failure to make the decisions required have simply allowed the scale of the problem to increase month by month and there can be no doubt that the company is now facing the greatest crisis in the more than 50 years of its existence.
Four weeks ago tonight, Minister Cowen announced the forced resignation of the chief executive of Aer Lingus, Mr. Cathal Mullan, and the extraordinary appointment of Mr. Bernie Cahill as executive chairman. It was understood that Mr. Cahill, as a matter of extreme urgency, would produce a recovery plan, that it would be submitted to the Government within a matter of weeks and that a rapid response would be forthcoming from the Minister.
Four weeks on, the only apparent developments of any significance have been the resignation of another senior executive, Mr. Kyrl Acton, and the appointment of the former director of operations with British Airways, Mr. Peter Owen, as chief executive of passenger services. This appointment and the manner in which it was made has simply added to the sense of apprehension among Aer Lingus staff and the public about the future of the airline. The two personnel now in the Aer Lingus cockpit and with their hands on the flight controls are Mr. Cahill who prepared the Irish Sugar Company for privatisation and Mr. Owen, who held a crucial position in British Airways at a time when it was being prepared for privatisation with the loss of 17,500 jobs. Is it any wonder, in the light of these appointments, that Aer Lingus workers are so secptical about assurances that the airline will not be privatised?
There must also be concern about the manner of Mr. Owen's appointment. The position was not advertised and the appointment was apparently made personally by Mr. Cahill without any reference to the board. It also appears that Mr. Owen's position will not be full time, that he will continue to pursue his interests in the private sector simultaneously with occupying such a pivotal position in Aer Lingus.
There is also a belief among many Aer Lingus workers that Mr. Cahill's proposals were withheld until the Labour Party conference was over, and that they are likely to be submitted to the Government over the next two-and-a-half weeks when the Dáil is not in session. It is important, therefore, before the Dáil breaks for the Easter recess that the House should speak with one voice in rejecting any proposal to privatise any part of the Aer Lingus group and in calling on the Government to provide the equity needed to re-establish the company on a sound basis.
Unlike the case with Digital or many of the other multinationals who have pulled out of Ireland or substantially reduced employment levels in recent years, the crucial decisions about the future of Aer Lingus will not be made in some far off boardroom in Boston or in Bonn, but around the Cabinet table in Merrion Street. The future of the Aer Lingus workers depends, not on some shareholders who could not be expected to have a commitment to this country, but on the members of our own Government. The two parties in Government must now live up to the commitments given to the public and to Aer Lingus workers during the course of the election campaign.
It is worth recalling that despite the difficulties it now faces, the record of Aer Lingus over more than five decades has been one of achievement and success. It has grown from modest beginnings to a position where it now has more than 14,000 employees — more than major private enterprise companies like Smurfit and Cement Roadstone.
It played a crucial role in the development of Irish tourism, in 1991-92 bringing more than one million visitors to Ireland. Two-thirds of all air passengers in and out of Ireland are carried by the company. It serves 45 routes in more than 11 countries and services eight regional airports within this country.
The collapse of Aer Lingus, or the impact of a substantially scaled down level of operation, would reverberate throughout the Irish economy. It would be a far worse scenario than Digital. Apart from direct job losses, there would be countless casualties in supplier companies. At a time when unemployment remains hovering in or around the 300,000 level, the consequences of not providing Aer Lingus with the financial support it needs are too awful to contemplate.
While the problems faced by Aer Lingus are extremely serious, they are by no means unique. The same factors which have plunged Aer Lingus into crisis have shot down many other airlines. One of the giants of international air transport, Pan AM is dead and gone. The combined losses among all airlines worldwide over the past three years is estimated to be in the region of $10 billion. The three big US carriers, Delta, American and United all had losses in 1992 ranging from $475 million ot $565 million. Our own GPA, the jewel in the crown of Irish private enterprise, is fighting for survival.
There is a number of myths about Aer Lingus which needs to be demolished. One, popularised by right wing economists and hostile politicians, is that Aer Lingus was the recipient of huge amounts of taxpayers' money. Minister Cowen was recently quoted as saying that "there will be no blank cheques" for Aer Lingus. The reality is that there were few cheques — blank or otherwise. Total investment from the shareholder in more than 50 years has been around £73 million and no money of any sort has been forthcoming since the mid-eighties.
In many respects Aer Lingus management have been operating in a "no-win" situation. They are expected on the one hand to run an airline which will compete successfully with private companies, but on the other hand they are subjected to various Government-imposed restrictions. Four weeks ago the Minister announced to the Dáil that he had given Mr. Cahill "executive responsibility to take whatever action is necessary with immediate effect to restore the company to commercial viability". However in the same paragraph he went on to say: "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". When he came to address the Dáil on the following Friday, this had been firmed up to "I have instructed the Chairman that Aer Lingus is to maintain a significant presence....".
One of the most unsavoury aspects of the Aer Lingus affair has been the way in which those charged with political supervision of the company have evaded their responsibilities and attempted to blame management and workers for the current difficulties. The management has been criticised for failing to make decisions, yet successive Government Ministers had the question of the Shannon stopover on their desks for years before the previous Minister Deputy Geoghegan-Quinn, made her announcement on the matter last October. The long indecision on the matter was most unhelpful to Aer Lingus at a time when its problems were mounting and, no matter what politicians think about the Shannon stopover, the company management sees it as a factor which is contributing to its difficulties. Aer Lingus management says it needs access to Stanstead, but the Government says "no", this privilege is to be retained for Ryanair.
Clearly as chief executive, Mr. Cathal Mullan, has to take a share of the responsibility for the company's problems, but the attempts to make him a scapegoat have been particularly out-rageous. Unfortunately this dishonest approach does not appear to have been restricted to Fianna Fáil members of the Government. In an article in The Sunday Press on 14 March Gerry Byrne wrote:
He (Cathal Mullan) had watched the knives being sharpened over the previous weekend after Labour leader, Dick Spring, ordered a series of leaks to Dublin newsrooms. Spring knew that his acquiesence at Cabinet level in a restructuring package for Aer Lingus which resulted in serious jobs losses and no large equity injection into the company could backfire on him. Labour had promised equity for the airline and the protection of jobs in its election campaign.
He goes on at some length to outline what he believes to be the Labour Party leader's duplicitous position on Aer Lingus. If these allegations are true — I have not seen any refutation of them — then they represent a totally unprincipled and dishonest attempt to mislead both the public and the Aer Lingus workers. Such an approach could only have the effect of demoralising the workforce, and was presumably an attempt to soften up opinion, both inside and outside Aer Lingus, on the cutbacks which Mr. Cahill will propose.
The Government clearly has no policy and no new ideas. It has failed to produce any national aviation policy and seems content to leave it to Mr. Cahill. It seems that what is happening, virtually by default, is that the company is being prepared for privatisation in full or in part, possibly to British Airways or to some other major player. How else can one explain the appointment of Mr. Owen? What agreements, written or otherwise, exist between Mr. Cahill and Mr. Owen? What commitments has Mr. Cahill given to Mr. Owen?
It is difficult to understand why Mr. Owen would settle for his role in a relatively small peripheral airline, unless he sees it as subsequently being sold off to a larger airline with him on board.
A strong national air carrier is essential for a variety of strategic economic reasons. It is particularly necessary to protect our tourism industry. Unless urgent action is taken by the Government it is hard to see Aer Lingus surviving other than as a small airline serving mainly regional needs.
As Deputy Gilmore has pointed out, if Aer Lingus is to survive as a national carrier a number of interrelated steps must be taken. There has to be a substantial injection of Government equity. There is no point in pretending that Aer Lingus can survive without it. It will be an expensive business, but the cost in economic terms of failing to save the company will be considerably greater. Unless there is a clear commitment to provide substantial equity we must presume that all that is on the Government's agenda is a plan to sell the company.
Equity on its own will not guarantee the long term future of Aer Lingus. As I said here on 12 March, we need to fight hard at European level for the development and operation of a European aviation policy which preserves diversity and ensures that peripheral regions retain viable airlines which are so vital to their economic development and to the Community objective of economic and social cohesion. There must be provision for national airlines like Aer Lingus to assist restructuring.
We also have to accept that with current trends Aer Lingus will find it more and more difficult to compete with the giants of air transport if it stands alone. It needs to establish a relationship with other medium-sized European airlines to help reduce costs. The trend is clear from the proposed merger of KLM, SAS, Swissair and Austrian Airlines which is planned for 1 January 1997. All of these airlines are owned, in part at least, by their respective Governments. Aer Lingus should, with the support of the Government, be considering either participating in this merger or at least some sort of link up with it. Such a move would clearly require total support by the Government at European level.
In conclusion, I am particularly disappointed with the amendment to our motion tabled by the Government. I would have thought our motion would have been acceptable to the Government, certainly if the pledges of the Labour Party Ministers and TDs were to be taken seriously. The Government amendment has nice things to say about the Aer Lingus workers, but kind words come cheap. I am sure that the workers would prefer an assurance that Mr. Cahill and Mr. Owen are not going to be allowed to chop up the company and sell it off in little parcels. The Government amendment has nothing new to offer. If anything should set the alarm bells ringing among Aer Lingus workers and any Labour backbenchers with even an ounce of cop on, it should be the reference in the amendment to an unspecified amount of finance being made available "subject to the constraints on the national finances". This is clearly an attempt to provide an excuse to get both parties off their electoral hooks.
As the Green Party, Comhaontas Glas, TD for Dublin North, I am keenly interested in and aware of the vital importance of Aer Lingus for employment in my constituency. I strongly support the terms of the Democratic Left motion. Having spoken to the staff of Aer Lingus on many occasions, the most recent of which was last Friday afternoon, I know that the calls to Government for adequate equity, the publication of an air transport policy and a rejection of privatisation are critical.
Last weekend the Labour Party promised to stand by Aer Lingus and inject significant equity into the company. The word "significant" is significant in this respect. Will equity for Aer Lingus be pro rata to that announced for GPA? If it is, Aer Lingus is set to receive approximately £300 million. Is employment in GPA any more valued than employment in Aer Lingus? Of course not, because that would not be fair. Therefore, can I assume that a minimum of £300 million will be given in equity to Aer Lingus?
It is time for some honest explanations of the Government's precise intentions in regard to Aer Lingus. Aer Lingus has an obligation to its passengers and the Government has an obligation to Aer Lingus. Part of the Government's obligation is the publication of a comprehensive transport policy and, in this case, a detailed air transport policy. The lack of a comprehensive transport policy is costing our national airline business and revenue, as are the two Boeing 767 aircraft stranded at Dublin Airport in expectation of a policy which never was.
I do not mind saying that Aer Lingus staff were apprehensive when they saw Mr. Cahill, Mr. Owen and Mr. Buckley joining the management staff of our national airline. I wish to refer to the press release on Mr. Peter Owen's appointment as chief executive of passenger services, which defines his key task as being part of a "robust senior management team". The sentiments expressed remind me of the words used to describe a particularly rough county football team which I will not name as I still have friends living in the area. Mr. Owen is quoted as saying that he is looking forward to working with the executive chairman on this "onerous task", this makes me wonder if the sense of co-operation which ought to exist between management and staff is to be sacrificed in the same way as it was in British Airways, Mr. Owen's old company.
These are not just my opinions; these opinions are voiced and considered every day by the staff in every department of Aer Lingus. In the normal course of events such uncertainty would demoralise a lesser company and the effects of this would be seen in a lower standard of customer service. However, Aer Lingus has a priceless irreplaceable quality. As ambassadors abroad Aer Lingus gives far more in value than it has ever received from this or previous Governments. Privatisation would not only cost this country dearly because of the loss of a presence abroad, where so many Irish people live, but the cost of maintaining the staff who are made redundant makes no sense from an economic point of view. Coincidentally, a letter from an Aer Lingus passenger in today's Irish Times illustrates the need for the Government to stand by Aer Lingus, as proposed in the motion. The passenger refers to a flight from Canada he was on, and I quote:
While current economics of the airline business may have caused some business uncertainty, it has had no apparent effect on customer service, which is clearly the mark of quality employees, in a quality company, doing a quality job.
With regard to the entire crew ... I'm sure the other 272 people on board as well as the other employees who wear the Aer Lingus uniform would be happy to join me in congratulating them for a job well done.
I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
—acknowledging the contribution which Aer Lingus and its staff have made to the Irish economy since the company's establishment, particularly in the development of Ireland's trade and tourism;
—noting the commitment in the Programme for a Partnership Government to ensure the commercial future of Aer Lingus as part of overall air transport policy,
endorses the Government's policy as being in the best interests of the Irish economy and supports the Government's decision to provide, subject to constraints on the national finances, sufficient support for Aer Lingus when a viable and convincing strategy for the future of the company has been put in place.
It is understandable that there is a widespread concern about the problems which must be addressed in Aer Lingus. The national airline has always enjoyed a high profile and it is, therefore, equally understandable that many voices should be raised in both expressing legitimate concern and suggesting solutions, or at least approaches to solutions to the company's problems. At the end of the day, however, the political initiative and responsibility rests with me as Minister for Transport, Energy and Communications. Given the national dimensions to the dilemma faced by Aer Lingus I will, of course, be sharing both my analysis of the problem and my proposed solutions with my colleagues in Government.
Since assuming responsibility for the company on my appointment as Minister for Transport, Energy and Communications I believe that both the approach I have taken with the company and my public statements have been consistent at all times. This consistency predates my appointment. The basic policy line adopted by my party prior to the formation of the Government was set out very clearly.
The Taoiseach in his speech at the launch of the Fianna Fáil manifesto before the general election last November said, "We cannot and will not allow Aer Lingus to flounder". The Taoiseach at the same time went on to say that "We must have a viable programme that we can back".
Let me make it clear at the outset that I am totally committed to implementing the policies of the national partnership Government in the transport field. One of these commitments set out in the Programme for Government is, "to ensure the commercial future of our national airline as part of our overall air transport policy". This commitment will be honoured in full.
One myth that irks me as Minister for Transport, Energy and Communications is that Ireland has no aviation policy. Some people have tried to portray us as working in a policy vacuum. That simply is not true. We have now, and have had for some time, a consistent and coherent framework within which we have developed the Irish aviation sector, with considerable success.
Let me start by placing on the record of this House what the objectives of this policy are. I will do so under seven broad headings: (1) to improve competitiveness and thereby facilitate job and wealth creation in Ireland by providing a wide range of reliable and regular commercial air services for Irish tourism, trade and industry, at the lowest economic cost; (2) to promote direct job and wealth creation in the Irish airline and aviation industry through opening up new markets for Irish operators (e.g. Aer Lingus, Aer Rianta, GPA) either in bilateral or multilateral negotiations; (3) to have at least one domestically based and financially viable national airline to ensure continuity of air services between Ireland and all our main export markets. In effect, this means a strong Aer Lingus, not because it is Government-owned but because it is the one Irish airline which has the critical mass, expertise and best range of products to achieve this aim; (4) to ensure, in so far as possible, an equitable distribution of airline traffic to Shannon, Cork and the regional airports to support the Government's policy of promoting balanced regional growth within Ireland; (5) to ensure that all Irish airports are cost competitive and have infrastructure of the highest international standards to meet the needs of the international airline industry; (6) to ensure the maximum utilisation of our national airspace asset; (7) to ensure that the standards, safety and security of aviation inspire confidence in the use of Irish airspace and technical infrastructure by air carriers.
These objectives have been formulated against the background of: (1) the international economic regulatory environment which has become more deregulated and liberalised; (2) Ireland's peripheral geographical location within Europe; and (3) national agreements with the social partners where the emphasis has been on expanding existing air services, introducing new services and ensuring access costs are competitive in the interest of both tourism and business travellers alike.
The rate of growth in the air transport industry worldwide has accelerated significantly in recent years. Over the past decade the world air travel market grew by 7 per cent annually as a result of increased demand arising from higher incomes in industrialised countries, declining air fares in real terms, regulatory change that enhanced competition and Government policies to stimulate tourism. This rate of growth was faster than the general growth in the world economy over the same period.
While initially we lagged behind this upsurge in world activity, we have, since the mid-eighties, outperformed other countries in terms of wealth and employment creation, as a result of the very innovative policies implemented by Government. I will give a few statistics to prove this: visitor numbers to Ireland rose to almost 3 million per annum in 1991, an increase of over 50 per cent on 1987; over 23,500 jobs have been created in tourism between 1987 and 1991; increased income generated in both the tourism and air transport sectors has amounted to over £500 million since 1987; travel by business travellers has increased by almost 50 per cent since 1985, which undoubtedly has helped our merchandise export drive and at least 3,000 direct jobs have been created by all participants in the air transport and related industries since 1987. Aggregate turnover today in the air transport sector in Ireland is now in excess of £1 billion.
Airlines, internationally, including those serving or wishing to serve the Irish market, now have much greater commercial freedom in their operations and the consumer has greater choice. Effectively, an open skies regime operates in Europe, though in a more balanced way than in the United States. The policy of the United States administration is for an open skies regime internationally and it is seeking to renegotiate its bilateral agreements to this end. It has already done so with some countries, notably Japan and the Netherlands.
The trends of recent years have opened up new opportunities for Irish aviation. However, there are also costs involved for Irish airlines. The aviation industry in Ireland is now broadly in the same position as any other traded goods sector. Irish operators now have to compete in the domestic and international markets both with other Irish and foreign competitors. Moreover, market conditions have changed from high cost/low volume to low cost/high volume.
The situation today is that most traffic to/from Ireland originates from or is destined for Britain or continental Europe. Since 1 January 1993, there is almost complete liberalisation of air services between Ireland and Britain and continental Europe. That is a fact of life which, whether we like it or not, we cannot change.
Under current EC regulations any EC national can set up an airline in Ireland or elsewhere in the EC on meeting certain financial and safety criteria; any EC airline can fly on any route within the EC into any Irish or EC airport and without any restriction on frequency provided slots are available; Community carriers can now set their own fares, without Government control; safeguards have been put in place to eliminate unfair competition in the market, for example, abuse of a dominant position, excessively high fares or predatory pricing; the rights to operate internal services (cabotage) in another member state, is being phased in over the four years to 1997 and EFTA countries, apart from Switzerland, will be given similar rights in 1993.
In the Dáil, on 12 March 1993, Deputy De Rossa said:
As far as Democratic Left is concerned, a national aviation policy should be based on one Irish national airline, Aer Lingus. There is no basis for more and any other policy will almost certainly lead to us having none at all. With deregulation in Europe almost complete, anybody who argues that we need another Irish airline to provide competition either wishes to sabotage Aer Lingus or is out of touch with reality.
Deputy De Rossa's comments ignore the reality of the EC Single Market under which, as I have said, any European airline, be it Irish or not, can service the Irish market provided it meets certain conditions, I have outlined.
Governments, including the Irish Government, no longer have the authority to regulate air transport in favour of their own carriers. Governments cannot stop a carrier setting up services on any route it wishes or charging any fare it likes, provided it is not a predatory price from a dominant carrier.
The role of Governments is no longer one of regulation or control but to ensure that competition in the market place operates in a fair and open manner. I can, however, assure this House that I will be vigilant in ensuring that the competitive conditions in which Irish carriers operate are fair and equal to all. I will vigorously pursue any abuse in the market and use my powers to have the EC Commission fully investigate any complaints.
These Single Market conditions were not introduced overnight. In Europe, the most significant initiative in the liberalisation of air transport came in 1984 when the EC Commission produced wide-ranging proposals for changes in the regulatory system. These proposals covered areas such as air fares, capacity sharing and market access to limit the effect of commercial and price agreements between airlines, with the long term objective of creating a common air transport market.
Following these developments, the EC Council of Transport Ministers, under the Irish Presidency in 1984, adopted a set of guidelines for the first steps in the liberalisation of air transport in the EC. These guidelines resulted in the adoption in 1987 of the first set of measures to liberalise European air transport on a gradual scale and led finally to the introduction of a Single Market in Europe from 1 January 1993.
Recognising that change was on the way, successive Irish Governments took a number of initiatives in the late 1980s to: (1) prepare the Irish industry for increased competition from foreign carriers; (2) seek out new opportunities for Irish airlines to expand in a more open and competitive system; (3) enable the industry to respond to growing demands for travel at lower cost, and (4) to create a more competitive environment reflecting world trends.
I should say that all sectors of the industry, as well as trade unions, have been consulted on these developments. In 1988, Aer Lingus used the fifth freedom opportunities won for them by the Government in negotiations on EC liberalisation measures to route many services to Continental Europe via Manchester in an attempt to make Manchester a secondary hub for the airline. In addition, as a result of concessions won in EC and bilateral negotiations with EC partners, frequencies on existing Aer Lingus services to Britain and Continental Europe were greatly expanded over this period. Over this period, also, Ryanair were licensed as a second Irish carrier to operate air services to and from Ireland.
Over the past few years we have been consistently seeking new markets and opportunities for Irish aviation. These have not been confined simply to rights to operate air services. We are also consistently seeking training, maintenance and leasing business for Aer Lingus. In addition we are also actively pursuing new business opportunities across the whole spectrum of Aer Rianta's activities.
Let me give a specific example. Last week I signed an air agreement with the Russian Federation and with the Republic of Belarus. I used the occasion of my visits to Moscow and Minsk to identify new areas of business opportunities for Aer Lingus and Aer Rianta. The Minister for Transport of the Russian Federation and the Deputy Prime Minister of the Republic of Belarus, accepted a proposal from me to establish high level official working groups with both countries to identify specific projects which can be undertaken to our mutual benefit. I expect the first meetings of these groups to take place in Ireland within the next month. These recent talks are but one example of our efforts to develop opportunities for Irish aviation. The Government will continue to support the commercial development of Irish aviation and aviation-related activities which can make a substantive contribution to increased employment in Ireland.
The task force report on the aerospace industry in Ireland has already pointed the course for future development in this area. This task force was established in June 1990 to investigate the future potential of the industry in Ireland, to identify new business opportunities and to draw up an action plan for the development of any such opportunities while removing obstacles to growth. The task force was widely based with its membership selected from major firms in the core maintenance and repair segments, smaller manufacturing and software companies and the various State agencies dealing with the sector. The task force reported in July 1992 and estimated that over 6,000 extra jobs could be created mainly through expansion of existing maintenance, overhaul and repair activities along with new spin-off projects from these. The Government is pursuing the implementation of the report's recommendations through the relevant State agencies.
As I said in this House quite recently, and I reiterate it today, I believe that it is in Ireland's strategic interest to have Aer Lingus as a substantial airline to serve Irish trade, tourism and overall national needs.
There is a perception in some quarters and promulgated in others that members of this Government individually or collectively are anti-Aer Lingus, that they are indifferent about the future prospects of the employees of the company. Successive Fianna Fáil led Governments, since the establishment of Aer Lingus, have nurtured the company, firstly as the sole and later as the major national carrier and supported its expansion into ancillary areas outside the core activity. As the problems of this company are to be confronted I have placed on the record, as has my predecessor, our acknowledgement of the contributions of the staff of Aer Lingus and of the sacrifices they have made over the years. One of the Government's main concerns is its consideration of the financial difficulties facing Aer Lingus has always been to ensure the commercial future of the company. This is the only way we can sustain long term employment in the company.
The financial difficulties facing Aer Lingus are not insurmountable. Nevertheless, they are very significant. The core business, air transport, excluding once-off items, will show a loss of over £40 million for the financial year just ended. That is the fourth consecutive year in which air transport, has made a loss. In addition to the ongoing losses, the group currently has debt in excess of £500 million, with an annual interest bill of around £50 million.
Aer Lingus' ancillary activities have in the past been able to cross-subsidise the air transport operations. However, these, too, have been hard hit by increased competition and the international economic recession. Companies like TEAM Aer Lingus and Airmotive must operate in what is now an increasingly competitive international environment. In addition, the hotels are pro-cyclical with the airline business.
Any strategy for recovery must focus on the core business of Aer Lingus: in other words, the airline. Because of our island status on the periphery of Europe, access transport in general and air transport in particular are crucially important. Aer Lingus is the predominant carrier serving Ireland. It has made a significant contribution to the Irish economy in terms of employment, tourism development and in aviation related industries. There is no doubt that Aer Lingus has a sound national and international track record. However, if this is to continue its present problems must be addressed. Aer Lingus can maintain its primary position at the centre of Irish aviation. To ensure this, the airline must be commercially viable and must operate to standards which are comparable with its competitors. Otherwise, it will not have a sustainable future.
As I, and previous Ministers, have consistently pointed out, the primary responsibility for ensuring the commercial viability of Aer Lingus rests with the management and board of the company. The Government has asked them to ensure that, in keeping with the spirit of the Programme for Economic and Social Progress, there should be the fullest possible consultation with staff before major policy proposals in relation to the future of the company are formulated.
The Government's role, as shareholder, is to assess strategies adopted by the board. This assessment, including a decision on the appropriate level of equity injection to which we are committed, must be in conformity with EC guidelines and also take account of the constraints on the public finances and our wider responsibilities to the taxpayer.
Given that their main competitors have transformed, or are in the process of transforming their organisations into cost effective operations, it is imperative that Aer Lingus pursue the same strategy. Otherwise a permanent uncompetitive structure will remain and the airline will not survive in its present format. The future development of the company will be determined by its ability to compete in an increasingly competitive world.
When appointing the executive chairman, I indicated to him that the Government wishes Aer Lingus to maintain a significant presence on the transatlantic routes and to do so in the context of the existing policy on the Shannon stopover.
The Government has made it clear that, subject to the constraints on the national finances, it is prepared to provide sufficient support for Aer Lingus, provided a viable and convincing strategy for the future of the company has been put in place. I will insist that this be done because, as I stated in the Seanad, I am not prepared to contemplate the elimination or disappearance of this company.
As the House is aware, any investment of equity by the Government in Aer Lingus must be approved by the EC Commission. I have already had a meeting with Commissioner Van Miert in Brussels to discuss EC competition policy issues as they apply to State investment in Aer Lingus. Commissioner Van Miert reconfirmed that any State aid could be considered by the Commission only in limited and exceptional circumstances and in the context of a comprehensive restructuring of the company. It was also confirmed that any such investment could be made only on the firm and clear understanding that it would be for a necessary once-off restructuring by the company to ensure the early return of its airline business to full commercial viability.
The original motion before us refers to the implications of the most recent senior appointments and resignations in the company. I must point out that management appointments are a matter for the board of Aer Lingus. I have no function in such appointments.
In announcing the appointment of the executive chairman and in other statements since then, I have emphasised that a partnership approach is essential if Aer Lingus is to overcome its present difficulties. Everybody in the company must be prepared to shoulder their responsibilities. The Government, too, will face up to its responsibilities as shareholder. In this connection, let me say that the degree of consensus and commitment emanating from discussions between the management and the unions will greatly influence the Government's attitude towards the degree of support it can provide for Aer Lingus. There is a need for imagination and flexibility by all concerned. No options should be ruled out for consideration.
Aer Lingus has always been assured that any proposals such as service contracts, joint venture agreements and marketing alliances would be carefully considered by the Government in the context of the recovery of the company to sustained viability.
I am convinced that, with the good will and determination of all the parties, Aer Lingus can overcome its current difficulties. The company must come forward with realistic proposals which will ensure it has a commercially viable long term future. Aer Lingus employees want this. The Irish people want this. This Government will ensure it happens.
Aer Lingus did it before. With the necessary commitment of all concerned, it can do it again.
My giving a specific figure in the absence of a viability strategy being put in place simply would not be accepted by the European Commission, and Commissioner Van Miert made that very clear. It was also made clear that any equity injection would be made in the context of such a viability proposal being put in place and its being evident that the proposal was sufficient for the making of a once-off equity injection that would ensure the commercial viability of the company. The Government is committed to that position, but the viability proposal and the viability strategies must be put in place.
Since the House last discussed the matter fora have been established, consultations are taking place and there is a management commitment to consult the unions and the representatives of the workforce at all stages before the formulation of major policy proposals, so that everybody has a say in the future of the company and those who have a stake in the company have their say. That is something that I, as a former Minister for Labour, would insist upon, quite apart from the fact that it is an obligation under the Programme for Economic and Social Progress. That obligation will be honoured.
The time for putting the viability proposal in place is now. The discussions are taking place and will continue to take place. The company must be allowed to deliberate on those options and come forward with every possible positive, imaginative proposal to ensure that the maximum number of staff cosistent with the viability of Aer Lingus is kept working in that company. That is what is wanted by everybody who has an interest in Aer Lingus — and I accept that everybody has a genuine interest in the future of the company, given its strategic importance to the Irish economy. Steps cannot be taken in isolation. We must be sure that the necessary viability proposal is put in place.
The Government stands prepared to support Aer Lingus, subject to the constraints on the public finances which are there — and which are there for anybody, no matter what service is provided or what company it is wished to support. I cannot give an indication any more clear than that, given that State aid can be directed only in the context of viability proposals being put in place and being agreed and the viability of the company being assured by the undertaking of the new proposals that will be agreed between the workforce and the management and approved by the board of Aer Lingus. That is what we all want.
The company should be allowed to get down to the business of coming forward with those proposals, and it is now doing so. I am confident — not for one moment underestimating the difficult decisions that have to be taken for the future of the company — that, with a positive effort being made by everybody, an atmosphere has been created within the company that will ensure that everybody will do whatever they can to come forward with the decisions necessary to ensure that the company has a future. That is my hope and I, as Minister for Transport, Energy and Communications, await advice of these decisions. I have asked that the decisions come forward as quickly as possible. I do not believe that there should be any prevarications but I also understand that the magnitude of the problem is such that time spent in consultation with the workforce will be time well spent in the process of making the necessary proposals that will result in the company having a viable future. Both parties in Government are committed to the viable future of Aer Lingus. Once the Government has before it the necessary viability proposals it will be in a position, as shareholder, to assess prudently what is available on behalf of the shareholder as part of the Government's contribution towards the future development of Aer Lingus.
Aer Lingus is a major carrier in Ireland and it is of strategic importance. Decisions have to be taken. There are no easy solutions. I am glad that the decision-making process is now under way within the company. There is full consultation at all levels of the company. When I last came to the House on this matter I was seeking full consultation. That has been achieved. I now await the necessary viability proposals and I have great expectation that the company will provide imaginative solutions to the serious problems — which problem will not go away, however much we would like to wish it away.
Aer Lingus has to operate in the environment in which all international airlines now have to operate. The present economic circumstances make it very difficult for the aviation business generally. However, Aer Lingus can chart a future. I believe that the company has a future. The Government will stand with the company in providing whatever equity it can prudently provide in all circumstances, but the viability of the company must in the first instance be assured. The process of ensuring the company's viability has begun, the consultation is ongoing and, as I have said, I await the deliberations of the company so that I can advise the Government on the position.
I should like to share my time with Deputy Nora Owen, Deputy Donal Carey and Deputy Ivan Yates.
Is that agreeable? Agreed.
There is a woeful amount of hypocrisy on the side of the Government parties in this debate. The Government behaves as though the problems evident in Aer Lingus are none of the Government's making. That is not the case. The Minister and his Deputies quote the new mantra that airlines must compete in an open market in which the Government can no longer intervene. That seems to be the cover for the Government's standing back entirely from Aer Lingus. There is apparently no Government recognition that it was the Government that insisted on pressing fares down below economic levels, which contributed to the present losses. When Aer Lingus appeared before the Oireachtas joint committee the company made it clear that the Government's pursuit of tourism growth and the pressing down of fares was a major factor in the company's present losses. Equally, it was the Government that insisted on the Shannon stopover.
Aer Lingus has detailed in great numbers of submissions made to this House the effects that the stopover policy is having on the company's ability to make progress on the transatlantic route. It is known that Aer Lingus has had to shelve plans for developing part of that route specifically because of the company's inability to service the Los Angeles route if a stopover is insisted upon. Today and in the past month or so Aer Lingus has been told that it must continue to operate the Shannon stopover and must continue on the transatlantic route. There is no Government recognition whatsoever that Aer Lingus is currently losing £20 million on the transatlantic routes and, if it is to continue — as the Government indicates it is — it will have to find £400 millions in fleet replacement costs. The Government is dwelling in unreality. I see many Government Deputies, particularly from Fianna Fáil, pointing the finger at the management of Aer Lingus, saying what mistakes they have made. But the reality known by everyone in this House is that every investment decision on the part of Aer Lingus costing more than £5 million must be approved by Government. That has been the convention in all of these State companies and was throughout the years when decisions were taken that many on that side of the House, particularly within Fianna Fáil now find consolation in criticising.
What we are seeing now is the Government seeking to ignore the entire history of Aer Lingus and how its problem grew, sitting back smugly with its arms folded, proclaiming the new market economics era. That is just not acceptable. It is not acceptable to the workers in Aer Lingus and is not consistent with what was said to them before the general election by the two parties now comprising the Government. It is not an acceptable approach to dealing with what is a major problem.
The Minister in his contribution this evening said he would deal with the fact that many people have criticised the lack of an aviation policy. I searched high and low throughout the Minister's remarks to ascertain what were the new strategic directions of aviation policy that were to be adopted. There was not one. The Minister appears to mistake the stating of objectives with having a policy, probably the oldest mistake in the book on the part of Ministers here, who think that having a glossy list numbered one to seven of laudable objectives constitutes a policy. It just does not. The Minister, having stated those objectives, happily ran to cover on the attitude: "Do not blame me; I am only holding the reins to make sure that everyone out there behaves fairly". That is not acceptable. The Minister has responsibility for critical strategic issues without which the management and workers of Aer Lingus cannot hope to formulate a proper response to their present crisis.
We have already heard about the issue of equity. Obviously the Minister is not expected to name a figure before sitting down and talking it over with the unions and management. But we have been told until we are blue in the face by this Government that this is a Government founded on partnership. Aer Lingus workers rightly expect that the concept of partnership means that the Government provides the forum whereby the three parties involved — Government, management and workers — sit down, examine these issues and come up with a strategic response. That is what they have asked. That is what they were told would happen, by the Labour Party in particular. That is what is being spectacularly denied them and reiterated in the Minister's remarks today in which he sees his role as simply waiting until all the painful decisions are taken when he will decide in his wisdom whether some money might be made available.
There are many other strategic issues that have a critical bearing on the decisions facing Aer Lingus workers. For example, can support for mobile investment be secured? Is that now gone? Has the Government entirely sold the pass on that issue? Can tourism growth continue in an environment in which henceforth the fare policy is to be maximised revenue? We have traditionally had a fares policy, promoted strongly by Government, that we should keep fares down to promote tourism. We know that Aer Lingus is a short-haul carrier, has high seasonality on its routes and a very bad mix of passengers between tourists and the high revenue business client. Apparently Aer Lingus will be forced by Government to shed its ancillaries, which seemed to be reiterated by the Minister today when he described these ancillaries as pro-cyclical, which I take as a code for saying they must be sold off.
Can a short-haul carrier of this type survive as an national airline, which is the objective the Minister claims? Can that be done? How can it be done? These are the issues on which we expect answers. We expect to hear from the Government what is the strategy for airport charges. We expect to hear from the Government how in a deregulated environment a company like Aer Lingus can secure the joint ventures or the strategic link-ups that will allow it survive in a world that is being ever more dominated by mega carriers. We want to hear from Government how it envisages those alliances being forged at a time when many airlines are in very deep difficulty, when there is no great outlook or queue of companies seeking to participate with Aer Lingus in the future.
When the Minister says he has a policy of securing the commercial future of Aer Lingus we expect to hear from him how that can be done, not to hear that he is now handing that over to the workers and management of Aer Lingus, led by a chief executive who has an absolute open brief to do anything about disposal of assets, about fares and that the Minister has washed his hands of them. That is why people feel frustrated. Indeed, it rings very hollow to hear Labour Party Deputies go to their conference and bleat on about the problems, when they are in Government and sitting around the Cabinet table. After all, they were the people who told us here, in a motion tabled in this House, that there should be no decisions taken on employment in Aer Lingus until a national aviation policy was laid before us so that we could study the strategic direction this industry was to take and how Aer Lingus, as a critical national airline, was to survive in that context. It was the Labour Party who told us that that could be done in four weeks. We are now at a juncture at which that must be done within a very short period. But I have heard nothing from the Minister to indicate that that is being done.
In the short time remaining to me I must repeat that partnership is a two-way street. The Minister cannot expect the workers and management of Aer Lingus to sit down and solve these problems without knowing what will be the Government input in so many critical areas. The Minister and Government are expecting Aer Lingus to continue to provide a social service, such as the trans-atlantic route on which they are losing money, and the social service entailed in stopping at Shannon on which they are also losing money. The Minister cannot then just step back and say "You have to run the thing now. It is now a free market. I have just to ensure that there is fair play between all of those out there competing in the field". That is not sufficient and the workers in Aer Lingus will not accept it.
I was disturbed to hear the slightly threatening tone of the Minister's remarks on the level of consensus emerging from discussions between the unions and management. The Minister and I know that the unions and management alone cannot resolve these issues. Therefore, for the Minister to introduce that sort of veiled threat in the context in which he will play his part is not acceptable.
I am very disturbed. This Government rejected a plan in which there were to be 850 man years lost through restructuring this company. The inescapable conclusion is that this Government expects there to be substantially greater job losses. I read what we have heard here today from the Government as an effort by the Government to pull back, hide behind the coat tails and dresses of the EC as the people telling us "We cannot intervene. Our hands are tied. This will happen beyond our control". That is not the position. There are many issues that a Government can address. The Minister should let us know what is his strategy and then sit down with the parties involved and work out a survival plan.
This is the fourth successive occasion on which the Minister has had an opportunity to come into this House and reveal a little more of what is his strategy vis-à-vis Aer Lingus. Once again he is hiding behind historic accounts of the company, various platitudes, statements of support, interest, the necessity for viable plans and so on. Nothing in the Minister's remarks this evening will help the staff of Aer Lingus understand precisely where the Government is going. The Government continues to leave the workers of Aer Lingus in the dark about its real intentions for the future of the company.
As Deputy Richard Bruton has said, at the Labour Party Conference last weekend we heard Labour Party Deputies and delegates, such as Mr. Bill Attley, voice demands for equity for Aer Lingus. To my mind that begs the question: why do they need to continue to make such demands? Is it because their own Ministers have not managed to convince them that the Government is firm in its resolve to give equity to Aer Lingus? For example, why do people like Deputy Seán Ryan have to continue to place a question mark after any statement they make about Aer Lingus such as: will the Government agree? Will the Government say? Will the Government commit and so on? Surely Deputy Seán Ryan can approach his Fianna Fáil and Labour colleagues in Cabinet and obtain a firm commitment so that he will not have to continue to place question marks after such statements. The Government knows that equity will be required. A valid question put to me by the unions representing the workers was: why can they not say how much they are prepared to put into the company so that the viability plan can be based on knowing the proposed bald equity figure? Is the Government hoping that the Bernie Cahill master plan will advocate harsh measures such as the loss of hundreds of jobs and the sale of the company's assets at a bad time and at prices below their true value? The Government could then step back and say that the viability plan saves everything it wants to save in Aer Lingus and bow out in relation to any commitment to provide equity. The Minister may be hoping that Mr. Cahill and Mr. Owen will be able to present him with such a plan so that the Government will not have to provide any equity.
The Minister stated that the primary responsibility for ensuring the commercial viability of Aer Lingus rests with the management and board of the company. If this is so, it begs the question why did the Minister not adopt any of the plans presented to him and to his predecessors by the board and management? The chairman is the same man who agreed to those plans and put them to the Government as viable plans for Aer Lingus and if it is its responsibility to make commercial decisions one wonders why the Government turned those plans down. The reason is, as Deputy Bruton has said, that the Government feels there is a need to take harsher measures in Aer Lingus, such as further job losses in addition to the loss of more man-hours.
If the Minister is so certain that the primary responsibility for ensuring the commercial viability of Aer Lingus rests with management why have both he and successive Fianna Fáil Ministers tied the hands of management? Many of the problems confronting Aer Lingus can be attributed to what has been described to me as the "dialogue of the deaf" which Aer Lingus has had to participate in with the chief shareholder that is, the Government, for the past five years or so. Successive Governments, led by Fianna Fáil Ministers, have been deaf to the demands of Aer Lingus. While things were going reasonably well for Aer Lingus and it was making profits the Government did not have to listen to the warnings given by the management of Aer Lingus that if there was a downturn in the aviation industry, which they foresaw, and if it had to meet the cost of new aircraft the effects would be disastrous. The international recession has impacted heavily on Aer Lingus.
If the Labour Party was in Opposition its members would be present in the House tonight calling for an air transport policy to be introduced. They called for such a policy to be introduced before the last election but now it seems to have vanished like the snows in spring. It has decided that one can work in a vacuum. In the absence of an air transport policy — not just seven pious platitudes — any decisions which the Minister will have to make on the Bernie Cahill master plan will be made in an ad hoc manner and may not take into account the long term interests of the company. If the Minister does not know what air transport policy should be how will he be able to make a good balanced decision on any viability plan presented to him?
For example, can the Government tell us if we will continue to have two Irish airlines? The Minister has already told us that the primary responsibility for ensuring the commercial viability of Aer Lingus rests with the management of the company but the Government has been dictating some of the policies that Aer Lingus should follow, such as which airports it can fly into, which routes it can develop and then hand over to another airline. These decisions are taken by the Government. The management of Aer Lingus have told us that they have had their hands tied behind their backs when they have tried to do what successive Governments wanted them to do, which is to operate commercially, but they cannot do this if certain decisions are made for them. That is what has been happening and that is what the Minister has done to Mr. Cahill. He has said to him that Aer Lingus must continue operating transatlantic flights and it is not allowed to change policy on the Shannon stop-over.
For how long does the Government intend to ignore the effects the Shannon stop-over policy has had in terms of the viability of the transatlantic route for Shannon Airport if he does not want to consider the question of allowing direct flights into Dublin and for how long will the Government continue to ignore the realistic question as to the reason Dublin and the east coast are not allowed their share of transatlantic passengers who wish to fly directly to our capital city? For how long more does this divisive debate have to continue? The Government has said that even if one aircraft is allowed to fly directly to Dublin, Shannon airport will collapse. However, the Minister knows that this is not true but the Government has decided for political reasons not to grasp the nettle and to examine it. Any viability plan which does not consider this question is only a half plan.
What about the Deputy's own policy?
Even the strongest advocates of the Shannon stop-over policy recognise that if there are no transatlantic flights there will be no need for such a policy. I ask the Minister and the House does it not indicate a lack of confidence in Aer Lingus and in the Shannon stop-over policy that in recent times both the Taoiseach and the Minister for Enterprise and Employment, Deputy Quinn — who flew out to Boston on a Saturday — did not fly to America on scheduled transatlantic flights via Shannon? Can one imagine the message that was given? I am not making the argument that we should not have a Government jet but rather suggesting that both the Minister and the Taoiseach could have taken an Aer Lingus flight to America via Shannon. Can one imagine the confidence that would have been given if a photograph had appeared in the newspapers of the Taoiseach standing beside the Aer Lingus Jumbo before leaving on a scheduled flight? However, he did not do this and I have to suggest that there is a big question mark hanging over the Taoiseach's respect for the Shannon stop-over policy. As we are aware, shortly after he became Taoiseach he said in an interview in the Dublin Tribune that this policy would be phased out.
I am questioning the Government's commitment to the continuation of trans-atlantic flights as I do not believe that such a commitment exists. Any viability plan devised for the national airline would have to encompass a comprehensive examination of all aspects — one cannot dine à la carte while preparing a viability plan for the company. As I said, everything will have to be examined: Government action vis-à-vis Ryanair, the Shannon stop-over, the retention or sale of hotels and other ancillary activities of the airline. We cannot tie Mr. Cahill's hands but this is what the Government has done. The Minister stated that no options should be ruled out for consideration. That is an all-encompassing statement. Do the Labour Party Ministers agree with it?
Is that not what the Deputy has said?
I am saying it but I am asking the Minister if his partners in Government agree with that statement. Do these options include joint ventures and privatisation?
It is all in the script; privatisation is not mentioned.
Can the Minister tell me if the Labour Party Ministers agree with that statement?
Do they know about it?
The Minister has said that the viability plan cannot be based on a partial examination but he has already sown the seeds of failure given that he has told Bernie Cahill that he cannot make any changes in two areas — on the transatlantic route and in relation to the Shannon stop-over policy. I call on the Government again to go beyond the pious platitudes expressed by the Minister in his last three contributions and again tonight and to come clean and outline the real proposals and policies to ensure the future of our national airline and the jobs of its many thousands of workers.
Deputy Carey.
This is the Shannon wing.
He does not speak with a forked tongue.
I am glad to have this opportunity to express my support for the continuation of the transatlantic service which Aer Lingus has provided, from Shannon Airport in particular. When I last spoke in the House I commended the Minister for indicating to Mr. Cahill that what is euphemistically described as the Shannon stop-over by the Fly Dublin Direct lobby should be continued. So far as I am concerned, Shannon Airport is a major asset to the mid-west region and the west coast. The low number of Aer Lingus trans-Atlantic flights that fly into Shannon Airport make it viable.
Debate adjourned.