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Dáil Éireann díospóireacht -
Thursday, 10 Dec 1998

Vol. 498 No. 3

Ceisteanna — Questions. Priority Questions. - Aer Lingus Strategic Alliance.

Ivan Yates


1 Deputy Yates asked the Minister for Public Enterprise if her attention has been drawn to the discussions between Aer Lingus and Lufthansa in the context of Aer Lingus joining the STAR alliance; if she, as an acting shareholder, has been involved in any such discussions; the conclusions or decisions, if any, reached on the matter; and if there is a proposed timetable for her to report to the Government or Dáil Éireann on a future strategic alliance for Aer Lingus. [26894/98]

I am glad Deputy Callely has such influence over the Minister for Finance. I wish him luck.

It happened.

I refer Deputy Yates to my replies to a number of parliamentary questions taken on 30 September 1998 and 10 November 1998.

The position as outlined to the House on those occasions remains essentially unchanged. As I stated, the Government agreed in principle in September that Aer Lingus should seek a partner, that the partnership could be equity based and that the process could move to the next stage which would include discussions with other airlines. As I indicated in September, this stage could take up to six months.

While I have regular contact with the Chairman of Aer Lingus, there are no specific developments to report at this time. Aer Lingus is currently undertaking discussions with a number of prospective partners of which, I understand, Lufthansa is one.

Neither my officials not I are involved in these discussion, the purpose of which is to generate proposals for my consideration and that of the Government in due course. Shareholder involvement will, of course, be a major feature of the next phase of this process, perhaps from March or April next year, and depending on the options which the current phase generates.

Does the Minister agree that, as a shareholder and the person accountable to this House, these are valid questions about public policy? Is the Minister aware of detailed reports of statements made by the Chairman and Chief Executive of Lufthansa, Mr. Juergen Weber, that detailed discussions are taking place between Aer Lingus and Lufthansa and that such discussions are on the basis of Aer Lingus joining the STAR alliance? Will the Minister clarify whether discussions are taking place with one group only, because the previous reports were in relation to British Airways?

If the discussions are in regard to the STAR alliance, do they concern a marketing and seat sharing alliance as an affiliate member or full blooded equity involvement? This may not be finalised but I would like the Minister to tell me down which road we are heading. Are we still at the crossroads between one group and another or are we past that stage and in the STAR alliance as an affiliate member or equity shareholder?

I agree that these are valid questions of public interest. The Deputy asked whether we were at the crossroads or if we were involved with one grouping, as distinct from talking to many companies. The chairman told me on Tuesday that he had an initial round of discussions with many airlines, including Lufthansa. He now hopes to engage in more detailed discussions with the same number of airlines. He has not yet homed in on any one alliance.

I understand what the Minister is saying. Is she therefore denying the suggestion that Aer Lingus has a clear preference for the STAR alliance, that it does not involve equity and that the board has been briefed along these lines?

I am not denying anything — there is nothing to deny. I met the chairman on Tuesday and asked him for guidance on the position of the discussion. He told me that the next board meeting was in February. I asked him directly if he was homed in on one alliance and he replied that he was not. I can only repeat what he said to me, that he proposed to re-enter talks with many airlines before coming to an agreement.

With the resources of her Department and the Government, is the Minister carrying out any analysis herself? Whenever the discussions reach a conclusion, will the Minister investigate the matter at that stage? Would it be more prudent that the Department form its own view on this and not consider the Aer Lingus proposal as a fait accompli, but develop its own thinking? It may well be the case that the Government, as a shareholder, might have its own opinion.

That is a valid point. The chairman meets the Minister alone, that is the precedent. It is a valuable exercise because it gives an insight into the thinking on policy matters. My officials met and we talked over the discussions with the chairman. The Department would have its own knowledge of all of the airlines, although not in the strategic sense of forming a relationship with Aer Lingus. The aviation section of the Department would have knowledge of all the major airlines in the world. When the chairman told me he was about to begin a more intense round of negotiations with a number of airlines, I was satisfied the discussions were still at that stage.

Does the Minister have any view at this stage?

No. I do not know enough about aviation.

We must proceed to Question No. 2.

When we come to the other oral questions, can Members speak for as long as they wish?

That is not an invitation.

No. I have a bet with a person that we will reach a certain number.