Ceist:
11 Mr. Coveney asked the Minister for Public Enterprise the company which is advising her on the privatisation of Aer Lingus; the amount paid to the company to date; and if she will make a statement on the matter. [13246/01]
Other Questions. - Aer Lingus Flotation.
Breeda Moynihan-Cronin
Ceist:36 Mrs. B. Moynihan-Cronin asked the Minister for Public Enterprise her position in relation to the flotation of Aer Lingus; and if she will make a statement on the matter. [13173/01]
Jim O'Keeffe
Ceist:37 Mr. J. O'Keeffe asked the Minister for Public Enterprise the amount paid to date to advisers in relation to the possible flotation of Aer Lingus; when this flotation is likely to take place; and the factors influencing any decision on timing. [13270/01]
Austin Deasy
Ceist:39 Mr. Deasy asked the Minister for Public Enterprise the way in which the plans for the privatisation of Aer Lingus are proceeding; and when it is expected that they will be completed. [13060/01]
Trevor Sargent
Ceist:65 Mr. Sargent asked the Minister for Public Enterprise if she is planning to float Aer Lingus before the summer; and the assurance she can give that the outstanding issues raised by the Retired Aviation Staff Association will be resolved in advance of any attempts to alter the status of the company. [13420/01]
I propose to Questions Nos. 11, 36, 37, 39 and 65 together.
As I indicated in my reply to Priority Question No. 22 of 27 March 2001, I am committed to implementing the Government's decision of 14 December 2001 in relation to the Aer Lingus IPO once the present industrial relations issues have been satisfactorily addressed. The precise timing will be influenced by the conclusion of discussions on the shareholding for Aer Lingus employees, the enactment of the enabling legislation and market conditions.
In so far as the advisers for the IPO are concerned, a range of different advisers are assisting in the preparations for the flotation of Aer Lingus as set out in the following schedule.
Advisers for Aer Lingus IPO and Payments to Date
|
Company |
Role |
Paid to Date (excluding VAT) |
|
Schroeder Salomon Smith Barney/AIB Capital Markets |
Financial Advisers (global co-ordinators) |
Nil |
|
Linklaters Alliance |
Legal adviser – international.(sub-contractor of globals) |
Nil |
|
William Fry |
Legal adviser – domestic general (sub-contractor of globals) |
£62,500 |
|
Mason Hayes Curran |
Legal adviser – domestic retail (sub-contractor of globals) |
£50,000 |
|
Drury Communications |
PR/marketing advice |
£66,360 |
|
Irish International Group |
Adverting agency |
£453,824 |
|
Deloitte and Touche |
Process/Fraud Auditor |
Nil |
|
Computershare Services (Ireland) Ltd |
Receiving agent |
Nil |
|
Merrill Corporation |
Secure financial printer |
Nil |
|
Behaviour and Attitudes |
Market research (sub-contractor of globals) |
£50,850 |
|
Noel Lindsay |
Process auditor |
£15,000 |
|
McCann Fitzgerald |
Legal advice on selection process |
£3,027 |
Mr. Higgins (Mayo) : From replies to questions I had put to the Minister and to the Taoiseach on the Order of Business I formed the impression the flotation was not only stalled but abandoned. It is now clear it is back on track. In view of this will the Minister indicate the time frame involved? Given the advice she has received from the long list of consultants what price consideration is involved? What consultation is ongoing with the trade union movement on the privatisation? Given that the Bill has been passed by the Seanad, when will it be introduced to this House so that Second Stage may be debated and parties may state their positions?
Neither the Taoiseach nor I said the issue was dead. Deputy Stagg will be aware of that. We have repeatedly said the Government has taken a decision but the industrial relations difficulties at the airline would have to be resolved before we proceed. The Government and I are very keen to proceed. We are strongly of the view that Aer Lingus would greatly benefit by taking a strategic route and by becoming involved in an IPO or some other method of sale. The precise timing will be influenced by the conclusion of discussions with Aer Lingus employees, which had commenced and were progressing well before the industrial relations difficulties abounded. The discussions were then put to one side but when we are informed by the company that these difficulties have steadied we will proceed with our plans.
The Bill has been passed by the Seanad. We will also consider market conditions as it would only be possible to sell if these were favourable. These factors, plus the IPO and the future of Aer Lingus are of concern to us.
I am amazed the Minister continues to say she wants to flog Aer Lingus. Does she not agree that it would be madness to proceed with this Thatcherite decision to sell a strategic asset and lose control over the use of it? The refusal by Eircom to carry out Government policy on the issue of broadband, which we discussed earlier, is an example of what may arise.
The Minister outlined a number of outstanding factors requiring resolution before proceeding with the Government's decision. Will she include again, as she did before, the outstanding issue of the pensions paid to other retired aviation staff? She gave a commitment to the House that this matter would be addressed before proceeding with privatisation. Is the Minister whistling past the graveyard on this issue, pretending that something will happen and creating uncertainty for the airline that makes it impossible for it to develop in the interim period?
The airline would be far better positioned for its future activity were it to go into the market place.
It is in the market place.
I am aware of that but I mean the market place for strategic options for it. There is a later question on the pensioners. That issue would have to be revisited before embarking on flotation, as I have told the House on previous occasions.
I believe we should proceed but in the current industrial relations climate at the airport it will be difficult to do so until they have eased or settled.
(Mayo): Does the Minister not accept that to try to sell Aer Lingus at present, apart from the national strategic considerations, will be extremely difficult? There are 6,000 staff so there will be a lot of grief if it is privatised. Aer Lingus requires 6,000 staff to fly six million passengers each year while Ryanair, for which I hold no brief, flies seven million passengers each year with 1,400 staff. There is much grief ahead.
Does the Minister not accept that much damage has been done to the credibility of State flotations by the Eircom debacle? Third, does she not accept that, from the point of view of a saleable commodity, an airline is extremely difficult to sell to investors? This is the most volatile—
Exactly.
(Mayo):—industry in the world. It is subject to war, fuel prices and fluctuations in the market. Airlines come and go. This airline has been a flagship for our national identity over the years and has done us proud. By floating it we could be heralding the end of one of our proudest national assets.
Does the Minister agree that Aer Lingus has taken a serious hit this year as a result of the foot and mouth crisis? How does this affect plans to privatise the airline?
With regard to Deputy Higgins's question, I accept there are difficulties inherent in such a move but it is clear that it is the proper move for the airline.
It is not clear.
It is clear to me although it is not clear to the Deputy.
The Minister is wrong; she thought the same about Eircom.
Privatisation brings with it intense competition and much good for the commodity itself.
That is rubbish.
Deputy Stanton asked about the effects of the foot and mouth crisis. The chairman came to see me following a meeting Aer Lingus held to deal with that and other matters. The crisis had a severe effect on Aer Lingus. Happily, amelioration of the situation is now evident although forward bookings for May and June were badly hit. I have not met the chairman for a few weeks but I am told there has been a distinct improvement. I hope that is correct.