The following motion was moved by Deputy Crowe on Tuesday, 24 May 2005:
That Dáil Éireann:
—recognising the enormous contribution to the Irish economy made by the national airline, Aer Lingus, since its establishment;
—commending the workforce in Aer Lingus for building up the company over many years as one of the foremost airlines globally, and for their major contribution in returning the company to record profitability since 2001;
—noting that State funds, through the national pensions reserve fund, are currently being invested in aviation companies throughout the world, while the Government refuses to invest State funds in Aer Lingus;
—affirming the need to retain the national airline in public ownership as a vital strategic element of Ireland's infrastructure;
—asserting the responsibility of the Oireachtas to serve the public interest, including the convenience and safety of the travelling public and the livelihoods of workers in the national airline; and
—deplores the decision of the Government to sell the majority stake in Aer Lingus held by the State on behalf of the Irish people, thus leaving the company and the workforce open to exploitation by private commercial interests who will profit from the decades of investment by the Irish taxpayer in building up Aer Lingus and from the sacrifices of the workforce who saved the company in recent years;
calls on the Government to:
—retain the national airline, Aer Lingus, in State ownership;
—invest in Aer Lingus as required and on the basis of a business plan to secure the future of the airline, given that there is no impediment under EU competition rules to such investment;
—safeguard the employment, pay and conditions of all Aer Lingus workers; and
—develop Dublin, Cork and Shannon airports and the regional airports as part of an integrated all-Ireland transport policy, and in doing so fully comply with the agreement reached between the Taoiseach and the Irish Congress of Trade Unions in the context of the 2004 pay talks so as to ensure that pay and conditions won by workers at Dublin Airport are fully applicable to workers in the new terminal or terminals there.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"—notes the Government's commitment to ensuring that Aer Lingus continues to make a significant and valuable contribution to the economic and tourism development of the country;
—recognises the significant contribution made by the board, management and staff in the continuing turnaround in Aer Lingus' finances;
—notes that Aer Lingus can only continue to make this contribution if it can compete successfully on a level playing field, operate profitably and has access to a variety of funding sources to facilitate growth and provide financial security;
—recognises that decisions on investment by the national pensions reserve fund are solely matters for that board having regard to their statutory remit;
—welcomes the Government's recent decision in principle for the sale of a majority shareholding in Aer Lingus to provide the funds needed by the company;
—welcomes the Government decision to maintain a significant minority stake in the airline to protect the State's key strategic interests;
—notes that Government also decided to appoint advisers to advise on the size, type and timing of the Aer Lingus sale transaction;
—welcomes the Government's strategic approach which gives Irish aviation a clear direction for the future and an unambiguous mandate for growth;
—notes that these decisions are part of a comprehensive plan which will allow for the long-term success and growth of Irish aviation, the result of which will be a stronger aviation sector and a better future for the economy, customers and staff;
—notes that the Minister for Transport will progress the restructuring of the State airports and further notes that the national network of State and regional airports is contributing to a thriving aviation sector for the benefit of trade, business and tourism development; and
—notes that the agreement between the Government and the ICTU, which formed part of last year's mid-term review of Sustaining Progress, will be reflected appropriately in the arrangements for the tender competition to select the operator of the second terminal at Dublin Airport."
—(Minister for Finance)
I wish to share time with my colleagues Deputies Nolan and Ellis. I am delighted to have an opportunity to speak to the Government amendment to the motion on Aer Lingus and the aviation package announced last week. I am particularly pleased because it gives me an opportunity to speak about certain important issues.
I congratulate the Minister for Transport for the package of proposals announced last week which brings a significant degree of clarity to affairs at Dublin Airport that was missing for some time.
The Deputy should not plead ignorance.
I am delighted this package has been announced. I see it as a starting point for considerable development and exploitation of the potential of the various facilities and institutions at Dublin Airport.
I particularly welcome the package in so far as it relates to the Dublin Airport Authority and Aer Lingus and for the framework it provides for the exploitation of the undoubted potential at the airport. Various unjustifiable and cynical comments have been made about the background to the package, suggesting that it panders to certain elements at the airport. Instead, it was an excellent exercise in partnership, the result of which satisfied the majority.
I am a Fingallian and proud of it. Both my parents were born and raised in Fingal, as I was. Throughout my life and most of the life of my parents, Dublin Airport was the major industrial institution in the area. I come from a typical Fingal family: I was reared next door to an Aer Lingus employee, my sister married an Aer Lingus employee, several good friends of mine are Aer Lingus employees and recently my constituency secretary's daughter became an Aer Lingus employee.
Fianna Fáil in Dublin North held a meeting recently attended by 100 people, almost as many as at a Green Party national conference. Of those 100 people, 45 had direct links with Dublin Airport. That indicates how deeply Dublin Airport is rooted in the community and how important it is. I reject the suggestion that the aviation package is pandering to vested interests. It is a classic example of democracy and of listening to the voters. I have no hesitation in supporting this package on the basis that it is what the voters who elected me wanted.
I will deal with the three individual components at the airport, although the motion relates specifically to Aer Lingus and I will not deviate too far from that. Aer Lingus is highly profitable as a result of the hard work and sacrifices of the staff of Aer Lingus.
It is easy to forget that five years ago Aer Lingus was on the brink. That was before the attack on the World Trade Centre on 11 September 2001. Aviation changed after that event. A survival plan for Aer Lingus was executed and implemented through good management and the dedication of the workforce. As a result of the sacrifices made by the workforce, there are now more Aer Lingus pensioners than employees.
The Deputy has one minute remaining to speak. He did not mention at the start of his speech that Deputy Grealish is on the list to share time with him. He has five minutes, as do Deputy Glennon and two others. I am merely pointing that out.
How much time do I have left?
The Deputy has little or no time.
Does my 30 seconds include the Chair's time?
I could not be more diplomatic.
I will conclude. I am amused at Sinn Féin's new-found interest in Dublin Airport. The word "airport" is mentioned only once in the party's manifesto for the general election in 2002. There is no mention of Aer Lingus, Aer Rianta or SR Technics which employs 1,250 people at the airport. The only reference to the airport is:
This State is suffering from decades of public transport infrastructure under-funding. Dublin remains one of the very few capital cities not to have a rail link to its airport.
The party appears to have been more concerned about rail than aviation until its new-found interest.
The same applies to the Green Party, although Dublin North is the constituency of that party's leader. Dublin Airport is the largest industrial institution in that constituency. There is not one mention in the Green Party manifesto of the airport or of aviation. That says a great deal.
I am glad to have a few moments to speak on this important issue. While I wholeheartedly agree with the commendation of Aer Lingus in the original motion, the absence of detail in any action proposed by Sinn Féin is worrying, if not surprising.
The Government considered the future of Aer Lingus for some time. Last summer, a special Cabinet sub-committee was established and a report on future options for the company was prepared by Goldman Sachs. The key concern has correctly been to provide Aer Lingus with the necessary sound footing for a successful future which entails access to capital. Despite the inaccurate and often vague assertions of the Opposition, the plan announced last week provides for the future growth and stability of Aer Lingus.
Aer Lingus requires funds to support profitable growth and to ensure financial stability. We must all support the company in its pursuit of growth and to realise the significant potential it has identified on long haul routes. That was the immediate challenge facing Government and is addressed by the package announced last week.
Aer Lingus needs an appropriate cost base and access to funds to finance aircraft acquisitions if it is to take advantage of the potential it has identified. Last week, a decision in principle was made to sell a majority shareholding in Aer Lingus to provide these funds. While some Opposition Members claim that this leaves the airline open to exploitation, the State will retain a significant stake to protect Ireland's key strategic interest. Appointed advisers will give direction on the size, type and timing of the Aer Lingus sale transaction and I believe the intention is to move quickly to engage these advisers and to consult Aer Lingus and staff on the investment needs.
The most appropriate transaction mechanism to raise these funds will be selected, having due regard to a range of key issues, including the achievable price. The most important aspect of the process will be meeting the company's needs. In the timing of the proposed transaction account will be taken of that need as well as market conditions and the state of the aviation sector generally.
Much of the debate that followed the announcement of the aviation package last week has been on strategic issues, specifically the slots at Heathrow. Every possible option within the regulatory framework will be examined to guarantee that Ireland's travelling public have ongoing access to Heathrow Airport. These options may well include specific shareholder agreement covenants or commercial arrangements between the State and Aer Lingus. The State will still maintain a significant minority stake in the company, and the best interests of Aer Lingus, its workers and customers will dictate action in this area. This is the correct and most suitable course of action.
Sinn Féin, Labour and some others in this House may not share the confidence of Aer Lingus that there is massive growth potential for the airline. That is unfortunate. We, on the other hand, recognise and must facilitate that growth. One thing is certain, the Marxist policies proposed by Sinn Féin will not facilitate it. Fine Gael support the sale of a majority share but is not inclined to oppose moves to facilitate it. Labour proposes that the State get into the business of buying aeroplanes to facilitate it. Facilitating the growth of Aer Lingus should certainly not be placed in the hands of those on the benches opposite.
Only by implementing in full the existing business plan will Aer Lingus receive the appropriate cost base to support a sustainable growth plan. That is the reality. The State is not acting in isolation or in a vacuum on this issue. The management and staff of Aer Lingus must work together to achieve the desired growth and stability. The State must, and does, support effort in this area.
Aer Lingus must be able to compete properly and grow both on short-haul and long-haul routes. This can only happen with access to the required funds and continued progress towards greater productivity. The aviation package announced last week makes such progress possible and this can only be welcomed.
Like my colleagues I appreciate the opportunity to contribute to the debate on the future of Aer Lingus. When we look at Aer Lingus we have to do so in the context of where it has come from. Aer Lingus has made enormous strides during the past four or five years from being debt-ridden and on the brink of going under to being a profitable airline. Without a major injection of capital it will not be able to advance further.
The chairman of Aer Lingus came before the Joint Committee on Transport and informed us that Aer Lingus funding requirements over the next five years is approximately €1 billion. That is for the purpose of providing new long-haul aircraft and for an upgrading of the European fleet. If anybody can tell me how the State can get involved in providing that amount of funding he or she would have a better knowledge than I of the future of Aer Lingus.
If Deputy Shortall wants to interrupt me I will wait and give her the pleasure of doing the same to her. Her hallmark has been to interrupt everybody. It is time she showed a little courtesy.
As I was saying before I was so rudely interrupted, it is important from the point of view of Aer Lingus's future development that the necessary funding is provided. This is all about funding to allow Aer Lingus to progress as an airline. Many speak about the danger of losing a national airline. We will not lose a national airline but if allowed remain in its present state Aer Lingus will begin to go into reverse.
Anybody who studies the last set of accounts from Aer Lingus will see that, were it not for cutbacks in salary expenses and reduced staffing levels, it would not have been able to produce a profit of €1 billion. How can anybody expect that airline to move on and make the €1 billion investment needed to make it into the international airline it will have to be? Its long-haul fleet needs to be replaced as soon as possible and its European fleet needs upgrading. If we are to have a national airline it is important that it is properly funded.
People spoke inside and outside the House about the prospect of losing ownership of Aer Lingus, but that will not happen. The private sector is willing to come in and provide the necessary funding to move Aer Lingus to the next step. We all heard Members bleat when Willie Walsh announced that he was moving because no decisions had been taken. Now when decisions are being taken they are not right.
A number of areas are protected up to a point. For example, the 14.9% stakeholding held by Aer Lingus workers will remain. A shareholding of more than 11% is required as a blocking majority in regard to doing anything to Aer Lingus. I am fully supportive of the moves to examine the possibility of selling off a portion of Aer Lingus. I have no doubt that if Aer Lingus is to prosper it needs capital, which cannot be provided from Government sources.
The Government decision last Wednesday to sell the majority shareholding in Aer Lingus, while retaining a substantial minority shareholding in the company, is a good and positive move for the company, Ireland and Irish aviation interests. We acknowledge that we cannot continue to keep our heads in the sand. The international aviation industry is such that companies move into profit, make substantial losses and return to profit. We acknowledge the role played by management and workers in Aer Lingus in recent years, particularly in the past two years, where it has gone from a state of almost bankruptcy to a substantial profit last year and the prospects of it making a profit this year are good.
I wish the company well in its new format. It is now able to attract substantial investment because of the fleet replacement it has to undertake. I am pleased Aer Lingus has adopted a policy of investing in Airbus aircraft. It is important that a small country such as Ireland flies the flag. As a good and loyal member of the European Union we should support Airbus because it is based in the European Union.
We should not lose sight of the fact that while we have three major airports, in Dublin, Shannon and Cork, we have six provincial airports, three of which are located in Waterford, Sligo and Donegal. Waterford airport is located on the southern side of Waterford city. While we can continue to invest Exchequer funding in regional airports such as Waterford we should seriously consider the possibility of relocating that airport. If it were placed on the north side of Waterford city it could service Waterford and Kilkenny cities. International airports in Europe and England — for example, Leeds-Bradford International Airport — service two cities. Before committing further capital funding to that airport it should be located somewhere between Waterford and Kilkenny, possibly in south Kilkenny. That would be a more viable option and would attract many more passengers.
People in the south east travel to Cork airport to avail of its facilities. If an airport were provided in a good location such as south Kilkenny it would be more profitable than in its present location.
We have not given sufficient time and energy to look at the opening of Baldonnel as a commercial airport. On the Continent, military airfields are used as civilian airports. Baldonnel is close to a rail link and the Naas dual carriageway, one of the main routes into the city. It would be of benefit to passengers from the southern area.
I welcome the opportunity to make a brief contribution to this debate on the future of Aer Lingus. The Government amendment appropriately notes the airline's contribution to the development of tourism and the wider economy and this has never been questioned. I join other Deputies to commend that contribution.
My colleague, Deputy Grealish, has already spoken on the specifics of the aviation package announced last week. I wish to demonstrate how the development of policy on Aer Lingus shows to a great degree the wisdom of the policies pursued by the Government parties and in equal measure, the poverty and very serious incoherence of the policies devised by the parties opposite in all their diversity.
The policy position set out for Aer Lingus by the proposers of this motion are reminiscent of those failed, statist policies of decades ago——
It is a successful company.
——that turned this country into an economic basket case. This is not my assessment but the assessment of renowned economists——
I will develop this point if I am allowed. The motion before the House tabled by Sinn Féin calls for the status quo for Aer Lingus, State ownership, same conditions and practices. This will mean the same problems, unfortunately. It is remarkable that Sinn Féin, Labour and the Greens tried to pass off all their policies as if they are in the best interests of the company and to a lesser degree, the consumer.
The truth is the Government parties are the ones listening to the concerns of Aer Lingus and the travelling public. They have invested a great deal of time and reflection before coming to the recent decision. Aer Lingus itself believes there is significant growth potential, particularly on long haul routes, provided it has the appropriate cost base and access to funds to finance aircraft acquisition.
The question is how to best facilitate that growth, how realistically to provide the funds required. Apart from statements laden with rhetoric from Sinn Féin, how does it propose to raise the required capital? The Sinn Féin motion and the contributions of its Deputies last night do not answer this fundamental question.
The Labour Party, predictably and understandably, supports continued State ownership of the airline. At least it is brave enough to set out its policy. We know Aer Lingus sees significant growth potential, particularly on long-haul routes. Its long-haul fleet consists of seven Airbus planes. It is believed Aer Lingus sees opportunities for expansion on the Atlantic routes and a need to replace and extend the fleet with up to a dozen new long-haul aircraft. Given that these reportedly cost more than €100 million each, I would be fascinated to hear how the Labour Party proposes to justify spending €1.2 billion of taxpayers' money on airplanes.
Fine Gael, on the other hand, rejects Sinn Féin's motion and the Government amendment yet it stated last night it has no problem with the central point of the Government amendment. Policy on Aer Lingus can now be added to the list of disarray as between Fine Gael and Labour that includes the M3, the second terminal, stud fees, Aer Rianta, etc. The list goes on. Where would we be if the parties opposite were in charge? This is supposedly the alternative Government.
The Government parties are now agreed on how——
The whole thing is a shambles. They are making a shambles of the whole thing.
——to address the needs of the company and the needs of the consumer. Both are best served if Aer Lingus is able to compete aggressively and grow both on the short-haul and long-haul routes.
Rather than repeat the failed policy of the past as suggested by this Opposition motion——
——this Government has provided the means by which Aer Lingus can now grow its business and ensure financial stability. That is sound and responsible Government, which will no doubt be recognised by the public for being just that.
In the very limited time available to me I wish to identify a central weakness of the argument in Sinn Féin's motion. It fails dismally to recognise the environment in which Aer Lingus and the aviation sector operates and where the only constant is constant change. Neither the motion nor any of the speakers referred to the fact it is the most cyclical of all international business. They do not refer to the ultra-competitive environment in which Aer Lingus operates. The motion does not appreciate the reality in which Aer Lingus operates. No modern country in Europe is investing money in airlines; practically all of them are divesting themselves. The motion does not seek to explore the reason, which is very simple. In the modern aviation environment, cut-throat competition means an airline requires flexible access to capital markets and cash. It is an industry that depends on sophisticated financial instruments and Government control is not in the best interests of the airline. I refer to Gerry Byrne, an aviation expert, who wrote in today's edition of The Irish Times that it is a quaint anachronism.
The argument is put forward that there is no ban on Government investment in good times. I suggest it does not at all recognise the reality that money is certainly needed in the good times but more important, it is needed in the bad times. Governments cannot invest in airlines in the bad times. As sure as night follows day, there will be bad times. There have been bad times in the airline industry since its inception. Where would Aer Lingus be without access to capital, without access to flexible and immediate equity? It would be down the Swanee and we would be blaming the proposers of this motion. I support the Government's amendment.
In contrast to the intent of this motion and the political thinking of the party sponsoring it, this Government's aim is to ensure that the airline continues to make a significant and valuable contribution to the economic and tourism development of the country with the maximum number of sustainable jobs.
Unlike the sponsoring party, the Government recognises it can only do this if Aer Lingus can compete successfully, operate profitably and have access to a variety of funding sources to facilitate growth and provide financial security.
As part of its strategic vision, Aer Lingus believes there is a significant growth potential particularly on long haul routes provided it has the appropriate cost base and access to funds to finance aircraft acquisitions. As Deputy Peter Power said, this funding would not be made available from the Exchequer so private sector alternatives must be examined.
The motion contains many alarmist references such as leaving the company and the workforce open to exploitation by private sectoral interests. This Government has already anticipated and met this concern by deciding that a significant stake of at least 25% should be retained, irrespective of chosen transaction mechanism. Concerns have been expressed about the disposal of a minority stake and the strategic issues including the slots at Heathrow Airport. All the options available within the regulatory framework will be examined to ensure ongoing access to Heathrow Airport for Irish consumers. Apart from maintaining a significant minority stake in the company, options could include specific shareholder agreement of commercial arrangements between the State and the company. Under company law the ownership of more than 20% of the issued share capital of a company enables a registered holder to deny the right of third parties to compulsorily acquire outstanding shares, which is a safeguard. The ownership of 25% of the issued share capital of a company enables the registered holder, in addition, to deny the remaining shareholders the ability to pass special and extraordinary resolutions, for example, such as making changes to memorandum on articles of association. It is not unusual for states to retain a shareholding in former flag-carriers. Given the uniqueness of the sector this is acceptable to markets as was the case with, for example, Air France. Once a minimum stake of 20% is held the Government cannot be forced to share its shares. This is clear legal evidence that the Government will not and cannot expose the company to negative interests as stated by the parties opposite.
I wish to share time with Deputies Seán Ryan and Broughan.
The Labour Party strongly opposes the sale of Aer Lingus and supports the sentiments of tonight's motion. In recent weeks and months, media attention on the Government's dithering on the second terminal at Dublin Airport has completely overshadowed the decision to proceed with one of the biggest privatisations in this country's history. The reason is obvious. The political dogfight in Cabinet over the second terminal, so loved by the media, did not just happen with respect to selling off Aer Lingus. It is not just that the Fianna Fáil backbenchers stood idly by while the Progressive Democrats got their way, they actually agreed with them. Privatisation really is the new religion.
The media blindfold on Aer Lingus privatisation has meant little or no public scrutiny of the implications for all of us of the sale of the national airline. The Government's inaction on the second terminal has been repeated in its attitude to Aer Lingus. Since 2001, it has offered no direction to the company. It has been a decidedly disinterested shareholder and has failed to take key strategic decisions about the company. The only decision it did make was that it would never again invest in the airline. The Government's case for privatisation is based on the airline's potential future capital needs, on EU developments, on a distorted interpretation of EU law and in particular on the yellow pack ideology that runs through the Cabinet.
No one can say for certain what Aer Lingus's future capital needs will be and we have never had an adequate explanation from Government on this point. Various figures up to €1 billion have been suggested for expanding the long-haul fleet. However, such an expansion is only feasible if a satisfactory conclusion is reached on US-EU negotiations on the open skies policy, a process like our own aviation matters that is taking much longer than it should. An open skies agreement could potentially open up new routes for Aer Lingus but the outcome of those negotiations is, as yet, difficult to predict. How can we base such a major privatisation on the outcome of negotiations that are not yet concluded? How can a Government that took three years to reach a fudge agreement on a second terminal have such supreme confidence in EU and US negotiators to reach a satisfactory conclusion to a much larger and more complex issue?
Even if new routes are opened, as we all hope, Aer Lingus has a number of options in terms of expanding its fleet. It would have no difficulty in borrowing. It could enter into long-term leasing arrangements, which are standard practice for all airlines, or the State as shareholder could invest in the company's expansion. It can still do so. Why has the Government ruled out these options and put the long-term strategic interests of the country at risk? The reason is clearly ideological.
Nothing displayed the Government's prejudiced attitude to Aer Lingus more clearly than the Goldman Sachs report. Last September it was announced that Goldman Sachs had been selected to provide advice and assistance to the Department of Transport on the future of Aer Lingus. At that time, it was stated that the advice would "primarily relate to the implications of maintaining the current ownership arrangement, strategic and public policy issues, as well as transaction issues." However, that assurance turned out to be a complete lie. The Goldman Sachs report makes it quite clear that the authors were asked to advise on the future of Aer Lingus subject to one overriding stipulation:
The current policy of the State is to provide no further equity funding to the Company. The State will not provide further capital to the Company either to fund expansion or in the event of a financial crisis.
In other words, the most obvious and basic choice available to any commercial operation — to secure investment for its expansion from the existing shareholders — was ruled out by the Government in advance of the advice being sought, which was an entirely ideologically motivated decision. This has nothing to do with European law. The European Commission and, more importantly, the European Court have made clear that nothing in EU law prevents a government from investing on a rational and arms-length basis in any of its commercial enterprises.
The implications of this privatisation for Ireland are enormous and affect the key strategic interests of our country. As an island dependent on tourism and inward investment, we rely heavily on air travel. The high number of direct flights to and from various destinations, which Aer Lingus operates, has been critical to our tourism industry. These destinations have proved very attractive to Irish travellers for holidays and short breaks abroad. Central to our ease of travel also is Aer Lingus's access to more than 30 landing slots at Heathrow Airport, the fourth largest share of any airline. These slots greatly facilitate onward travel to other destinations as well as bringing more tourists here. In response to a parliamentary question a few weeks ago the Minister admitted that these slots were vital to the company and that he could not be certain that EU law would assist him in retaining control and yet he still reached a decision to sell off Aer Lingus.
Privatisation puts such services and assets at long-term risk and we should not just abandon them at the ideological whim of the coalition partners. Aer Lingus has demonstrated that it is possible for a State-owned enterprise to operate successfully in a cutthroat commercial environment. Its future successful operation requires additional capital. The private sector is willing to invest because it sees the potential for profit. However, the Government rejects a sane and rational investment opportunity that would be embraced by any commercially minded business because of an obsession with private profit and a conviction that commerce is good but only in private hands.
Claims by Government sources in recent days that despite its plan to sell off a majority shareholding in Aer Lingus, it would ensure the preservation of the company's name and crucial strategic assets, such as its landing slots at Heathrow, are absolute fantasy. The bottom line is that once a majority shareholding in the company is ceded to private interests the majority say in the decision-making process is handed over also. This is a basic law of business. Even if the Government were to extract some initial commitments from those who purchased the majority shareholding, nothing could be done to prevent those shares being sold on to others who would not be bound by such commitments.
Fianna Fáil backbenchers appear to have clearly been sold a pup and have foolishly accepted assurances from Cabinet members that some sort of golden share could be retained by the Government in order to protect the national interest. The European Court of Justice has made it quite clear that the notion of holding golden shares is unacceptable and it has ruled them anti-competitive. This point was also made abundantly clear in the Goldman Sachs report commissioned by the Minister.
I hope that some Fianna Fáil backbenchers will at least acknowledge the extent of the Government's betrayal of the national interest. They should wise up and be honest with their constituents. Fianna Fáil and the Progressive Democrats have sold out on our national airline. The experience of the privatisation fiasco in Eircom should sound alarm bells for us all. We cannot prevent venture capitalists from repeating the devastation of Eircom by stripping Aer Lingus of its assets, reducing services, putting it into serious debt and walking off with the proceeds. We have to ask whether the Minister is incapable of learning from the mistakes of the past.
I am pleased to speak in support of the motion on Aer Lingus. However, the future ownership of the company has already been decided by the passing of the Aer Lingus Act 2004. The Government's decision to sanction a majority sale of Aer Lingus is a betrayal of the company and its workforce who have served this country so well over the years and, given their record in recent years, they could continue to do so successfully in a public enterprise. It is worth noting that the company's operating profits for 2004 were €107 million, an increase of nearly 29% on the previous year and a profit of €63.8 million in 2002. The decision to cede control of a majority shareholding could be a disaster for the country, air travellers, employees and the greater Dublin area.
The Labour Party has long argued the importance of keeping Aer Lingus in public ownership. The logical conclusion of the Government decision, however, will in time probably see control of the airline passed to a major competitor such as British Airways. In such circumstances, it is ironic indeed that Mr. Willie Walsh, the former CEO of Aer Lingus, whose position in the company was made totally untenable by the Taoiseach, could well have the company back under his wing.
Aer Lingus has a major strategic role in the economy of the country. We are an island economy and without a national airline Ireland could suffer dramatically from the fickle nature of the airline industry, should control of the company pass into the hands of people with no commitment to the country. Tourism is our second largest industry and it depends to a significant extent on the aviation industry. Given our peripheral location and relatively small population, it is vital that we have an airline prepared to balance the need for profit with the strategic interest of the country.
The Government decision to send out Ministers and backbenchers to try to convince the public that the retention of the so-called golden shares — 25% of the company — can protect its strategic assets is open to serious question. My colleague Deputy Shortall has highlighted that in 2003 the European Court of Justice decided that it was illegal to hold a golden share that would protect such strategic interests. It is imperative that the Minister, in summing up, addresses the issue this evening. It is obvious that he is not interested.
As an island nation, access to and from our shores is a key issue that cannot be left in the hands of private operators. That is the position that Fianna Fáil public representatives in north Dublin have warmly welcomed. These are changed times indeed, and I wonder how they can convince the electorate of the necessity of the change. There is a real alternative to the privatisation agenda being put forward by the Progressive Democrats and Fianna Fáil. There is no disagreement that Aer Lingus needs access to investment capital. The way forward is for the Government to accept the Labour Party's proposal from its last general election manifesto, which is now also the position of the Irish Congress of Trade Unions, to establish a public enterprise management company that would source the necessary capital in future. It should be noted that the national pensions reserve fund has invested €600 million in overseas companies, including airlines, in recent years. All that is stopping the Government from investing in the expansion of Aer Lingus, one of the most successful airlines in the world today, is ideology.
In the context of a real debate on our future direction, we needed to get the media on board, but unfortunately they were not interested. Once again, the Government has set its eyes on privatisation, which will be a disaster.
I warmly support the motion set before the House by the Sinn Féin Party, whose sentiments I fully share. It is a timely motion.
The debate on air transport of the past few weeks was completely phoney, as the Minister knows. We had a classic three-card trick from a pair of hucksters in the Government, the Taoiseach, Deputy Bertie Ahern, and the Minister for Transport, Deputy Cullen. They stored up a long, pointless, nonsensical debate about the terminal, the most ludicrous aspect of which was of course the third terminal. Why not build five terminals while we are at it, like Arlanda Airport in Stockholm?
The former Minister, Deputy Brennan, was shafted after he delivered the totally unnecessary and dangerous splitting of the three airports and the gross enfeeblement of Aer Rianta so that Michael O'Leary, his boss and the paid-for Progressive Democrats frontmen were able to put forward the ludicrous proposition of privatising the second terminal. That was not a runner and would not happen. All the media, with their usual modus operandi, chased after that chimera, although the real issue was the disgraceful decision to privatise our national airline. All the nonsense that we read about O’Leary, his Progressive Democrats minions, the McEvaddys and the other developers obscured the key decision, namely, the privatisation and, in time, almost certainly the foreign take-over of the national airline of this island nation.
While that phoney debate has continued, the key intention of the Taoiseach and the Minister for Transport, Deputy Cullen, of selling off the jewel in the crown of our national state enterprise was allowed to go unchallenged. Tonight, the northside Fianna Fáil Deputies have the grave responsibility of voting for this motion and against the Government, as I did ten years ago, with the other northside Deputies, including Deputies Seán Ryan and Shortall. We had the guts to come in here and vote against the Government on an anti-national, anti-northside policy.
I want to mention those Deputies in a roll-call of infamy. In my constituency, there are Deputies Woods and Brady, who came in here with some weasel words a few minutes ago to try to justify the outrageously unjustifiable, which will lead to the loss of jobs in the Dublin North-East constituency. Deputy Haughey and the Minister of State, Deputy Callely, represent Dublin North-Central; Deputies Glennon and Wright represent Dublin North; the Minister of State, Deputy Noel Ahern, and Deputy Carey represent Dublin North-West and the Minister of State, Deputy Brian Lenihan, represents Dublin West. Adjoining those constituencies are Meath——
——and Kildare. On a famous day, when we all went over to the old terminal to stand up for Aer Rianta, there were 13 vacant Fianna Fáil seats. These people did not even have the gumption or the courage to face the workforce of Aer Rianta or Aer Lingus. I want those nine northside Fianna Fáil Deputies to show some courage tonight by voting for the motion and against the sale of Aer Lingus. Unfortunately, I well know that I will be disappointed.
Earlier today I was thinking back to the early days of Aer Lingus. Not only will a predecessor of the Taoiseach, the great Seán Lemass, be turning in his grave tonight, he is probably spinning in it when he thinks how this outrageous situation has come to pass. The decision was a grotesque betrayal of this country, the north side of Dublin and the workforce of Aer Lingus. It was a betrayal of a valiant workforce that had to endure wage cuts, job cutbacks and other desperate measures so that the company could be saved. They have 14.9% of the company but financial journalists tell us that they will have to raise at least €60 million if they want to hang on to that as the company is capitalised on the market. We believe that up to 40,000 jobs in our region are now in danger.
Aer Lingus is a symbol of the Fingal area and the airport is the central economic driver of the area. The only people who can stop this tonight are the nine Fianna Fáil Deputies from Dublin's north side, as well as those from Meath and Kildare. I spoke today to someone who had been a senior accountant with Ryanair until he joined RTE a few years ago. He told me about the interesting prospects in long-haul flights for Aer Lingus as it is currently organised. Those prospects will start to disappear as soon as this decision takes effect.
Last Wednesday was a day of infamy for the country, the Government and the Taoiseach. On the north side of Dublin, we will make certain that those who vote against this motion tonight will pay a horrific price in 2007.
It was interesting to hear Deputy O'Donnell state that Aer Lingus had to be sold to raise the €1.2 billion needed to buy an additional 12 long-haul aircraft. Last week, the Minister for Transport asked us to see the bigger picture, to think outside the box and to imagine a glorious future for Aer Lingus and Dublin Airport. Looking into the future, I see a depletion of global oil reserves. Exxon Mobil predicts that once depletion starts, which is sooner rather than later, oil stocks will deplete by around 5% to 6% per annum. Goldman Sachs believes that and predicts oil prices in the not too distant future of over $100 per barrel. If we really think of the future, which we must do when debating this motion, the prospect of oil becoming incredibly expensive must be taken into account. The only thing that will get aircraft off the ground is oil. In such a volatile future, it is preferable for us to have control of the State airline rather than having it sold and losing any real control over the future of the company.
Last week, I accused the Government of being idiots for not seeing the reality of an oil depleted future. Now I feel that the word "idiots" is too soft. Ignoring this policy is actually criminal neglect. Even the US president talks about this and every government of any stature has begun to recognise it. Our Government is too busy with its small squabbles about two or three terminals. That will not be the main issue in aviation policy. The issue will deal with how we adjust aviation policy to suit depleting oil reserves. The Minister should address that rather than flog the assets.
I missed Deputy Glennon's speech but I was told that it was as entertaining as ever, with the usual lines of the Fianna Fáil press office attacking our own party and others. I look forward to reading his speech because the Deputy, in debates on the Bill in 2003, was resolutely opposed to the sale of Aer Lingus. I will also be interested the hear the views of other Fianna Fáil Deputies from the north side about the future of the company. However, I do not expect much because I do not see the sense behind this decision. If it was made to buy those long-haul aircraft, it was poorly explained in the Oireachtas committees which Deputy Shortall and I attended. It was never clear that such was the purpose of the sale.
I believe the decision was ideological and that was given as the reason for the sale only recently. Ideologies come and go and the current ideology of privatisation, to which this Government is wedded, may be seen as one that has served us poorly. We should get the private sector involved where it is appropriate and benefits the development of our economy. However, Aer Lingus is an example of the public sector working very well. The Deputies opposite me do not believe in public enterprise, but people on this side of the House still do so.
I am in favour of this motion. Over the past few days, there have been many acknowledgements of the emotional attachment that Irish people have to Aer Lingus. We should not apologise for that. It is only right that we should feel a sense of pride in a company that in many ways has acted as an ambassador for Ireland. There is much to be said for spotting the distinctive shamrock in airports in any part of the world. As citizens, we are part of what that represents.
Before the dawn of the Celtic tiger in Ireland, there were few companies that inspired a sense of pride on the international stage. I listened to some of the contributions from the Progressive Democrats Party when its Deputies spoke about Aer Lingus and failure. In fact, Aer Lingus has been a remarkably successful company. They may be confusing the story with the current failures of the terminal, but describing Aer Lingus as a failure is offensive. It is also important that we look at the fixation on things being cheap. I acknowledge that a cost-effective service provision is essential to the profitability of companies, but a balance is important to provide comfortable travel for passengers. We only need to look at the recent controversy involving Irish Ferries and the failure of the company to pay the statutory minimum wage. The reputation of the company has been tarnished by those events, as has the reputation of this country. It is difficult not to see that happening in Aer Lingus with the majority shareholding going out of public ownership. We will not retain the kind of control needed to prevent such an outcome.
The simple fact is that Ireland is an island. If one is in Paris, Brussels or Berlin, it is difficult not to see the role that the railways and roads play in comparison with this country where we are very dependent on both air and sea travel. It is in our strategic interest that we retain this national carrier. I do not see the logic in hundreds of millions of euro being transferred to the State from the sale of this majority shareholding, when the State will then reinvest that same money in the company but will only own a fraction of it. We should not take advice from the people who gave us the same advice during the sale of Eircom.
I am totally opposed to any attempts by the Government to sell off the majority share of the national airline to private buyers. I reject this sale on a number of important points, namely, the betrayal of the loyalty of the Aer Lingus staff who turned the company around, the detrimental effect this sale will have on local rural economies, and the ever increasing evidence of this Government's attitude of putting short-term monetary gain above the rights and needs of our citizens.
The staff of Aer Lingus have contributed enormously to the success of the company and through their dedication and suffering have turned the company from a loss-making entity to a profitable going concern since 2001. How does the Government propose to thank them? Privatisation of the national airline will result in job losses in all three main airports with Shannon Airport likely to be worst affected. As a reward for their hard work in making a success of the company, staff will lose their jobs. There is no justice in this.
Many of the Aer Lingus staff at Shannon Airport have worked for the company all their lives. They have put down roots in the area and are dependent on Aer Lingus to secure an income with which to raise their families. Job losses affect not only the number of individuals shown on the company's annual accounts but their families and entire rural communities. It is not simply Aer Lingus workers who will lose out but also all those ancillary workers who depend on the success of the local economy for their living. Job losses at Shannon Airport affect not only the airline workers but everybody in the Clare-Limerick area.
I call on the Government to retain the State's majority holding in Aer Lingus for the people and to protect the rights of workers in the company so their contribution to the economy and their patriotism can be properly recognised. If the Government continues with its foolish sale of our majority holding, it will betray those dependent on the airline. In this way, the Government will deal yet another severe blow to the local economy of rural communities and will create unnecessary hardship for many families.
I call on all elected representatives in the Clare-Limerick and mid-west regions to reject the Government's proposed sale of one of our most valuable assets. I urge them to stand up and be counted and to represent the views and protect the rights of those people who elected them. We owe it to our constituents to stand up for their rights and to recognise the contribution they make to the lives of people in their own communities. It would be a betrayal of the loyalty of the Aer Lingus workers to allow this sale to go ahead.
I put down a question to the Minister for Transport today on the bilateral agreement at Shannon Airport. He responded that it was a matter for Aer Lingus to honour that agreement and that the Government has no say in the matter. If the Minister were a surgeon he would spread no disease because he has washed his hands of this issue. Why did he not answer the question? Aer Lingus is in breach of the bilateral agreement but the Minister tells me he has no role.
The air transport industry in Europe is currently in a phase of major transition. Like most other airlines, Aer Lingus has not been exempt from the turbulence of speculation about its future. Last week the Government announced its intention to sell most of its majority 85% stake in the national airline while retaining 25% in State ownership. Four years ago, many predicted the imminent demise of the airline when it appeared to be in dire trouble. The driving force in cutting costs, jobs and fares, and restoring the airline's profitability was initiated by the Cahill plan and more latterly by Mr. Willie Walsh and his team. Mr. Walsh has departed for pastures new as he takes over the controls at British Airways. Only last week he decried the Government's retention of a minority stake in the airline as totally ineffectual.
Credit for the transformation of the national asset is due in no minor way to the company's management and in particular to the staff and unions who made a major contribution to the airline's survival. Another national asset, the former Telecom Éireann and now Eircom, was privatised four years ago with disastrous consequences for shareholders. Since then, the privatised Eircom has behaved abominably in abusing its position by stalling on the unbundling of the local loop in order to prevent competition in the telecommunications sector. It has also systematically hindered, obstructed and generally endeavoured to sabotage broadband availability nationwide at a competitive and reasonable price.
Aer Lingus is one of our major national public assets. In the strategic sale of such an asset, we yield the management of the company to the private sector. The Government clearly expects an alliance of some sort between international foreign investors and domestic private investors who together will control 60% of the company after privatisation. In such a tie-up, the foreign investor who will control the largest block of equity will be the determining influence on the operations of the privatised company. A shareholder agreement negotiated in the sale would have sensibly defined the relative roles of the strategic investors and the Government. However, the principal motivating factor for the sell-off seems to be the need for private investment to facilitate the upgrading of the fleet by the purchase of new aircraft.
The EU Commissioner for Competition recently clarified the question of State investment in Aer Lingus when he said the Government could invest in the airline's expansion. The Government's decision is surprising for a number of reasons. Most nations have sought to create and still maintain a State-owned national airline flying domestic and international routes on strong economic and social grounds, namely the need to provide connections to major international airline hubs and different centres within the state, even if such connections may not turn out to be profitable.
International connectivity and ease of access are crucial when a country seeks to engage in international markets and build commercial bridges with the rest of the world. Airline privatisation minimises State control and means that decisions regarding what points to connect and at what frequency are determined purely according to concerns of profit. Reference has been made to the future of the Aer Lingus slots at Heathrow Airport which are also an important national asset. They are owned by Aer Lingus and worth some €75 million, and were developed with taxpayers' money.
Gabhaim buíochas leis na Teachtaí Neamhspleácha as ucht a gcuid ama a roinnt. The proposal to privatise Aer Lingus, the national airline, arises for one reason only, from the right-wing, neo-liberal economic policy of this Fianna Fáil and Progressive Democrats Government. The Government is fully in tune in this sense with the EU Commission which would like to destroy every vestige of public ownership of services and industry within the European Union. There is no other economic reason for the proposed privatisation. The Minister for Finance, Deputy Cowen, speaking for the Government last night, made that clear indirectly when he tied himself up in contradictions:
Over its history Aer Lingus has had its share of crises and has come close to failure. However, the Minister for Transport wants to end these crisis cycles where every few years a crisis is followed by survival followed by stagnation and back to crisis again.
How does the Minister for Transport propose to prevent crises by abandoning Aer Lingus to sharks in the international aviation business? The opposite is the case because far more crises will be created for the national airline by doing this. In 2001, when the two unprecedented events of foot and mouth disease in this State and the twin towers atrocity in the United States occurred, it was inevitable there would be significant difficulties in international aviation. What would big business, as represented by the international sharks and the players of the casino economy, do if there was a more sustained period of crisis in international aviation arising from events such as these? They would shut down the airline, throw the workers to the wolves and move onto the next profit-making opportunity. The Minister for Finance makes no sense and should explain his reasoning.
He went on to argue that Aer Lingus should have the same funding flexibility as its competitors. Why does it not have funding flexibility? The Minister gives one reason. In one particular instance the National Pensions Reserves Fund cannot invest in Aer Lingus. This is because the Government makes rules that stop it from doing so. The Government prohibits investment in an entity such as Aer Lingus——
It is completely independent.
——and then uses that as an excuse for the privatisation of our national airline.
Deputy Joe Higgins is being disingenuous.
I am not being disingenuous. Please explain it.
We have no control over the national pensions reserves fund. It is independent.
That is as a result of legislation this Government introduced. The legislation should be changed to make investment possible. The Minister for Finance explained how unforeseen terrorist attacks and global downturns can cause problems. Why should the State not protect a vital national strategic asset when international capitalism, for example, enters a global downturn? It is an inevitable part of the system that such downturns will occur. At present, unsustainable public and private borrowing supports the US economy. Its balance of trade is also unsustainable. Public ownership would protect our vital national airline, protect good jobs, provide the service we need and defend a strategic vital national interest.
Last night my colleague, the Minister for Finance, set out in detail the rationale for the Government's recent decisions on key aviation issues. In agreeing the aviation action plan, the Government has given a clear strategic direction and a mandate for growth to both Aer Lingus and the Dublin Airport Authority. Since becoming Minister for Transport, my focus has been on making the correct long-term decisions. What we need are expansion rather than crisis plans. The aviation action plan is the right strategy. It is not in the interests of the aviation sector, the economy or airline staff that we continue as we have in the past. We must be proactive rather than reactive.
Aer Lingus is vitally important, given its history and the nature and volatility of the aviation sector. The recent decision on Aer Lingus will allow the airline to plan for the future in the knowledge that it will have the necessary funds available to purchase aircraft and to provide financial stability.
Funds are being taken from the airline.
This Government wants to ensure a viable Aer Lingus with a proper growth plan, which will fly to more destinations and give greater choice to consumers.
The Government is taking €400 million out of the company.
There is no reason it cannot be kept in public ownership.
The Government will sell 60%.
The Minister to continue without interruption.
Who said the Government was doing that?
I did not say that at any stage.
The information was contained in the Minister's reply to a parliamentary question.
I never made any such statement. This is the second occasion on which Deputy Shortall has said this. I have not at any stage said that and, to be clear, it is not my intention either.
Can we allow the Minister to continue.
I will send the Minister a copy of the reply I received two weeks ago.
Will the money be reinvested?
This issue is about reinvestment in the company.
What will be done with the proceeds?
The decision on investment will provide the necessary funds for Aer Lingus. This must be accompanied by continued progress within the company towards a more competitive cost base. This is a matter the company and staff will have to address over the coming months and will be crucial to the preparation of the viable future growth plan they have been mandated to complete as part of the Government decision. The Minister for Finance and I will move quickly to appoint advisers to advise on the size, type and timing of the Aer Lingus sale transaction. We will work closely with the board and management on all the preparatory and other arrangements to give effect to this decision.
I assure the House that in progressing the decision and charting the road map, I will continue to engage with the unions and the ESOT in a spirit of partnership. I have already written to ICTU and the ESOT and I expect that meetings will be arranged shortly to agree the consultation process.
During the debate Deputies mentioned the status of the Heathrow slots. I make it absolutely clear that I accept that Heathrow is important for Ireland. Apart from retaining the 25% stake in Aer Lingus, we must within the regulatory framework, ensure adequate ongoing access to Heathrow for Irish consumers. As I have advised the House on previous occasions, Aer Lingus does not own these slots, they do not appear on the company balance sheet and an EU regulatory framework is currently under review. However, access to Heathrow is vital and I will keep this matter under careful review as we move forward on the decision.
On the Government's decision on terminal capacity, I acknowledge the strategic importance of Dublin airport. It is and will remain pivotal to the continued success of the economy. New infrastructure capacity and facilities, both airside and landside, will be needed to cater for future growth, including further terminal and runway capacity. The Government's decision last week to approve the building of a second terminal by the Dublin Airport Authority will cater for expansion of the airport to handle up to 30 million passengers per annum. The Government agreed a triple safeguard process to ensure that terminal two, which will be operational in 2009, is delivered in an efficient and cost effective manner. These include consultations by the DAA with its airline customers to ensure the design of the new terminal takes account of their requirements, verification of the final specifications and costings by independent aviation experts and regulation by the Commission for Aviation Regulation. The DAA will also provide new pier capacity at Dublin airport by 2007. This will ensure the delivery of more contact stands for aircraft, which are especially important to the low cost carriers for whom fast turnaround times are an integral part of their business model. These decisions will ensure that essential capacity and facilities will be delivered on an efficient and cost effective basis at Dublin airport when we need to cater for forecast growth in passenger traffic.
The importance of the other two State airports at Shannon and Cork and the contribution of the six smaller airports to regional development were also raised in the debate over the past two days. The airport authorities at Dublin, Shannon and Cork are currently preparing their business plans for submission to the Minister for Finance and me. The evaluation and outcome of this business planning process will provide greater clarity with regard to the most appropriate next steps to give effect to the restructuring and the establishment of Shannon and Cork as autonomous airport authorities. The Government fully recognises the important role of the smaller regional airports and we will soon announce the PSO air routes.
The decision taken was the right decision that allows Aer Lingus to compete on an equal footing. At present, it has one arm tied behind its back.
The Government does not have a good record in making the correct decision.
I respect the point of view of my colleagues. However, some do not understand or pretend they do not understand that to take any action other than freeing Aer Lingus to fully access capital markets would be to condemn the future of Aer Lingus.
It is being handed to the vultures.
Deputy Joe Higgins would shut the airline down.
If the Government has capital it should put it into Aer Lingus.
That is not the issue. The Deputy has missed the point.
This is a vote of no confidence in public ownership.
I call on Deputy Ó Snodaigh, without interruption.
Ag leanúint ón méid a bhíá rá ag an Aire, tá gach cinneadh a dhéanann sé mícheart, mar sin an sórt duine atá ann. Is cuid fhíorthábhachtach de bhuneagar na tíre seo é Aer Lingus, ó bunaíodh é sa bhliain 1936. Chuidigh sé le forbairt eacnamaíochta na tíre agus an oileáin seo, agus bhí sé riachtanach ag an am go raibh nasc idir muidne agus an domhan agus go raibh Aer Lingus i seilbh an Stáit. Tá sé fós lán chomh tábhachtach, ach anois tá sé fógraithe ag an Rialtas faoi dheireadh go bhfuil sé á phríobh-áidiú. Cuirimid in Sinn Féin i gcoinne an pholasaí sin, agus tacaímid go hiomlán le hoibrithe an chomhlachta agus le gluaiseacht na gceardchumann ina seasamh i gcoinne an mhargaidh atáá dhéanamh ag an Rialtas. The Government did not want to have this debate in the Dáil.
The Aer Lingus Bill 2003 provided for the employee shared ownership scheme. Tagged on to that Bill were sections which enabled the Government to sell the national airline at a time of its choosing and without direct reference to the Oireachtas. The Cabinet has now taken the fateful decision to sell out our majority share in our airline. The decisions on Aer Lingus and the airports will have implications for the jobs of thousands of workers and the future of the economy.
Deputy Ó Snodaigh without interruption.
Let it be noted that but for tonight's debate, this fundamental Government decision would not——
Sinn Féin's Mickey Mouse economics are in full flight.
——have been discussed in this House. That illustrates the types of slíbhín the Minister and this Government are.
Deputy Ó Snodaigh should read section 3(5) of the Bill.
Deputy Ó Snodaigh without interruption please.
The Government would have presented us with a fait accompli within months.
Deputy Ó Snodaigh should read section 3 of the Bill.
The motion gives Government Deputies the opportunity to state clearly where they stand on the privatisation of one of the State's vital strategic assets. They cannot dodge the question. Fianna Fáil Deputies especially cannot speak in whispers or from behind their hands to tell constituents that the Government made the decision and, while they are against it, their hands are tied.
That is Sinn Féin carry on.
That is the way Sinn Féin does it.
Fianna Fáil Deputies can vote "Tá" or "Níl" tonight, after which it will be a matter of public record whether they are in favour of privatisation.
Deputy Ó Snodaigh, without interruption.
That includes Deputy Glennon.
We know. The Deputy would sell off his mother if he could.
There was no attempt in the Government's amendment or Deputy Cowen's reply last night to refute the points made in the Sinn Féin motion that there is no impediment under EU competition rules to Government investment in Aer Lingus.
There is a raft of legislation.
From time to time, the Government has claimed that its hands are tied by the EU and it cannot put money into the company. The trade unions have clearly demonstrated that as a majority shareholder, the State could have invested and can still but for the decision of the Government to sell the airline.
Exactly. That is the answer.
Why are Swissair and Sabena gone?
The Government should invest in a company which is profitable, efficient and capable of delivery.
States could not give them aid.
I call on the Minister to reverse the decision. I call on Fianna Fáil backbenchers to stand with us in protecting a vital State asset.
I will never be seen standing with Sinn Féin.
Gabhaim mo bhuíochas le gach Teachta a ghlac páirt sa díospóireacht seo, ach go háirithe leo siúd a thacaigh leis an rún. Nuair a chuala mé cinneadh an Rialtais an tseachtain seo caite, ní raibh an dara rogha agam ach an dúshlán a thabhairt do gach Teachta seasamh go soiléir ar son nó in aghaidh Aer Lingus mar chomhlacht Stáit. Tá an rogha sin ag gach Teachta sa vótáil anocht.
I thank all Deputies who have participated in the debate, especially those who will support the motion. Deputies are being given a very clear choice tonight to vote for or against the sell-off and sell-out of our national airline. There can be no fudging now. The difference between the Sinn Féin motion and the Government amendment is clear and stark.
The privatisation of Aer Lingus is being carried out in the manner of a classic Fianna Fáil stroke. The final decision was a very long time in coming and there were many nods and winks to supporters and opponents of privatisation. While the Aer Lingus Act 2004 left the way open for the Government to make the decision, it held off and public opinion has been softened up over the period since. As the Taoiseach's party continued to vacillate over the options to develop Dublin Airport, it found a way to play down the momentous decision to privatise Aer Lingus. The Dublin Airport terminal saga was played out as a battle royal between the Progressive Democrats Party and Fianna Fáil in Cabinet. This allowed Fianna Fáil to give the impression that in last week's Cabinet decision it had won out over its Progressive Democrats Party partners by deciding the second terminal would be built and owned by the Dublin Airport Authority.
The Progressive Democrats Party's daft and unworkable proposal was for a second terminal owned by private interests and competing with the neighbouring first terminal, which scenario aviation experts assure us is unknown anywhere in the world. We are expected to believe that because the Progressive Democrats Party did not get all it wanted at Dublin Airport, Fianna Fáil has won a great victory. In the minds of many, the Progressive Democrats Party has won because its privatisation ideology is now the ideology of Fianna Fáil. The Progressive Democrats Party has gained one of the prizes it has always wanted which is the privatisation of our national airline, Aer Lingus. Unfortunately, the sleight of hand of the Government parties has been facilitated by many in the media who have never questioned the economic dogma of the Progressive Democrats Party and Fianna Fáil.
We should be very clear that this decision is based on dogma. While those of us on the left who oppose privatisation are always accused of purely ideological motives, in this case the ideology is all on the side of the privatisers. No commercial case has been presented for the sale of the State's majority shareholding in Aer Lingus. While Aer Lingus will need investment, we do not know what funding it will require to develop its business or how much the Government sell-out will yield. The Government's previous claim that it cannot invest in Aer Lingus owing to EU rules has been completely discredited. Last week's disastrous Cabinet decision closes completely the option of State investment.
In his reply to the motion last night, the Minister for Finance, Deputy Cowen, failed to provide a convincing rebuttal of the argument that in the case of Aer Lingus "it ain't broken, so don't fix it". Aer Lingus is a State company which has been returned to record profitability since the crisis of 2001, largely owing to the sacrifices of the workforce, many members of which were laid off. The taxpayer has invested in the company over decades and the investment has been repaid handsomely. The benefits in tourism, business generally and the employment provided by Aer Lingus and the aviation industry are incalculable.
The Minister for Finance tried to have it both ways in his contribution. He recognised Aer Lingus as a strategic national asset on the basis of which he promoted the Government's retention of a minority shareholding. He staunchly defended privatisation knowing that once the sell-off happens, all bets are off. The Minister for Transport, Deputy Cullen, knows that too. Our most vital transport link to the rest of the world is to go from public ownership to the open market. We are told the Government will retain strategic shares, which interest the Minister, Deputy Cullen, has restated. While we are told the name of the company will be retained, no guarantees have been offered. Nobody on the Government benches has shared such details with the House. There will be nothing to stop multinational interests buying up the company and disposing of it as they please.
Deputy Ó Caoláin does not understand. He should look at the articles of association of any company.
Such interests will not be concerned with Ireland's strategic transport needs.
Do not be silly, Caoimhghín. You are more intelligent than that.
Deputy Ó Caoláin should listen to the Minister rather than to a scriptwriter.
They will not be concerned with the maintenance of direct routes from Ireland to destinations across Europe and the United States of America. They will be concerned only with the bottom line. If the short-term stripping of the company guarantees them the return they want, it is their interests rather than the long-term interests of Ireland which will dictate the future of Aer Lingus.
It is not scaremongering, with respect to a Deputy who had the gall to rubbish Sinn Féin's focus on the critically important issue of linking our national rail network with Dublin Airport.
Sinn Féin did not know it existed before 2002. Its members never mentioned it.
Shame on all of you for failing to recognise the importance of integrated transport needs.
That old rhetoric does not work anymore.
If you want to check Sinn Féin policy, you need only look at it. If you want to look up Fianna Fáil policy on tourism——
Deputy Ó Caoláin, will you address your remarks through the Chair, please?
I do not want discussion across the floor.
If one checks the references to Dublin Airport or Aer Lingus on the website of Fianna Fáil, one will find only one reference. It is an attack by one of the Minister's back bench colleagues.
Read the programme for Government.
While one would expect Fianna Fáil to say something about Aer Lingus and the importance of our national airline in the context of tourism, the headline on its website tonight refers to Deputy Martin Brady's welcome of the freezing of the price of a pint of Beamish stout. That sums up the priorities of the party.
Ultimately, nothing will prevent Aer Lingus from being forced along the Ryanair route whereby trade unions are banned and standards lowered. We can be sure potential buyers will challenge in Irish and European courts anything they consider to be a restriction or undue regulation. Potential buyers will demand changes before they put their money into the company. They will demand the removal of any conditions laid down by the Government. Pressure will mount and they will get their way because the Government recognises already that this is its intent. Certainly, we recognise it. All this has been dismissed by the Government as scaremongering, but it was noteworthy in the speech of the Minister for Finance last night that he made no reply to the points we and other Deputies made about the privatisation of Telecom Éireann. That was presented by the Government as a retention by the people of a strategic national asset through the public share offer. We warned at the time that privatisation would be against the public interest, but we were dismissed as scaremongers. The Minister should hold his head in shame. Even the most vehement opponents of privatisation at that time hardly predicted the debacle that took place. The only thing the Minister is interested in is putting more money in the pockets of Tony O'Reilly and the rest of——
I despair for the country if Deputy Ó Caoláin's party ever got anywhere.
——those who are his fellow political and economic ideological travellers.
I ask Deputy Ó Caoláin to conclude.
I previously raised the concern of Aer Lingus pensioners about the future of their pension entitlements and Deputy Morgan did so again last night. The Minister for Finance replied that the pension fund was not in debt but he added, significantly, that this would be the case if there was a mandatory link to the consumer price index. I am assured by Aer Lingus workers that the CPI increases have been paid in all but two years over the five decades since the pension fund was set up in 1952.
I ask the Deputy to conclude.
If CPI linking is now to be set aside the real value of the pensions-——
The Deputy should conclude.
——of former Aer Lingus workers will be eroded. If the time is up——
It is. I have been very tolerant with the Deputy.
——I appeal, with other colleagues, to the backbenchers of Fianna Fáil, which calls itself the republican party — in its new newspaper The Nation I note the Taoiseach states: “Fianna Fáil is the republican party; the concerns of working people have always been at the heart of our policies.”
Deputies
"Hear, hear" the Deputies say. They have an opportunity tonight to vote on what matters in the interests of Irish workers.
(Interruptions).
Deputy Ó Caoláin should resume his seat.
They can vote with the Sinn Féin motion or they can turn their backs on Irish workers and on our national airline, Aer Lingus. Shame on every one of them.
Amendment put.
The Dáil divided: Tá, 66; Níl, 50.
Tá
- Ahern, Noel.
- Andrews, Barry.
- Ardagh, Seán.
- Blaney, Niall.
- Brady, Johnny.
- Brady, Martin.
- Brennan, Seamus.
- Callanan, Joe.
- Callely, Ivor.
- Carey, Pat.
- Carty, John.
- Collins, Michael.
- Coughlan, Mary.
- Cowen, Brian.
- Cregan, John.
- Cullen, Martin.
- de Valera, Síle.
- Dempsey, Tony.
- Devins, Jimmy.
- Ellis, John.
- Fahey, Frank.
- Finneran, Michael.
- Fitzpatrick, Dermot.
- Fleming, Seán.
- Gallagher, Pat The Cope.
- Glennon, Jim.
- Grealish, Noel.
- Hanafin, Mary.
- Haughey, Seán.
- Hoctor, Máire.
- Jacob, Joe.
- Keaveney, Cecilia.
- Kelleher, Billy.
- Kelly, Peter.
- Kirk, Seamus.
- Kitt, Tom.
- Lenihan, Brian.
- Lenihan, Conor.
- McEllistrim, Thomas.
- McGuinness, John.
- Moloney, John.
- Moynihan, Donal.
- Moynihan, Michael.
- Mulcahy, Michael.
- Nolan, M. J.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- O’Connor, Charlie.
- O’Dea, Willie.
- O’Donnell, Liz.
- O’Donoghue, John.
- O’Donovan, Denis.
- O’Flynn, Noel.
- O’Keeffe, Batt.
- O’Malley, Fiona.
- Parlon, Tom.
- Power, Peter.
- Roche, Dick.
- Sexton, Mae.
- Smith, Brendan.
- Smith, Michael.
- Treacy, Noel.
- Wallace, Dan.
- Walsh, Joe.
- Wilkinson, Ollie.
- Woods, Michael.
Níl
- Breen, James.
- Broughan, Thomas P.
- Bruton, Richard.
- Burton, Joan.
- Connaughton, Paul.
- Costello, Joe.
- Crowe, Seán.
- Deenihan, Jimmy.
- Durkan, Bernard J.
- Enright, Olwyn.
- Ferris, Martin.
- Gilmore, Eamon.
- Gormley, John.
- Hayes, Tom.
- Higgins, Joe.
- Higgins, Michael D.
- Howlin, Brendan.
- Kehoe, Paul.
- Lynch, Kathleen.
- McGinley, Dinny.
- McGrath, Finian.
- Mitchell, Olivia.
- Morgan, Arthur.
- Moynihan-Cronin, Breeda.
- Murphy, Catherine.
- Murphy, Gerard.
- Naughten, Denis.
- Neville, Dan.
- Noonan, Michael.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O’Dowd, Fergus.
- O’Keeffe, Jim.
- O’Shea, Brian.
- O’Sullivan, Jan.
- Pattison, Seamus.
- Penrose, Willie.
- Perry, John.
- Rabbitte, Pat.
- Ring, Michael.
- Ryan, Eamon.
- Ryan, Seán.
- Sargent, Trevor.
- Sherlock, Joe.
- Shortall, Róisín.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Upton, Mary.
- Wall, Jack.
Tellers: Tá, Deputies Kitt and Kelleher; Níl, Deputies Ó Snodaigh and Stagg.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided by electronic means.
As a teller, under Standing Order 69 I propose that the vote be taken by other than electronic means.
As Deputy Ó Snodaigh is a teller, under Standing Order 69 he is entitled to call a vote through the lobby.
Question again put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 65; Níl, 46.
Tá
- Ahern, Noel.
- Ardagh, Seán.
- Blaney, Niall.
- Brady, Johnny.
- Brady, Martin.
- Brennan, Seamus.
- Callanan, Joe.
- Callely, Ivor.
- Carey, Pat.
- Carty, John.
- Collins, Michael.
- Coughlan, Mary.
- Cowen, Brian.
- Cregan, John.
- Cullen, Martin.
- de Valera, Síle.
- Dempsey, Tony.
- Devins, Jimmy.
- Ellis, John.
- Fahey, Frank.
- Finneran, Michael.
- Fitzpatrick, Dermot.
- Fleming, Seán.
- Gallagher, Pat The Cope.
- Glennon, Jim.
- Grealish, Noel.
- Hanafin, Mary.
- Haughey, Seán.
- Hoctor, Máire.
- Jacob, Joe.
- Keaveney, Cecilia.
- Kelleher, Billy.
- Kelly, Peter.
- Kirk, Seamus.
- Kitt, Tom.
- Lenihan, Brian.
- Lenihan, Conor.
- McEllistrim, Thomas.
- McGuinness, John.
- Moloney, John.
- Moynihan, Donal.
- Moynihan, Michael.
- Mulcahy, Michael.
- Nolan, M. J.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- O’Connor, Charlie.
- O’Dea, Willie.
- O’Donnell, Liz.
- O’Donoghue, John.
- O’Donovan, Denis.
- O’Flynn, Noel.
- O’Keeffe, Batt.
- O’Malley, Fiona.
- Parlon, Tom.
- Power, Peter.
- Roche, Dick.
- Sexton, Mae.
- Smith, Brendan.
- Smith, Michael.
- Treacy, Noel.
- Wallace, Dan.
- Walsh, Joe.
- Wilkinson, Ollie.
- Woods, Michael.
Níl
- Breen, James.
- Broughan, Thomas P.
- Burton, Joan.
- Connaughton, Paul.
- Costello, Joe.
- Crowe, Seán.
- Deenihan, Jimmy.
- Durkan, Bernard J.
- Enright, Olwyn.
- Ferris, Martin.
- Gilmore, Eamon.
- Gormley, John.
- Hayes, Tom.
- Higgins, Joe.
- Higgins, Michael D.
- Howlin, Brendan.
- Kehoe, Paul.
- Lynch, Kathleen.
- McGrath, Finian.
- Mitchell, Olivia.
- Morgan, Arthur.
- Moynihan-Cronin, Breeda.
- Murphy, Catherine.
- Murphy, Gerard.
- Naughten, Denis.
- Neville, Dan.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O’Dowd, Fergus.
- O’Keeffe, Jim.
- O’Shea, Brian.
- O’Sullivan, Jan.
- Pattison, Seamus.
- Penrose, Willie.
- Perry, John.
- Rabbitte, Pat.
- Ring, Michael.
- Ryan, Eamon.
- Ryan, Seán.
- Sargent, Trevor.
- Shortall, Róisín.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Upton, Mary.
- Wall, Jack.
Tellers: Tá, Deputies Kelleher and Kitt; Níl, Deputies Ó Snodaigh and Stagg.
Question declared carried.
