Deputy Sean Fleming was in possession and has completed his contribution. I call Deputy Willie O'Dea. Are you sharing time?
Aer Lingus Share Disposal: Motion (Resumed)
I am sharing time with Deputy Martin. How long do we have?
There are 17 minutes left in the slot.
There is a lot I want to say in relation to this matter.
The Deputy has 17 minutes in which to say it.
I do not have 17 minutes because, as I said, I am sharing with Deputy Martin. Deputy Martin wants to make some important points on the Nyras report, so I will confine myself to highlighting a few points.
Any objective observer looking at the events that have transpired in this House and outside it in the past few days would be forced to conclude that there is collusion between IAG, Aer Lingus and the Government to bypass the public and the Oireachtas on this important decision.
The Minister will be aware that his own members and the Labour Party members of the Committee on Transport and Communications insisted that the committee should consider this matter in detail before the final decision was taken. They have renegued on that, however, and there is not a tweet about it.
I cannot understand why at this particular time the Government would decide to hive off its 25.1% shareholding in Aer Lingus, which is well on the way to being one of the most successful small aviation companies in the world, to a foreign multinational. It is certainly an excellent deal from IAG's point of view. What IAG is getting will exceed by several hundred million euro, perhaps half a billion euro or more, what it is paying. If the Minister does not take my word for it let him look to the ultimate authority, the London stock exchange. IAG shares rose sharply on the London stock market as soon as this deal was announced. The market has taken the view that whatever about Aer Lingus, the Irish taxpayer and connectivity, it is an outstanding deal for the multinational.
The Minister will also be aware that connectivity is of central importance in my region where a high percentage of people are employed by multinationals. The Taoiseach and the Minister have told us repeatedly that this deal, in so far as we know anything about it, protects connectivity more than the deal that was entered into by the previous Government in 2006. In other words, they are essentially saying that the State will now have more influence on what happens in Aer Lingus when it holds a single share and has nobody on the board, than it had when it held 25.1% of the shares and had two directors on the board. That is a totally unsustainable proposition.
I can well remember the events of 2007 when the board of Aer Lingus decided to reallocate the Heathrow slots at Shannon to Belfast. I can recall the battle that went on over that, as well as how the decision was reversed literally within a year. As someone who was centrally involved in the fight to get those slots back, I can state that it was of enormous benefit to us that we had two State directors on that board. Without their presence on the board it probably would not have happened.
In substitution for two directors and a 25.1% shareholding, we are told that the golden share will protect connectivity in a more substantial way. The Minister, Deputy Donohoe, said the golden share gives the Minister for Finance the right to object to or challenge a disposal of the slots. Somebody else said it was a veto, but which is it? In any case it is a moot point. These golden share deals have been found to be illegal under European law in a number of other jurisdictions. In addition, even if the golden share did provide the protection that the Government claims, it expires after seven years. As far as workers and businesses in the mid-west are concerned, there is not a great difference between five and seven years.
As I understand them, these terms which are supposed to keep the question of connectivity within the remit of the Government, will be put into the company's articles of association. The Minister should be aware that any public company can change its articles of association by special resolution, which is a 75% vote, at any time. This is set out in statute law on all the model articles of association. In addition, there is a great deal of case law surrounding the legislative provisions, beginning in 1903 in the case of Punt v. Symons & Co. Limited, followed by the case of Southern Foundries (1926) v. Shirlaw in 1940. Those cases are cited with approval by the superior courts in Ireland and Britain right to this day.
They have established a simple proposition that if a company wants to change its articles of association, and that change results in breaking a deal on which the present format of the articles of association depend, then there is no right to seek an injunction to prevent the articles of association from being changed. The State can presumably sue for some level of damages, but that is cold comfort for people in my area who are worried about connectivity and whose jobs depend on it. There is therefore no absolute guarantee and, in effect, it does not matter whether disposal includes sale or leasing.
The Minister talked about the protection of employment, but the only guarantee we have of that is the statement by the chief executive that he does not envisage compulsory redundancies or further outsourcing. The registered employment agreements, REAs, are then dragged in to give the illusion that something wonderful is being done. We are told that the REAs are being reintroduced and will be extended to categories of workers not already covered. The fact of the matter, however, is that according to the Government's own Industrial Relations Bill, which has just been published, REAs deal only with terms and conditions of employment. They will not save one job.
In addition, section 20 of the Industrial Relations Bill 2015 allows the employer - in this case it will be Aer Lingus as owned by IAG - to apply to the court at any time to get out of its commitments under an REA. Therefore the so-called protections and guarantees are illusory rather than real. IAG is not a charity and its primary focus is not the protection of connectivity or jobs in the mid-west or elsewhere - it is to drive shareholder value. All the decisions will be driven by that alone.
At this late stage, I appeal to the Minister to suspend the vote on this matter. As his own Deputies demanded, he should allow the Committee on Transport and Communications to discuss the matter at length next week so that we can at least know what we are getting into. At the moment we are in the same position as someone who gets a phone call from their solicitor saying: "We haven't got the papers on this and have not got sight of the deal, but I am signing a very important contract on your behalf at 11 o'clock this morning. You can't see the contracts or the powers, but I'm signing it on your behalf and you'll have plenty of time to study it afterwards." Effectively, that is the position we are in.
I have yet to hear from the Government a compelling rationale for the sale of the State's 25.1% share in Aer Lingus. The manner in which the Government has handled the Dáil in this debate has been shameful and shocking, given the fact that there has been a lack of any transparency and honesty in the presentation of the facts, particularly as they relate to workers. Given the revelations in the Nyras report, it is now imperative for the Government to suspend today's debate and vote, and allow Deputies to tease these issues out properly at the Committee on Transport and Communications.
The problem is that the Government always prefers spin more than substance. It is always about telling a good news story as opposed to the realities that are inevitably down the line following the sale of this 25.1% share. That is revealed in the Nyras report. The Taoiseach said yesterday that he was not aware of that report and had no knowledge of it. Did the Minister for Transport, Tourism and Sport, Deputy Donohoe, have any knowledge of it? Did the executives in Aer Lingus show him this report? Did the Minister take the decision to recommend the sale of Aer Lingus without any inkling or knowledge of this report?
Was he aware of it? It is quite significant. Despite what was said this morning on the radio by the chief executive officer of Aer Lingus, it is about staff and cost-cutting. It is not just cost-cutting agreements with outsourcing companies and so on. The report compares Aer Lingus with Vueling and EasyJet and it is all around costs. With regard to seasonality and legacy staff, it states:
Aer Lingus self-handles at Dublin, Cork and Shannon at an average cost of €1,326 per turnaround. However, the relatively inflexible labour agreements increase this cost to €1,432 in the winter, thus adding €2.3 million to the cost base.
The Minister knows what that means. In referring to "inflexible" labour agreements, we are going to change that. The report continues, "In addition, the legacy staff costs, compared to EasyJet's market rates, adds €12 million of costs." The report continues and refers to how reviewing each of these in collaboration with the commercial team "could be a profit improvement opportunity."
There are other comparisons. The report indicates that the ground handling costs of Aer Lingus are higher than both EasyJet and Vueling by 30% and 45%, respectively, for each turnaround. The report indicates that Aer Lingus self-handles at its Dublin, Cork and Shannon stations, whereas EasyJet and Vueling are outsourced. There is a clear implication in that. The report indicates that the main challenge for Aer Lingus is to review clearly its desired product offering and define a new lean model, which can form the basis for "restructuring" labour agreements to provide seasonal and daily flexibility. No wonder the letter from IAG is so meaningless and no wonder it is a classic of its kind in seeking to camouflage what will really happen. IAG cannot give the commitments that the Government wanted and which it is trumpeting to unions. It is in black and white in the report where this is heading.
The report continues by stating that a leaner structure will help to reduce self-handling costs and provide a basis for renegotiating with third-party handlers and so on. Vueling, the company that Aer Lingus is being compared with, is known for having very aggressive employment contracts; they are the lowest in Europe, alongside Wizz Air and Ryanair. EasyJet uses Vueling's pilot contract as a template for its Lisbon operations. Vueling deliberately pays cabin crew low salaries to encourage staff turnover. Average turnover is 40%, with ideal tenure at six to 12 months. The report argues that Vueling seems to be very good at dealing with extreme seasonality in this way. The report analyses per-seat pilot costs. Aer Lingus's utilisation is 715 hours per pilot whereas EasyJet's is nearer 850 hours. The Aer Lingus pay structure, particularly for long-service staff, is responsible for part of the cost gap, according to the report.
I am listing all these elements as it is very clear where we are heading. Nevertheless, the Government is painting a totally different picture and is not telling the truth. There should be a wider debate about this. I expect there will be a wider debate. In agreeing the sale of 25% of Aer Lingus, we are being asked, on the Government's recommendation, that we collude and go along with the process without question or even having the decency to tell people as it is in real terms.
EasyJet, for example, has fewer pilot crews per aircraft, according to the report, and it achieves a higher level of overall productivity in how it utilises pilots and so on. It has 2,000 pilots working an average of 850 hours per annum, compared with Aer Lingus pilots working 715 hours per annum. The implications of that are very clear with respect to pilot and staff conditions but there has been no discussion about that. Crew costs also loom large. The report indicates that EasyJet addresses line maintenance seasonality by outsourcing but Aer Lingus has a fixed line maintenance cost with additional inter-check work in the winter season. It states that Aer Lingus employs 100% licensed engineers, so what does that mean? What is the implication of that? This morning, we were told this report was only about costs relating to outsourcing and how better deals can be achieved with different companies. The clear implication is that Aer Lingus should outsource more operations and get rid of permanent and longer-term staff. That is coming right through this report. The idea is that the younger the staff, the lower the cost and so on. That is the nature of the report.
There is an onus on the Government and the board of Aer Lingus in making its presentation to the Government to make available this report. Is that what we want? There is no point having low pay commissions etc. if we are just going along and nobody is shouting "Stop". Piketty writes in his major tome about the growing gap between worker pay and corporations, and this is a big issue in society. I have been reflecting on this and it is something we must debate.
The report indicates that the administrative staff support costs in Aer Lingus are too high, as the basic salary costs for managerial and support staff in Vueling is low. It goes through its administrative head count and compares it with Aer Lingus. We all know, thanks to the publication of the Nyras report, where all this is heading. The report states with respect to staff count that "Aer Lingus's ground-based operational and administrative head count equates to 55 full-time equivalents per aircraft, five times as high as EasyJet's 11 full-time equivalents per aircraft." It indicates that after adjusting for the fact that ground handling and catering are outsourced by EasyJet and there is no cargo operation, Aer Lingus has 40% more staff per aircraft than EasyJet, with the cost advantage to EasyJet at €13 million. This implies that Aer Lingus is heading in the same trajectory as the Vuelings and EasyJets of this world, which has serious implications for staff working in Aer Lingus. Instead of doing a snow job and pretending all is rosy in the garden-----
What is a snow job?
It is a Cork phrase. It is a colloquial expression. The Government is pretending everything is rosy in the garden and everything is going to be all right but it is very clear that this is not the real story. It is quite shocking. The Taoiseach would not tell us about this the other day in the Dáil. He had to have an orchestrated and managed public relations exercise on Tuesday night before coming in yesterday morning to ram this through the House. I now know why. If this were left hanging around for a couple of days, God knows what else would come out. People would find out the truth.
There is a long list in the report. It states that Aer Lingus's main cost disadvantage is in cabin crew fixed overheads. One can imagine if a company is going to buy the company, it can see the bottom line for profit. Workers would be seen as just numbers, with terms and conditions being immaterial and inconsequential, it seems. We have had no discussion about that. In summing up, the report concludes:
We believe that the airline should set aggressive but achievable targets for short-haul cost efficiency at a minimum of €60 million or €5 to €6 per seat. This should in turn be co-ordinated with the CORE programme initiatives.
It also lists the various reductions in a table of minimum potential savings. The figures are €2.9 million for ground handling and €5 million for overseas bases. There is a comment, "Can we drive better pilot utilisation?", with €1.8 million pencilled in. The cost base for cabin crew would be down another €1.1 million. There is a suggestion of hangar efficiency and heavy maintenance going to eastern Europe. The report mentions a detailed review of IT accommodation staff and so on.
I do not believe the Minister has been up-front about this. Maybe he did not know about this report, and if he did not, it is an even more serious matter. That is why the issue should not be rammed through. The Government rammed through legislation for Irish Water and the Irish Bank Resolution Corporation, and now we have the same issue with Aer Lingus. There has been no proper assessment or analysis; there has been spin over substance. Above all, the workers deserved to have been told the truth about the implications of this sale and where Aer Lingus is heading.
I understand Deputy McNamara is sharing time with Deputy Maloney.
I am thankful for the opportunity to speak to this motion on the disposal of the shares in Aer Lingus, about which so many questions remain. In that context I question the timing of this motion and the haste with which it is being moved. I understand that market takeovers require movement but, ultimately, the permission of the House is required for the Minister to dispose of the shares. We are a long way off that yet.
We are at least six months if not a year off that. I do not know why, therefore, we are giving a carte blanche at this stage. Nevertheless, I welcome the contribution the Minister for Finance, Deputy Michael Noonan, made to yesterday's debate in which he acknowledged the importance of connectivity to and from the island of Ireland. He said it was crucial for economic growth across the country, not just in Dublin. I recall the recent announcement by the Minister of State, Deputy Gerard Nash, of jobs in Shannon. One of the key factors he attributed to being able attract American companies to Shannon was its connectivity to the USA and Heathrow. Shannon Airport was established to be the driver of growth in the mid-west and it had achieved that up to the time Fianna Fáil in its wisdom decided to abandon it in favour of Dublin. Nevertheless, for a long period in its history, it was the driver of growth in the mid-west and it is again, largely because of decisions this Government has taken and which I have supported.
The Minister for Finance said that long-term investment decisions such as foreign direct investment into Ireland are much easier to make in an environment of certainty. He said the level of certainty provided by this transaction as part of our broader efforts is supportive of economic growth. I welcome his acknowledgement of the importance of connectivity and certainty in that regard. The Minister went on to spend some time explaining how these commitments regarding connectivity were to be secured. They were to be secured by providing certain rights to the Minister for Finance and his successors through the retention of one share in Aer Lingus, which will be designated a "B" share. The Minister said the benefit of the commitments was that the rights attaching to the "B" share will be enshrined in the articles of Aer Lingus to allow the holder of the share to object to any proposals deemed contrary to the national interest, such as the disposal of Aer Lingus's Heathrow slots or a proposed cessation of the operation of Aer Lingus's Heathrow slots on certain Irish routes for five years and up to seven in the event that airports do not unduly raise their prices.
While this is welcome, those who have been around the House a lot longer than me will recall that when Greencore was privatised in 1991 a similar golden or "B" share scenario was put in place to give the Government a veto over the sale of the sugar division where that was deemed not to be in the national interest. A few years later, doubts were cast on that golden share agreement in a ruling of the European Court of Justice in 2003 to the effect that Britain and Spain broke EU law by holding golden shares allowing them to maintain a degree of control over privatised companies. The EU's highest court ruled that controls on the privatised British Airports Authority, which owned Heathrow, and five Spanish companies breached the EU treaty by restricting the free movement of capital. At the time, The Irish Times wrote, "This ruling could also have interesting implications for the Government if it decides to privatise other State assets such as Aer Lingus or Aer Rianta". As such, I ask the Minister for Transport, Tourism and Sport if the slots at Heathrow are capital assets.
If they are not capital assets, what are they? If they are capital, it appears that there is at least a strong argument to be made that they should be allowed to move.
That is the advice the Government got. He is right.
Where is Irish Sugar now? Where is the sugar division? When I was canvassing for the Labour Party recently, I saw its rusting remains on the outskirts of Carlow town. In fairness to the Minister for Transport, Tourism and Sport, I appreciate that he took time very late last night to meet with me with his officials to seek to allay my concerns. I thank him for that courtesy. I understand the Minister has been in extensive negotiations with the European Commission's Directorate General for Financial Stability, Financial Services and Capital Markets Union in the run up to this announcement and that it has no objection to the proposal. In fact, it may have indicated that it is willing to accept it. However, the deal has yet to be examined by the Directorate General for Competition, which took the cases against the UK and Spain to which I have referred.
I assume that a letter of comfort will be sought, but even if it is obtained, it is only a letter from one Commissioner for the duration of one Commission. That is all. Letters of comfort have been delivered in the past notwithstanding which infringement proceedings have been taken. Furthermore, I am not so concerned about Commission proceedings given that the Commission has ultimately accepted the status quo which gives the Government a degree of control over slots. My greater concern is on the enforceability of the "B" share mechanism and whether a Minister could in future enforce it against IAG. If a British or Spanish court or the ECJ were to find it contrary to EU competition law or a domestic court were to find it contrary to domestic competition law, it would not be possible to enforce the "B" share rights. I mention the UK's Competition and Markets Authority in particular because Heathrow is located in Britain and has the experience of having its own golden share held by the British Government struck down as being unlawful. Furthermore, the UK's Competition and Markets Authority has shown considerable teeth in its dealings with Ryanair. It has shown more teeth than the Irish Competition Authority generally demonstrates unless, of course, it is raiding the IFA offices on foot of concerns about below-cost selling by multiples.
Turning to the deal itself, it is undoubtedly very good news for Dublin Airport. I have studied IAG's 34 page indicative offer in detail and it has a lot of specifics for Dublin Airport, which is set unambiguously to become Ireland's gateway hub for international traffic. Mr. Willie Walsh, the CEO of IAG, which is one of the largest aviation companies in the world, was clear about this at the joint committee. It would be churlish at this stage to fail to acknowledge that Mr. Walsh is one of the greatest Irish businessmen of his generation. His negotiation of this deal has been masterful, but his only duty is to his shareholders. For him to have any other considerations would be unlawful. Looking at the deal, one thing is clear, namely, Dublin Airport is approaching capacity and will soon need a new runway. Passenger numbers last year stood at 21.7 million and this year numbers are expected to exceed 24 million. IAG alone is projecting an increase in passenger numbers of 2.4 million as a result of this and other airlines are also seeking to increase their passenger numbers. The Commission for Aviation Regulation has stated that a new runway will be allowed when passenger numbers reach 25 million. That is next year, but where is the runway? Is it going to be allowed? Who is going to fund it?
When a second terminal was to be funded at Dublin Airport, Aer Rianta International was brought into the Dublin Airport Authority group by Fianna Fáil to fund it. This, of course, is the same Fianna Fáil that objected to Aer Rianta International being in Dublin Airport after having brought it into the Dublin Airport Authority group. Fianna Fáil does not have a great deal of credibility on this issue when it objects to the sale of a 25% shareholding, having sold a 75% shareholding. It is not so much warning that we should close the stable door after the horse has bolted, rather it galloped the horse out the stable door and is now looking back over its shoulder having had an unfortunate demise. In now warning that the stable door should be closed, it is a little bit late.
We will get to Deputy McNamara's credibility in a few minutes. We will see how credible he is.
I understand that Deputy Eamonn Maloney has agreed to give me five minutes of his time and I appreciate it.
Is that agreed? Agreed.
Given the congestion that is approaching, what will happen if IAG cannot continue to grow its numbers at Dublin Airport? I presume a new runway in Dublin will attract the same controversy and difficulty as the proposal for a new runway at Heathrow. The fact that there is no new runway at Heathrow is one of the main reasons IAG is interested in Dublin in the first place. While it may well offer opportunities for Shannon and Cork, and I certainly hope it does, that is only if IAG is interested in Dublin and Shannon. It is not that clear. There is very scant and aspirational information contained in the indicative offer about Shannon. It says IAG will "aspire to enhance". The document says that growth opportunities with tourism and business interests will be pursued and that future support will be provided for existing airlines. It is a lot shorter on detail in respect of Shannon than in respect of Dublin. Aer Lingus does not have a history of any commitment to Shannon except where it has been forced by the Government through the Government shareholding.
It is one thing to have a golden share if one can enforce it, but we have great confidence generally in free markets. Free markets are a very good thing and I am not advocating state control of the economy or anything like it, but when Fianna Fáil privatised Eircom, we were told it would be a wonderful thing. It was going to be able to attract the finance necessary to develop a world-class telecommunications network. At the time of the privatisation, we had a world-class telecommunications network in this country, but now one cannot get broadband in the largest town in my constituency.
Companies and offices cannot get broadband to grow their businesses. Throughout the rest of rural Clare, there is no broadband. I appreciate the efforts of the Minister for Communications, Energy and Natural Resources, Deputy Alex White, in that regard. It is announcement after announcement and strategy after strategy but he is effectively powerless. All he can do is telephone the companies and ask them what they would like to do. Without a shareholding in the company, it is not possible to direct them to do anything.
Delegates from Eircom come in here regularly with briefings for Deputies and tell us when certain exchanges will be upgraded. The following year they come in and say they got it wrong but that they will be upgraded. That is all we can do because it is a private company. I do not think the privatisation of Eircom has affected Dublin, Cork or perhaps Limerick, but it is affecting Ireland and its economic development. We remain an island nation. I do not need to point that out. It is one thing to privatise an airline on mainland Europe when it is possible to get a train from, say, Paris to Moscow overnight, but we are uniquely dependent on our connectivity and that is a major concern for me.
When Willie Walsh attended the transport committee he had very little concrete information on Shannon but he did say that Aer Lingus was in the business of selling seats. He said that it was able to profitably sell seats from Shannon to north America and Heathrow and that it would therefore continue. The Minister for Public Expenditure and Reform said something similar yesterday when he said, "Everybody in Aer Lingus knows that jobs and profitability, which are connected, are ultimately determined by the sale of seats. That is the only constant in the airline business". In Shannon we know that is not enough. Notwithstanding full flights leaving Shannon for London Heathrow, the flights were pulled. Almost like a dog who saw a bone in the water and went for it, Aer Lingus opted to operate out of Belfast. It thought it would make a bit more money in Belfast and Shannon was left high and dry. That had a detrimental impact. I have no doubt, regardless of the bona fides of Willie Walsh or Mr. Kavanagh, that profit and profit alone will drive this. That is what the markets are about, which I welcome, but connectivity is key to the future of this State.
I welcome the commitment by Aer Lingus to enter into registered employment agreements with its workers, even if the legislation which will underpin them is not yet in place. I look forward to supporting the Minister of State, Deputy Gerald Nash, when he brings the necessary legislation through the House. I also have confidence in the last-minute commitment by Aer Lingus this morning that there would not be compulsory redundancies. I understand the CEO said that on the airwaves. I welcome that statement and I have no doubt it has been made because of the work of the Labour Party in government. However, I hope the CEO has in turn received the same guarantees from his employers, his future employers and their future employers, and that he will be in a position to honour what he said today. We know that there are no certainties in the shifting world of aviation consolidation. Indeed, from the time it first mooted its interest in Aer Lingus to now, there has been a suggestion that IAG itself might be subject to a takeover bid.
I thank the Minister for Transport, Tourism and Sport for the courtesy he has shown me and the work that has been done to meet the Labour Party's concerns. However, many questions remain outstanding. I have questions which remain unanswered and, in that context, I am not prepared to gamble with what I believe is key to the economic development of this State, all of this State. As we enter 2016 with talk of developing all parts of the country equally, connectivity is key, particularly connectivity to the mid-west. I do not have confidence in the guarantees as they currently stand. On that basis I regret that I will not be able to support the Minister in the motion this afternoon.
As a member of the transport committee, I will endeavour not to repeat some of the issues that have been debated both at the transport committee and in the intervening period since IAG's original offer. I will focus on a small number of issues. To confine myself to the two-day debate on IAG's second offer, I have noticed a tendency for many Deputies on the opposition benches to give, for want of a better word, the impression we are talking about a State asset. We are not talking about a State asset. We are talking about one private company going into enterprise with another private company, IAG. If Aer Lingus were a State company, I would have a different view on the issue. However, Aer Lingus is no longer a State company but rather a public limited company with the State, on behalf of the taxpayer, holding a 25% share in it.
There has been an attempt to create an argument based on Aer Lingus's image since its foundation in 1936 and the attachment to it. However, all of that changed when Aer Lingus was floated on the stock exchange in October 2006 by those in the benches opposite. That is its history. I am not one to rush to the defence of Fianna Fáil but, interestingly, the Irish people clearly have an affinity with free enterprise and capitalism because following the flotation of Aer Lingus on the stock exchange, Fianna Fáil scarcely lost any support in the 2007 general election. Some of those who sit behind Deputies Martin and O'Dea and condemn Fianna Fáil for privatising Aer Lingus should have used the opportunity, if they had such a hang-up about Aer Lingus being privatised, to move a motion to bring it back under State control but there was no such motion.
It was a huge success.
They ran with this issue as if they were dealing with a State entity, which it is not.
It was successful. It worked.
That is for another day.
A shareholding of 25.1% is valuable. It is legally more valuable.
Whatever about what the State will get in terms of a potential sale, I wish to move on to the perspective of workers and trade unions. I joined a trade union at the age of 16. I have been a member of unions all my adult life and a shop steward for most of it. The principal concerns for people on this side of the House are redundancies and outsourcing. These were foremost in the minds of SIPTU and IMPACT when they spoke to probably all of us. In thrashing out a deal to protect those who currently work in Aer Lingus and those who will work there in the future, unions do what unions are supposed to do. They try to get the best deal for the people they represent. That is why unions exist. No negotiations end up with workers getting everything. It has never happened. Perhaps someone has an example of it happening-----
Is Deputy Maloney asking me?
-----but it certainly never happened during my time with unions, and I have been involved in strikes, lockouts and everything else. As Jim Larkin said one year after the Lockout, one gets as much as one can and one keeps it. That is what SIPTU and IMPACT are doing. As Deputy Michael McNamara said, the Labour Party as a minor party in this Government has used its influence as best it possibly could in dealing with a marriage between a private company, Aer Lingus, and another private company, IAG.
I will keep my word and finish on time.
I understand Deputy Jonathan O'Brien wishes to share time with Deputy Brian Stanley.
It was interesting to listen to Deputy Michael McNamara voice his concerns about the proposal before us. He hit on the crucial issue - connectivity. I do not need to tell the Minister that, as an island nation, connectivity is essential to us for our economic development, the tourism industry, exports and imports and our overall prosperity. This is a very small island on the periphery of Europe and the economy needs to be consistent and secure. Connectivity is a crucial part of this and we should not jeopardise it by removing the links Aer Lingus provides. There is consensus among the experts who have spoken about IAG's offer that Aer Lingus is crucial to that connectivity as it controls many of the sought-after slots at Heathrow Airport, which are the envy of many airlines throughout the world. The slots are crucial to Ireland's interests. The CEO of IAG is on the record as saying the company needs extra slots to serve the very profitable and expanding Asian and South American markets from Heathrow Airport. Any proposal by IAG to ensure extended access on Irish routes from Heathrow Airport will only delay the inevitable loss of these slots, whether in five or seven years. In the future the slots will be used to provide services on the more profitable Asian and South American routes because ultimately that is what it is all about. It is about profit at the end of the day. IAG does not have the interests of Ireland as its driving force in this offer. Its interests, rightly so, are its shareholders and profitability.
There are also very real concerns for the workers about potential job losses. We received some assurances today that there will be no compulsory redundancies. That is to be welcomed, but an assurance and a guarantee are two different things. The publication of the Nyras report raises a lot of concerns about potential job losses. One only has to look at the record of IAG where it has taken over other airlines. Many Deputies will have spoken about Iberia, in which nearly 4,500 jobs were lost after the takeover, prompting the Spanish tourism Minister to say in 2013 that the sale, two years previously, had actually proved detrimental to the Spanish economy. I have also not seen any resolution of the issues faced by workers regarding the Aer Lingus pension scheme and the cuts in entitlements that they are facing need to be discussed.
I do not understand why this issue could not have been sent to the Joint Committee on Transport and Communications for at least one week in order that it could study the proposal in full and tease out the details of the Nyras report, which has now become available but which the Taoiseach has said he has not read to date. I do not know whether the Minister had the chance to read it before he brought the proposal to the Cabinet yesterday. If he did not, has it changed his opinion on the haste with which the Dáil is trying to rush this motion through this afternoon? Taking a week out and leaving the Joint Committee on Transport and Communications to do a job of work in analysing all aspects of this offer would be a prudent move. The outcome might very well be the same this time next week and we might still be voting on it, but we would at least be doing so in the knowledge that everything had been examined by a committee made up of members of all political parties and none in this Chamber. Questions Deputy Michael McNamara, who raised some genuine concerns, and other Deputies may have could be addressed at the committee. The Minister knows that committees do some very good work. The Joint Committee on Transport and Communications should be given such an opportunity in this case.
The short-term commitments from IAG will be of no use to Ireland in the future if we lose the slots held by Aer Lingus. The commitment to maintain jobs will ring very hollow when one looks at the thousands of jobs cut from Iberia. I do not think the guarantees are sufficient or that a two-day debate is sufficient. I, therefore, ask the Minister to reconsider.
There is no doubt that the proposal puts a great focus on and stresses the potential of Dublin Airport. Deputy Michael McNamara spoke about Shannon Airport and I want to speak briefly about Cork Airport, on which there is not much detail in the report. There is some mention of the possible expansion of routes, but in reality there is very little detail about Cork Airport. It is suffering enough as it is and the proposal could have a detrimental impact in the long term on regional airports, including Cork and Shannon. The Taoiseach said yesterday that the sale would do great things for Knock airport and would expand the routes out of it, but we have not received any assurance in Cork that routes will be expanded. One of the biggest impediments to Cork Airport is that the runway is not long enough to take international flights. Cork is the second largest city in the Twenty-six Counties and if we want to build economic hubs and attract foreign direct investment, surely Cork Airport needs to be expanded to enable it to compete on that front with Dublin and Shannon airports.
I have concerns about this proposal, as many other Opposition Deputies do. I know that the Labour Party raised many concerns when the deal was first mooted, but all of its Deputies bar one, to my knowledge, have now accepted the assurances given by IAG and the Government. Deputy Michael McNamara has indicated that he is unable to support the proposal at this time. The Minister may not believe it is possible to build a consensus across the Chamber because this is politics. The Government proposes something which the Opposition opposes. However, if he wants to build a consensus on an issue such as this, which is of strategic economic importance to the long-term interests of Ireland, we need to get into the committee to discuss all aspects, including the Nyras report, and come to an informed decision. I implore the Minister to consider suspending the vote today, referring the matter to the Joint Committee on Transport and Communications for three days next week and awaiting the outcome of its deliberations.
I welcome the opportunity to speak on this matter. I would rather we were not here this morning discussing the sale of what is left of Aer Lingus after the Fianna Fáil sale of the century. That party sold off three quarters of the company. The sale of the remaining shares in this company is bad for workers, customers and the economy. It is not only Sinn Féin that is saying that because the late Garret FitzGerald said it many times. I heard him speak at length about this. Many economists on the right, left and centre have outlined their position on and concerns about this in the recent and not-so-distant past.
The Minister and I know the guarantees are not worth the paper they are written on. I will tell him why they are not. All one has to do is look at the Irish Constitution and EU competition laws. The solicitors and barristers will have a field day. If any future Government, union or other body ever has the liathróidí to stand up to the international company IAG, take it on and try to challenge it over this, it will not be able to do so. IAG will rule the roost as it will own the company. When one sells something, it is gone. The conditions will not stand up to international, European or Irish law, and that is the fact of the matter. The guarantees are simply letters of comfort. All too often, we have seen where letters of comfort lead one; they lead one into a false comfort zone that brings one nowhere.
I heard Fianna Fáil having a go at the Government over this deal. It is correct to outline the problems with it but it was sickening listening to Fianna Fáil criticising the Government for selling off the remaining 25% share when Fianna Fáil itself sold three quarters of the company. Fianna Fáil is criticising the Government for selling a quarter of the company although it sold off three quarters of it for a fraction of what the Minister is supposed to be getting for one quarter. Deputies Seán Fleming and Timmy Dooley outlined their great concerns over this deal on the airwaves over the past few days. One could fall around the place laughing at the good of it but we want some consistency. It will be a bad day for Ireland, workers and the economy and the customers of Aer Lingus if this sale goes ahead.
I heard Labour Party Members claim they were persuaded to support the sale on the basis that jobs would be secured for existing staff. SIPTU has said that the company has told Minister of State Deputy Gerald Nash that it will establish registered employment agreements that will ensure there will be no compulsory redundancies or outsourcing. SIPTU is right on insisting that this be achieved before the sale is signed off on, bearing in mind that we do not want it to go ahead.
Why was the guarantee for the Aer Lingus workers written into the articles of agreement? The new industrial relations legislation, which the Government has said will embody the protections that were contained in the registered employment agreements, has been published and will be before the House later today. As matters stand, however, it will not be in place prior to the sale. Therefore, all the workers have been promised is the threadbare letter.
In general, Labour Party support for the sale further underlines the shift that party has made. It is now fully on board with Fine Gael, and in accord with the position of Fianna Fáil when it was in power, in respect of the privatisation of State assets. It refuses to support calls from Sinn Féin and others to support constitutional protection against the privatisation of other key State assets, such as Irish Water. We saw that earlier. The Labour Party will argue that other privatisations that have been recommended, such as that of Coillte, were not proceeded with. However, they were agreed in principle. The only reason for not going ahead with the sale of Coillte was that the Government was not offered enough money. As the report of Coillte showed, the economics of such a sale made no sense. It makes no sense to sell off key assets for a fraction of what they are really worth considering the cost of building them up over many years - almost 80 years in the case of Aer Lingus. This logic applies as much to Aer Lingus as to Coillte or any other public company. It would be absolutely outrageous for the sale to happen.
For Fianna Fáil to accuse the Government of being unpatriotic for proposing to sell off the remaining State share in Aer Lingus is very ironic. Fianna Fáil is the same party that, in 2006, decided to make the biggest move towards privatisation. A total of 75% of the total company stock of shares was put up for sale. It is generally agreed that this was a disaster. Fianna Fáil's sale of 75% was an absolute firesale and it was outrageous that it happened in the middle of a boom. Events at Aer Lingus since 2006 have demonstrated this. Over recent days, we have heard a lot about the fact that the company, being small, cannot survive in the global market but I have heard some experts say in recent days that because of our strategic location in the north Atlantic, we are strategically positioned for Aer Lingus business to grow as it is. Aer Lingus had plans to go ahead with the expansion of its business. Its balance sheet over the past couple of years, particularly last year, shows that the company is highly profitable.
If I have a choice between flying with Ryanair and Aer Lingus, I prefer to fly with Aer Lingus. It sometimes costs a bit more but I am prepared to pay a bit extra because of loyalty. If the company were sold off, I would not have any loyalty to an international company. I am sure there are many people like me throughout the State. I prefer to fly with Aer Lingus when I can, not that I do a lot of flying. On the one or two occasions per year that I get out of the place, I go with Aer Lingus.
Fianna Fáil also planned the wholesale privatisation of other companies before it was defeated and lost power in 2011. When it was in power, it privatised the very successful company Irish Sugar. In 2006, it let go the last share in Greencore and facilitated the closure of the Irish sugar sector. This should not have happened. It was a prelude to a property deal. Hundreds of jobs were lost in Laois, Carlow and other counties. As a consequence, the workers, growers and contractors were left with a pittance in compensation at that stage. Of course, we discovered later that the EU rules showed that what occurred was not necessary. It was not necessary to close the sugar industry, despite the claim of the then Minister, Mary Coughlan, and other Fianna Fáil spokespersons. I remember attending meetings at which I learned that the bulk of the compensation paid out under Fianna Fáil went to Greencore, not the workers, contractors or growers in Laois, Carlow and the surrounding counties. There is absolute hypocrisy.
Today, Fine Gael and the Labour Party are in the driving seat. The Minister must ensure the deal does not go ahead. It is not worth the paper it is written on. The documents and letters that have been issued to the Minister are not worth the paper they are written on because they will simply not stand up to future scrutiny.
We cannot continue with the troika of Fianna Fáil, Fine Gael and the Labour Party that is in favour of privatisation. I am asking the Minister to hold off on this and refer the matter to the transport committee so it can tease out all the issues in full next week. To proceed with this deal after two short debates in this Chamber over the past couple days would be outrageous. It must stop. The Minister must refer the matter to the transport committee so all these issues can be teased out fully and he should press the pause button on this sale.
I am delighted to have an opportunity to speak on this important issue. Reference was made to the Labour eight. I am among the Fine Gael ten who have equal and genuine concerns about the future of Aer Lingus. In fact, we have aired these concerns and brought them to the attention of the Minister, as have my colleagues in the Labour Party. We were correct to do so. This is a major issue and concerns us all. It concerns the workforce in Aer Lingus and the future of the company. It concerns Irish aeronautics and the possibility of this country expanding as a major international aviation hub. That opportunity does arise but does not arise other than through this particular route, although it was much talked about in the past.
That was one of the measures I identified by way of parliamentary question as being desirable in the context of the disposal of the Government's share in Aer Lingus.
I am impressed by the genuine concerns expressed by Members in the House in the past 24 hours or so. They have a genuine reason for expressing these views and have the best interests of the company, the workforce and the country at heart. This applies to those affected in Cork, Shannon and Dublin airports. An important point to come out of the debate is that we will continue to have the shamrock flying internationally across the globe. That is positive. We have received a clear indication that extra jobs will be created. There are genuine concerns about the possibility of job losses, but we must take the agreements on their merits and at face value. It is not a good idea to enter into negotiations presuming the outcome will be negative. It is not a good idea to sign an agreement or have somebody else sign one and say we are signing it but we do not think the other party will stick to it. That is a recipe for disaster.
What really takes me to the fair is the tear-jerking concern expressed in the past two days by the quarter of the House that expresses genuine concern and sympathy for the Labour Party. It could not care less. There is only one thing those Members have in mind and that is how they can cause a crisis and drag it out over the next fortnight or three weeks and to disturb something in the woodwork. That is what they are hoping for. They have no concern for the country or the future of Aer Lingus, which is the most important aspect. It was particularly cynical of the Leader of the Opposition to chase after the genuinely held concerns of a member of the Labour Party to try to push him over the edge because that is what it was all about. There are genuine concerns in the minds of many here and they have every right to express them. The issue is serious because we do not have much to play with. We must remember that we have a 25% shareholding, the legacy of those sitting in on the Opposition benches, as Deputy Brian Stanley rightly pointed out. The criticism being levelled in this direction falls flat when one thinks of what happened in the case of Greencore. Not only was no attempt made to do anything about it, every attempt was made to facilitate the closure of the sugar industry to supposedly improve the lot of genuine sugar producers elsewhere in the world. That was proved to be a load of rubbish.
What really takes me to the fair is the degree to which the Members on the other side of the House divest themselves of all responsibility for selling 75% of the shareholding in Aer Lingus without anybody telling them that it was a good thing to do. They thought they had to get rid of it quickly because it might drop in value, which would have been terrible. It could have been politically embarrassing. That was the only reason it was done; there was no other reason. The people who took the decisions had no concern whatsoever for the workforce in Aer Lingus. The only time they expressed concern about them was at election time. That was the end of it.
The deal on the table is as good as what can be achieved. It offers great potential for the expansion of Aer Lingus and an increase in the workforce in the future and I expect it to deliver. This is the genuine concern expressed by those near the coal face.
I am concerned about the health of some Members who have spoken in the past 12 or 14 hours. I have seen many Pauline conversions in the House, but last night I saw a Member speak as if he was a recent convert to Marxism. In fact, Karl Marx himself would not have expressed greater concern about this proposal. To make matters worse, I am sure it was a genuine mid-life political crisis. It could not have been anything else because some of the Members concerned have been known hard-line right-wing promoters of a completely different ideology during my time in the House and for a considerably longer time. I am genuinely concerned about them as they are experiencing a crisis which I know has everything to do with politics and nothing to do with expressing a genuine concern for people. It has nothing to do either with the future of Aer Lingus, other than using it as a political football for the sake of opportunism.
There is a genuine possibility for the development of this country as an international aviation hub. It has huge prospects and there is all to play for. If it cannot be done, it will not be for the lack of effort. That commitment should be across the board and on all sides of the House. The nationalism and patriotism in which we take so much pride and we will see next year behove all of us to recognise that the national interest is at stake. I am sorry for the gang on the other side of the House, with their hand-wringing, knee-jerking, tear-jerking, tearing out of hair and beating of breasts. I can recommend to them a good practitioner who could deal with that problem because there is grave danger that they will begin to believe what they are saying themselves. What is most dangerous about political propaganda is when those who express it are so committed to it that they begin to believe it. It is when they begin to believe it that a serious problem emerges.
I can assure Members on the other side of the House that the agreement reached is the best that can be achieved. I compliment the Minister and the Minister for State at the Department of Jobs, Enterprise and Innovation, Deputy Gerald Nash, on their efforts in bringing the ship ashore. Flights will continue to land as a result of this agreement and the airlines involved will expand their facilities and services to incude far more regions than have been envisaged so far. We expect this to happen and have a right to expect it to happen as a result of the agreement. I congratulate the Minister and the Minister of State on sticking with it. We should remember that we were treated to a series of crises in the past two months about whether the Government would sell and Labour Party backbenchers would be able to stand for it. We know that Fine Gael always believes in selling everything. I could write the script. Members opposite should cease making telephone calls in the middle of night to those whom they think might be wobbling on this side of the House. We are not for wobbling.
We wish all those involved in the agreement every success and expect it to deliver. We are concerned about the sorrow expressed and the disappointment of Members on the opposite side of the House. We know that they are disappointed, but the agreement is a manifestation of a quote from George Bernard Shaw:
You see things; and you say "Why?" But I dream things that never were; and I say "Why not?
I cannot but agree with everything Deputy Bernard J. Durkan said. I cannot think of anyone who could put it better. When this debate was initiated, I did not know whether I should speak in it. After all, I come from County Donegal and people might wonder what the issue has to do with me. It has something to do with every Irish man and woman because Aer Lingus has been a part of what we are for many years and generations. We are very proud of its record and the standards it has achieved. When one comes home, it is great to pass through the terminal and see the shamrock and the signs of the national airline. It has set a standard in air travel that has been rarely been met. I, therefore, acknowledge what it has done for us.
I wish to acknowledge the excellent work that has been done by the Minister. He has been very patient and did not rush into this. He took his time and has secured an excellent deal.
We should not look a gift horse in the mouth. First, the price per share at €2.50 could not be bettered. The deal ticks all the boxes. It will maintain employment as well as creating an estimated 635 new jobs between now and 2020.