Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Joint Committee on Transport and Communications díospóireacht -
Thursday, 12 Feb 2015

Proposed Sale of Aer Lingus: (Resumed) IAG

The purpose of the meeting is to hear from IAG on its takeover bid for Aer Lingus in order to establish the likely repercussions of the potential sale of Aer Lingus to it. International Consolidated Airlines Group SA is a Spanish business corporation registered in Spain. I welcome from IAG Mr. Willie Walsh, chief executive, and Mr. Finbarr Griffin. Having heard from the unions and other groups on the takeover bid, we will now hear from Mr. Walsh on the possible positive impact of a takeover.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statement made to the committee will be published on its website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I call on Mr. Walsh to make his opening statement.

Mr. Willie Walsh

I thank the Chairman for extending the invitation to us to attend the meeting. The principal reason I am here is to give the joint committee an opportunity to ask me questions. I introduce Mr. Finbarr Griffin who is required to be with me under takeover panel rules. He is my chaperone, but I also acknowledge the fact that the takeover panel has extended some latitude to us to appear before the committee. I hope to be in a position to answer most, if not all, of the committee’s questions. There are some areas where I will be restricted in what I can say.

By way of introduction, I will say a little about International Airlines Group, IAG. It was created in 2011 as a result of the merger of British Airways and Iberia. It is one of the largest airline groups in the world. In terms of market capitalisation, it is the number one airline in Europe. Our market cap exceeds the combined market caps of Air France, KLM, Air Berlin, Aer Lingus, Lufthansa, SAS, Turkish Airlines and Finnair. If one adds their market caps together, they come to the same as ours. We are a significant player in the airline industry; we are approximately number four or five in the world.

Ours is a multinational, multi-brand airline group. Our goal is to facilitate consolidation where we can identify strong airlines with strong brands and allow them to operate under the umbrella structure of IAG, benefiting from the scale we can provide. While we have three principal airline brands, we actually have six airlines: two in the United Kingdom - British Airways and British Airways City Flyer; Iberia, Iberia Express, Vueling based in Spain and OpenSkies based in Paris. We also have a cargo business, one of the top ten in the world, with an annual turnover of approximately €1 billion. We serve 250 global destinations. We have a frequent flyer loyalty programme, which is the number one airline loyalty programme in Europe and one of the biggest in the world, with 6.3 million active customers. IAG airlines flew 77.3 million passengers in 2014, serving 250 destinations. We have over 460 aircraft and a turnover of approximately €20 billion.

We are interested in acquiring Aer Lingus because we believe it will fit very well with IAG. It has a very strong brand, particularly in Ireland; on the east coast of the United States of America where it punches way above its weight; and in the United Kingdom. We admire what the Aer Lingus management team has done in recent years, particularly in the restructuring of the airline and the exploitation of Dublin as an international hub serving transatlantic routes. Aer Lingus is an efficient airline operating in a competitive market. It is well run and we believe it represents a growth opportunity for IAG. We are interested in acquiring it because we believe we can facilitate, accelerate and expand its growth plans.

I am sure it has been noted before that I am a former employee of Aer Lingus, of which I am a deferred pensioner and shareholder, holding 10,616 shares. It is also known that I am Chairman of the National Treasury Management Agency, NTMA, and, as such, declared a material interest to the NTMA board. That has been disclosed. I have, however, no access to any information in the NTMA, any discussion or participation in any debate within the NTMA on Aer Lingus.

I recognise that there have been many questions and a great deal of concern expressed by members of the committee and others about our proposed acquisition of Aer Lingus. Our intentions are completely positive. We believe we can bring to Aer Lingus strength and support that it cannot have as a stand-alone airline. We believe we can facilitate the expansion of the network, benefiting Aer Lingus, the airports it serves in Ireland and the Irish economy. We are committed to maintaining the Aer Lingus brand and have given guarantees to do so. We are committed to maintaining the Aer Lingus head office in Dublin. We are committed to maintaining ownership of the Aer Lingus Heathrow Airport slots within Aer Lingus. We are prepared to give a cast iron, solid, legally binding guarantee to ensure the ownership of these slots rests with Aer Lingus and to extend to the Irish Government not just the ability to express, with the support of other shareholders, a block in terms of the disposal of these shares but also to strengthen that position and in a fully legally binding way. We have also given an assurance, a guarantee that we will continue to utilise the Aer Lingus slots to serve the Ireland-Heathrow market. That is a guarantee that does not apply today and it goes beyond what is in place today. We believe we are uniquely positioned to give these guarantees. I do not believe there is any other party that might be interested in acquiring Aer Lingus, if there are other parties, that would be prepared to give the guarantees we are prepared to give. We are prepared to give these guarantees in a way that will not be challenged. In other words, they will be legally binding. I have heard people say they are not worth the paper on which they are written. I can assure the committee that we have smart lawyers who have been able to identify a structure that will secure them in a legally binding way.

We believe Aer Lingus has good opportunities ahead and that we can support these opportunities. We want to bring it into IAG in the same way as our other airline brands, where it will have an independent brand that can be invested in and control over its own operations run by an Aer Lingus management team but fully participate in the advantages it will have in being part of a larger group. We believe this is an exciting opportunity for Aer Lingus. It represents excellent value for current Aer Lingus shareholders and all of the stakeholders involved in Aer Lingus.

I thank Mr. Walsh.

We have had a series of meetings in the lead-up to today's meeting. As Mr. Walsh has said, questions and concerns were raised at those meetings. We met representatives of various trades unions, IBEC, chambers of commerce, tourism interests, IDA Ireland, Enterprise Ireland and so forth. They raised questions relating to jobs, connectivity, the possible impact on the regional State airports at Shannon and Cork and on tourism, as well as the future of the Heathrow slots. I am setting the context for the questions from members which will come later. There was talk about the need for guarantees. Some groups saw some positive aspects to the proposed sale if guarantees could be given. While Mr. Walsh made reference to that in his presentation, to what degree can any guarantee be guaranteed?

Up until today there was an absence of information on the proposed bid which is why Mr. Walsh is very welcome. I hope he can answer the questions posed today. I have a number of questions myself and then I will hand over to committee members. My first question relates to Aer Lingus Regional, which is a subsidiary of Aer Lingus employing 400 people in Ireland. If this sale were to go ahead, what would be the impact on Aer Lingus Regional down the line? I ask Mr. Walsh to address the knock-on effects that this would have for regional airports in Ireland. We have talked about Dublin, Shannon and Cork, but what about the regional airports like Knock and others? I am from the west of Ireland and chaired a study group on the potential of the airport there. Aer Lingus flies 70,000 passengers into Knock Airport every year. The airport has 700,000 passengers at the moment but wants to grow that figure to 1.3 million. Would the IAG bid for Aer Lingus help or hinder that? Finally, I heard Mr. Walsh in a radio interview this morning saying that what some politicians have said in recent weeks could be potentially damaging for Aer Lingus and I ask him to expand on that point.

Mr. Willie Walsh

The first point to make is that Aer Lingus Regional is not a subsidiary of Aer Lingus but a franchise carrier operating on behalf of Aer Lingus. There is no Aer Lingus ownership in Aer Lingus Regional. My understanding is that it is owned by Stobart Air and operates under a ten-year franchise agreement that was signed in 2012. We believe that it is fundamental to the success of Aer Lingus and the airline's strategy to feed traffic into Ireland principally from the UK provincial airports. We also believe that the franchise arrangement should continue and we would be committed to maintaining that relationship, subject of course to the owners of Aer Lingus Regional-Stobart Air, being prepared to continue to do so.

It was suggested by some people who appeared before the committee that there is no evidence or history of such arrangements with IAG but that is not correct. Iberia, one of our companies, has a long-standing relationship with Air Nostrum in Spain, which operates on a similar basis. It is not owned by Iberia but operates as an Iberia franchise carrier. That arrangement has been in place since 1997. British Airways has a franchise operator in South Africa called Comair. British Airways is a small shareholder in that business and has had a long-standing relationship with it and anybody who has visited South Africa may have seen a lot of BA branded aircraft there. That is a franchise operation. British Airways also has a long-standing franchise relationship with Sun Air in Scandinavia. We have a history of operating with franchise operators and our understanding of the Aer Lingus-Stobart Air relationship is that it is a positive one for both parties. Therefore, we believe that the franchise arrangement should continue.

On the question of Knock Airport, Aer Lingus operates a service from Knock to Gatwick Airport and our understanding is that it is a profitable operation. We think that through the relationship with British Airways at Gatwick we can enhance that service. British Airways has a network to Europe from Gatwick Airport that is actually more extensive than our network from Heathrow. We serve more European destinations from Gatwick than from Heathrow and believe there is an opportunity to feed traffic to and from that Aer Lingus service. Therefore, we believe that our bid, if successful, would enhance the value of that.

My remarks on damaging Aer Lingus related to some comments that were made about what the Irish Government can do to influence decision-making in Aer Lingus, which would have come as a surprise to investors in the debt and capital markets. It was clear to people external to Aer Lingus that the Irish Government is a 25% shareholder and can have board representation but other than its ability to block a sale, with the assistance of other shareholders holding a minimum of 5%, it cannot exercise any other influence over the active management, development and strategic direction of Aer Lingus. Statements were made that suggested that the Government could and would interfere. I do not believe the statements necessarily meant that but the interpretation relayed to me by some people was that such suggestions were not helpful.

Thank you, Mr. Walsh. We will have party spokespeople first, who will be given three minutes to ask questions. We will get a response to those questions and then they will be given one minute to respond. We will call all committee members first and then Deputies and Senators who are not committee members. To get the maximum benefit from this meeting, I ask members to confine themselves to asking questions rather than making speeches. I will be as fair as I can and try to give everyone an opportunity to speak. That said, I want to use the time we have wisely.

I welcome Mr. Walsh and Mr. Griffin. It has been a while since Mr. Walsh was here with us and clearly his career has gained altitude since then and we wish him well with that. The concerns that I and others have expressed in recent weeks have been in response to industry sources, that is, people who are responsible for employing large numbers of people in Dublin, the mid-west and in the Cork region who are supported through foreign investment and who see connectivity and access to Heathrow - which provides access to a global network of cities - as being vitally important for retaining jobs. We also heard from representatives of the tourism sector and concerns were also expressed to us by Aer Lingus staff who are concerned about their employment prospects.

Mr. Walsh spoke about the positive aspects of this deal for Aer Lingus. What is in the deal for IAG? What are that company's expansion plans at Dublin, Cork and Shannon? Is IAG committed to retaining the British Airways and Aer Lingus slots at Heathrow which are currently providing access to Dublin? Is IAG further committed to retaining the slot access from Shannon and Cork? Mr. Walsh said in his presentation that the issue is Ireland's slots into Heathrow, rather than slots designated to the three airports. I ask him to clarify that point.

Mr. Walsh also spoke on the "Today with Seán O'Rourke" radio programme this morning about some job losses and I ask him to quantify those and clarify where they might occur. On the same programme, he also spoke about giving cast-iron guarantees and I assume that was in response to the Taoiseach's remarks approximately two weeks ago where he said that the Government would need cast-iron guarantees around connectivity and other issues. Mr. Walsh went further today when he said that not alone would they be cast-iron, but they would be set in concrete as well. That is critical for all of us; it is certainly critical for me. However, when Mr. Walsh says that he has smart lawyers preparing this, that concerns me greatly. These are IAG lawyers and I would much prefer to hear the Minister for Transport, Tourism and Sport, Deputy Donohoe or the Taoiseach saying that they have smart lawyers who could stand over the kinds of guarantees and assurances that would need to be put in place. Mr. Walsh does not give me any sense of security because it is his lawyers who are providing the information. I would welcome any further information from Mr. Walsh which would help us to understand more definitively and clearly how those guarantees might be put in place and how they might be litigated at a later stage in the event that IAG changes ownership. Qatar Airways, for example, currently owns 10% of IAG but what happens if it decides to take over the entire company?

Mr. Walsh also said this morning that there would be changes to the articles of association or the memorandum of understanding of the company.

If they can be changed in this instance, I assumed they could be changed at a later stage by chairmanship. Finally, could Mr. Walsh talk to us a little about how he could achieve all he wants to without owning the State's 25% shareholding? Could a strategic alliance be developed that would allow IAG to share the potential benefits Mr. Walsh sees in acquiring a stake in Aer Lingus and that would allow Aer Lingus to benefit from its association with IAG without a share transfer from the State? Is there an arrangement that would give the State continued representation on the board, thereby retaining some level of control in respect of the operation of the company?

Mr. Willie Walsh

First, let me address the concern expressed on Qatar Airways. The airline has taken a 10% stake in IAG. As with many companies in the airline industry, there is a limitation on the allowable amount of non-EU ownership. Qatar Airways holds 10% but we currently have non-EU ownership extending to approximately 36% of our stock. Under our articles, the board has the ability to limit the amount of non-EU ownership so long as that limit is not less than 40%. Therefore, there is no prospect whatsoever of Qatar Airways being able to gain control of IAG. It is not legally possible.

The Deputy asked many questions and I will try to recall them all. With regard to Shannon and Cork airports, the Deputy and I have exchanged views on the former. The last time I was here was October 2004, more than ten years ago. Some of the issues we are debating today were debated then. I believe the Deputy is the only current committee member who was a member then. On Shannon and Cork, I can understand the concern that has been expressed, particularly the concern expressed in Shannon because of what happened with the Shannon–Heathrow service in 2007. It might be helpful for members to understand what was behind the Aer Lingus decision back then. A couple of points arise in this regard. I have some information on Aer Lingus that has been provided to us under non-disclosure arrangements. I have not been directly involved in the due diligence process but my team has been. Separate to that, let me talk about what I have said publicly about Shannon and Cork historically. I would genuinely be very shocked if I discovered the operation of the Shannon–Heathrow and Cork–Heathrow services was not profitable for Aer Lingus. I know Dublin is profitable because we operate on the route. I know from my history with Aer Lingus what the situation was in the airline, but that was a long time ago and many things have changed in the interim. The services are profitable on a stand-alone basis.

One of the advantages of the current relationship Aer Lingus has with British Airways — it has other relationships — is that we feed traffic to one another on the services. We feed traffic from Heathrow on to Aer Lingus flying to both Cork and Shannon, and Aer Lingus feeds traffic from Shannon and Cork on to British Airways services, principally long-haul services. We are the number one partner that Aer Lingus has in respect of its transfer traffic. Not only are those routes profitable in isolation, but the value of the transfer traffic we provide to one another is extremely valuable also. Therefore, the commercial reality is that there is no reason for anybody to be concerned about the operation of the routes because they are profitable in isolation and have significant additional value because of transfer traffic.

In 2007, Aer Lingus terminated the Shannon–Heathrow service. I watched that with great interest because the principal reason for it was that Shannon Airport made a deal with a competitor of Aer Lingus to facilitate its entry into the Shannon–London market. The competitor was receiving free services or low charges in Shannon and Aer Lingus was paying the rack rate for services. Aer Lingus was being significantly disadvantaged as a result of a competitor being given much cheaper access to Shannon. Commercially, it is madness. I cannot understand why Shannon Airport did what it did at the time. I expressed that view to the people running Shannon Airport when it happened. I was pleased to see the issue was resolved and that Aer Lingus subsequently went back into Shannon.

When I look at the traffic flows between Cork and Heathrow, and Shannon and Heathrow, I note the flows from both Cork and Shannon airports are what I have described as very good. This is especially the case with Cork, where the volume of traffic has remained steady. It has actually grown in recent years but, significantly, remained steady through the recession. This was unique given what happened everywhere else during that period. The traffic out of Shannon to Heathrow has declined in recent years. I am not clear whether there is something in the scheduling behind it. It is a matter we can certainly examine in much closer detail. The routes are sustainable in isolation and I assume they continue to be very profitable for Aer Lingus. We would want to retain them but also we would want to examine opportunities to feed additional traffic on to them, thereby continuing to enhance not only the profitability and viability but also the attractiveness of the destinations.

It has been stated by people who have appeared before the committee that the only reason British Airways is flying between London and Dublin is because some unknown UK regulator — I do not know who it is — has forced it to do so. That is complete nonsense. There is absolutely no requirement from any regulator for British Airways to serve the Heathrow–Dublin route. British Airways serves the Heathrow–Dublin route because it wants to. Not only has British Airways continued to serve Dublin by building on the service that BMI used to provide, we have actually started additional services into Dublin with a service from London City Airport. We are one of the biggest operators. Obviously, there are two very big operators in the form of Aer Lingus and Ryanair at Dublin. Number three is Aer Lingus Regional, and we are number four in terms of the number of services we provide to Dublin. We provide the services because we want to. There is absolutely no obligation and no regulator requires it. Whoever suggested there is such a requirement is talking complete nonsense and does not understand the rules.

We would continue to serve the market in question because we want to. Ireland is an attractive market for us. It is particularly attractive because we believe it represents growth opportunities. The development of the transatlantic services, principally over the Dublin hub, represents a real growth opportunity. We can support that better than anybody else because we can bring the strength of IAG, at one end of the route, and the strength of our joint business partner, American Airlines, at the other. Instead of having Aer Lingus operate with a small sales team in the United States, we would harness the full strength of the British Airways and American teams selling that service in the US and of the IAG sales team selling it in Europe. That is something Aer Lingus cannot access in isolation. As a stand-alone airline, regardless of the number of partnerships it seeks to develop, it cannot get that amount of support. We are the only people who can provide it. We want to provide it to Aer Lingus because we see this as a fantastic opportunity to grow the traffic out of Ireland on the transatlantic routes, which would have direct benefits in terms of jobs in Ireland and significant indirect benefits through tourism and indirect job creation in the Irish market.

I said we have smart lawyers working on this. I am sure the Taoiseach and the Department of Transport, Tourism and Sport will have smart lawyers working with our smart lawyers. We believe there is a legal framework in existence that can provide the Government with a guarantee. It is not a case of my giving the committee some nice words about a guarantee over Heathrow slots but of my telling the committee we have tested this. We are very confident a structure can be put in place to give a cast-iron, wrapped in concrete guarantee that the control of those Heathrow slots will remain with Aer Lingus management in Dublin and that the Government can intervene. Without explicit support, Aer Lingus would not be able to sell any of the slots.

The issue of jobs has been mentioned. I fully understand the concern over jobs. I have heard people saying 1,200 jobs would be lost. That is utter nonsense. The example that was given to support the statement was what happened with Iberia. One must realise that where Iberia was during the period of reconstruction and where Aer Lingus is are two completely different places. Aer Lingus has gone through the restructuring. Aer Lingus is an efficient airline and could be more efficient but Iberia was an inefficient airline that got trapped in a really deep recession that hit Spain in the way it hit many countries, including Ireland.

Iberia required serious and immediate restructuring. Aer Lingus is not in that position. Will there be rationalisation as a result of Aer Lingus being part of IAG? Yes, there will be because we have centralised certain activities with procurement probably being the best example. We do procurement for everybody in the group through a central source. That generates huge value. We can negotiate with every supplier in a way that is much stronger than any airline can do individually. Aer Lingus can tap into the value of that, which is immense. I am not talking about millions. I am talking about tens of millions and potentially significantly more than that.

The real story behind what we want to do is growth. It is all about growth. It is about growing the Aer Lingus network and with that growth comes growth in jobs, which are quality jobs that would be based in Ireland. The rule of thumb is that the addition of long-haul aircraft would typically mean an additional 100 direct employees - plus or minus ten. Every long-haul aircraft that gets added will add jobs. Every long-haul aircraft that gets added at a hub requires short-haul aircraft to feed traffic into that hub for it to be efficient. The committee can see that with the direct addition of long-haul aircraft, we will get the indirect benefit of a growing short-haul network feeding more traffic which is the ambition of the Irish Government under its draft aviation policy, the DAA under its stated policy and Aer Lingus. We can support that in a way nobody else can.

Could Mr. Walsh come back to me on the expansion plans at Dublin, Cork and Shannon? He has still not really told me what is in it for IAG. Aer Lingus has been performing very well in the north of England hubbing transatlantic passengers through Dublin. Has that been a concern to British Airways? Has Aer Lingus been raiding the north of England at the expense of British Airways and is IAG's response to go and take it over? Mr. Walsh has not said whether a strategic alliance with the State retaining its 25% interest might be a better way of getting around the legal complexity. This would offer ownership and board representation and would retain a level of control notwithstanding company law and the articles of association.

Mr. Willie Walsh

Aer Lingus is not taking traffic away from IAG in the north of England because it is principally serving airports that IAG does not serve. We see this as complementing the IAG model and that is what is in it for us. We see Aer Lingus as a growth model and being able to grow faster and in a more extensive fashion simply because it would have the support of IAG, particularly on the transatlantic routes. It is not taking business away from us. Some people might have the opportunity to fly from Scotland over Heathrow to North America or from Scotland to North America via Dublin but if one looks at the performance of our transatlantic routes, one can see that our seat factors exceed those of Aer Lingus. It is well known to be a very successful part of the IAG network, particularly so given that we have a joint business.

Our approach is subject to an irrevocable undertaking from the Irish Government and Ryanair to major shareholders to sell their shares. That is what we are seeking. The commitments we give are based on IAG acquiring ownership of Aer Lingus. We are not prepared to give those commitments in the absence of that.

In respect of our growth plans, we have had access to the Aer Lingus business plan. We think it is credible. It has an element of risk. We think that this stated Aer Lingus growth plan, which would involve the addition of four long-haul aircraft between now and 2019, can be better achieved through the support IAG can provide. We believe there is an opportunity to enhance and accelerate that growth plan. Anything that grows long-haul aircraft will have an immediate positive effect on direct jobs and the amount of traffic feeding into that.

I love Cork. It should be remembered that by the time I left Cork, we had started more direct services from Cork to continental Europe than Aer Lingus had operated from Dublin in 2001 when I took over at Aer Lingus. I know the opportunity that exists there. I have been surprised to see a decline in traffic at Cork Airport and I strongly believe that this can be reversed.

Shannon is perfectly located for growth on the transatlantic routes. It has the advantage of customs and border pre-clearance, which is also enjoyed by Dublin. It is a particularly attractive market from the US into the west of Ireland. We see that as a growth opportunity. There is the potential to feed traffic into Shannon to connect on to those transatlantic services as well.

Are there guarantees regarding Shannon and Cork?

Mr. Willie Walsh

The guarantees we have given are around the ownership of the slots. We have been very clear that the operation of those slots would remain in Ireland.

Mr. Willie Walsh

Yes.

But not connected to the three airports.

Mr. Willie Walsh

I have given the Deputy my view.

Mr. Walsh has given me his aspirational view. I will take it as "No".

I am moving on to Deputy Seán Kenny. I would ask members not to ask questions that have already been asked so that we can get new information.

I will not repeat the questions asked by the Chairman and Deputy Dooley except to reiterate the importance of the Heathrow slots and the importance of connectivity to tourism and industry. I represent the constituency of Dublin North East, where many Aer Lingus employees and retirees and their families live. Many of them have expressed concern to me about their future in the context of a bid by IAG to take over Aer Lingus. I have a number of questions arising from that.

Do Mr. Walsh and IAG accept that Aer Lingus staff have made many concessions and efficiencies that vindicate the use of direct labour at Aer Lingus in the past number of years and will they commit not to outsource further the functions there? Would Mr. Walsh and IAG be prepared to enter into a legally binding collective agreement which would support the current flexible nature of existing agreements for staff at Aer Lingus which would give Aer Lingus workers certainty over their future? Are Mr. Walsh and IAG aware of the residual discontent among former Aer Lingus employees who are now classed as deferred members of the IASS scheme? I think Mr. Walsh said he is a deferred pensioner himself so he is probably in that category. They have concerns following pension arrangements passed by the EGM of Aer Lingus before Christmas. Would IAG have strategies for addressing those concerns?

When Mr. Walsh was CEO of Aer Lingus between 2001 and 2004, he discontinued all cargo services except those services to Frankfurt and the US. I am informed that those cargo services were not unprofitable at the time. These services were put back and built up again by Mr. Walsh's successors. Would Mr. Walsh do the same again?

Mr. Willie Walsh

I have heard the statements by representatives of the employees in Aer Lingus about the efficiencies they have generated. My view has always been very clear. If what they say is true, there is no reason to be concerned. I recognise that changes have taken place in Aer Lingus and am fully aware of some, but not all, of those. We do not look to outsource business as a strategy. We only look to outsource business as a solution when no other solution exists. My preferred solution has always been to operate as many of the services as we can within the business because that is the area where one can exercise most control. If it can be done internally, that has always been my preferred choice.

If people look back at my time in Aer Lingus, they will see that while outsourcing was often talked about, it was never done. We did not engage in outsourcing. We restructured the business to make it more efficient and secure the jobs directly within Aer Lingus. I understand that this has continued to happen. I listened to Owen Reidy from SIPTU. No disrespect to the other people but I thought he was probably the most sensible of the people who appeared before the committee. He made very clear what had happened to make Aer Lingus more efficient. That is what I am about - the efficient operation of a business. If it can be done internally, I am all for that.

In respect of legally binding collective agreements, I spent a long time working in industrial relations in Aer Lingus and am very familiar with collective agreements.

I am very familiar with the fact that they are not structured as legally binding documents and, as I see it, they would have to be completely rewritten and restructured in order that they could be understood legally. They were never drawn up with legal enforcement in mind. It was a free collective bargaining process whereby these agreements were open to negotiation, interpretation and resolution between the parties. I am not clear on the dispute resolution procedures that have been put in place in Aer Lingus. I understand there was a move to put such procedures in place in an effort to resolve any difference. I am in favour of systems under which any dispute around interpretation can be resolved amicably within the business. Where this cannot be done directly, it should be done through mediation or arbitration. That system has generally worked well for Aer Lingus.

In the context of the pensions issue, I am a deferred pensioner. My pension has been reduced by 20% in line with those of many others in Aer Lingus. IAG would honour the agreement in respect of the IASS reached by Aer Lingus with its shareholders at the EGM in December, but we would not be doing anything other than this.

The Deputy is correct. During my period with Aer Lingus we stopped providing cargo services on short-haul flights. The principal reason for this was that we were pushing to improve aircraft utilisation and accelerate the turnaround of aircraft in order to make better use of them. It was deemed that the contribution cargo made on short-haul flights was insignificant relative to the benefit that could be achieved in being able to rotate aircraft more rapidly. I am pleased that this policy has been reintroduced because Aer Lingus has not lost any efficiency as a result of it. We are one of the biggest cargo operators in the world and we can bring a great deal of value to Aer Lingus and the Irish economy in terms of cargo services. Both Enterprise Ireland and IDA Ireland have highlighted cargo services as a critical issue. We are leaders in cargo transport and also global specialists in carrying high value cargo, particularly pharmaceuticals. We believe we can assist Aer Lingus in developing its business in this area, especially in the light of the importance of the pharmaceutical industry to Ireland.

On the issue of binding collective agreements, the Government is preparing legislation on registered employment agreements. That legislation is expected to be passed before the summer recess. Would Mr. Walsh be open to converting existing agreements at Aer Lingus into registered employment agreements, thereby guaranteeing the futures of the company's employees?

Mr. Willie Walsh

I must be completely honest and state I am not familiar with the proposed legislation. However, we will respect the terms and conditions of the employees in Aer Lingus. Management of industrial relations issues would rest with the management team at Aer Lingus. We do not have a group human resources, HR, function at IAG. All HR-industrial relations issues are, therefore, managed within the operating companies. We do not participate in that regard and that would continue to be the practice with Aer Lingus. If the company were part of IAG, responsibility for managing the relationship with the trade unions and the workforce would continue to rest with the Aer Lingus management team and would not be moved to IAG. That is the structure we have in place and we believe it is the most efficient model. It also respects the cultures, histories and legacies of the individual companies in the context of how they operate. We would use the same model in the context of Aer Lingus and it would be for the company's management team to continue to conduct industrial relations.

I thank Mr. Walsh and Mr. Griffin for attending. The committee invited the various stakeholders to come before it and members heard all of their views. We were aware that the Government's shareholding of 25.1% in Aer Lingus was not going to be a game changer and that support was going to be required from elsewhere. I do not believe the committee created an impression in that regard and I certainly did not get that impression.

A number of major issues arise in respect of this matter, of which connectivity is the first, particularly in the context of Dublin, Cork and Shannon airports. This matter was touched on in the context of the guarantees IAG was prepared to give in respect of Cork and Shannon airports. Mr. Walsh has indicated that IAG is prepared to provide a five-year guarantee regarding the 23 slots at Heathrow Airport. In May 2014 he gave an interview to The Independent in which he complained about not having enough slots to service the developing Far East, African and South American markets and also the transatlantic market.

Mr. Willie Walsh

No, I did not say that.

Mr. Walsh is quoted as saying so in the interview to which I refer. He was also reported by RTE as arguing that "it would be crazy to extend a guarantee that Aer Lingus's Heathrow rights would only be used to service Irish routes beyond the proposed five years, as this would affect its bargaining power with suppliers and airports." In other words, IAG would guarantee the slots for five years, but the impression is not given that he could guarantee them beyond this. I do not know how the lawyers will tidy up that matter.

Mr. Walsh has stated he is a shareholder in Aer Lingus. I do not know whether he would benefit if the company were to be sold off or whether his shares would be transferred to IAG and combined with any interest he may have in the group. Does he have shares in IAG? If he does have shares and if they were combined with his shares in Aer Lingus, I do not know what overall influence he would then be able to exercise. I do not know what his position is, but I would like to obtain an indication of it.

Mr. Walsh has also indicated that he is a deferred pensioner. This is an extremely contentious issue. We are all aware of what has happened at Aer Lingus, but will Mr. Walsh indicate whether he has plans to address this issue even further? I understand issues relating to pensions also arose in respect of IAG when the merger took place in 2011. When Iberia and British Airways came together, there were plans to reduce the workforce by over 2,500 and the fleet. On the one hand, Mr. Walsh is stating the group is going to expand if it takes over Aer Lingus but, on the other, it is clear that there will be job losses in a number of areas. It is also possible that the size of the fleet will be reduced.

Mr. Willie Walsh

The interviews I do in the United Kingdom do not specifically relate to IAG. They have principally been on the expansion of capacity at the airports in the south east of England. In the past, I supported the development of a new runway at Heathrow Airport. I do not support this or argue against it anymore because a decision on the matter was made by the Conservative-Liberal Democrat coalition Government when it came to power. I do not get involved other than to say the decision of the British Government to stop the development of the third runway in 2010 was wrong.

To place the matter in context, I will speak about British Airways. A perception seems to have been created that this is all about taking the 23 slots owned by Aer Lingus, transferring them to British Airways and then using them to expand its network. Slots vary from the summer season to the winter season. I carried out an analysis of British Airways's operations at Heathrow Airport yesterday. The company operated 314 flights - 314 slots - of which 49 were domestic and 180 were to European destinations. This means that 229 of our slots were devoted to short-haul activities. That is ten times the number of slots we are talking about in the context of Aer Lingus. Anybody who believes we need Aer Lingus's slots to expand our network need only consider the fact that we have 229 such slots being operated for short-haul services. Many of these slots could be converted to provide long-haul services. When we acquired BMI, we gave a commitment that 14 of the slots we took over would be used for long-haul service expansion and that the remainder would continue to be used to support our short-haul network. The reason for this is that in order to operate a long-haul network with transfer traffic, it is necessary to have a short-haul network to feed it.

We have more than enough slots to expand British Airways's long-haul operations.

Our competitors cannot do that. In terms of the UK plc, it is a restriction on the development of the British economy; it is not any restriction on BA. We have loads of slots. We can expand our long-haul network for the foreseeable future without any issue from the slot pool we have. A total of 27% of our slots are used for long haul and 73% for short haul. We have tonnes of them. We have the slots available within BA to expand our long-haul network as and when we want. What facilitates the expansion of the long-haul network is efficient new long-haul aircraft. We have quite a number of those on order but we have plenty of slots for all the expansion plans we have. None of the slots Aer Lingus operates is being looked at in any way for the expansion of the BA network and that is why the ownership of the slots will rest in Aer Lingus. The company will continue to own those slots and will determine how it uses them.

Deputy Dooley said he would take it as a "No" but I did not say "No". I said I had addressed the issues and I did not say "No". Other committee members-----

But Mr. Walsh did not say "Yes".

Mr. Willie Walsh

I did not say "No".

I am taking that as a "No" in the absence of a "Yes".

Mr. Willie Walsh

I thank the Deputy.

Mr. Walsh is welcome.

Mr. Willie Walsh

Deputy Ellis is right that I said that we would be crazy to give an unlimited guarantee about the operation of slots because it would restrict our ability to negotiate with suppliers, including the airport. Nobody operating in a commercial would say, "I guarantee to give you all of my work regardless of the quality of service you give me and regardless of the cost of the access you provide me with". That would be mad and anybody in business would say that giving all one's bargaining power over to a supplier would be a crazy thing to do. Naturally, we want to have the ability to be in a position to ensure the people who provide us with services provide quality services in a cost efficient way. That is perfectly sensible. It is what everybody would want because nobody wants to believe that there is a locked-in service and the quality of that service can be completely unacceptable simply because we have given a commitment.

With regard to pensions, I have been very clear. It would be unfair for me to suggest otherwise. We will not do anything other than what has been done. We will support and honour the commitment that was given by Aer Lingus and its shareholders at the EGM in December but we will not do anything in addition to that.

I hold 10,616 shares in Aer Lingus. If this deal goes ahead, I will sell my shares. They cannot be transferred. It is not a material figure for me, though it is a material figure. I hold approximately 730,000 shares in IAG out of just over 2 billion shares. Clearly, I am the CEO of the group and that has, I hope, significant influence on how the company is run.

Mr. Walsh said AIG would retain the Aer Lingus brand. That would be important because it is an iconic brand through which the country is recognised throughout the world. However, I still worry about engaging with the unions. There has been mention of approximately 1,200 job losses. I do not know how accurate that is but that is one of the figures that has been given to us. The airline is profitable and is modern by standards with the fleet being reasonably up to date. The State has only 25.1% of the shares and I do not see why the Government should sell this off. If there is opposition from the State and that 25.1% is not on IAG's side, will that stop the company from proceeding?

Mr. Willie Walsh

I agree with the Deputy that the brand is incredibly strong. That is why we are attracted to it. We are unique in the industry in that we enable brands to continue to operate side by side unlike other airline groups where there is a dominant airline. The Lufthansa group is dominated and owned by Lufthansa while Air France KLM is owned by Air France. IAG is controlled by IAG; it is not controlled by BA, Iberia or Vueling. The influence, therefore, rests with the individual operating company. Aer Lingus fits perfectly into that structure because it is a strong brand, which we believe can be developed, particularly in the context of transatlantic. It is a profitable company that has gone through restructuring but it can be more efficient. It is not covering its cost of capital and it faces significant expense in respect of the fleet plans it has. It is a good company and its profitability and margins are improving. We will respect the work that has been done. Our proposal is based on receiving an irrevocable commitment from both the Government and Ryanair to sell their shares to IAG for this to proceed.

I thank Mr. Walsh and Mr. Griffin for appearing before the committee. I refer back to the cast iron embedded in concrete guarantee because there is still an unanswered question. The committee's narrative will be that Shannon and Cork airports continue to face a question mark over connectivity. For the benefit of trying to push this forward, could Mr. Walsh give a commitment that this connectivity will continue? I am from the Shannon region in the mid-west. Is he open to considering an extension of the timeframe for the slots? Five years is the offer on the table. Would he be open to considering an extension to, for instance, ten or 15 years in that offer? If one looks at this from our point of view and from the shareholders' point of view, a leap of faith is being sought in respect of the State's stake and there is uncertainty. From a policy point of view in the context of delivery into the regions, there is a temptation in the media narrative, especially on the part of the national broadcaster, to focus on Dublin Airport and that was the main thrust of what I heard this morning. From the rest of the country's point of view and from the Government's point of view, Mr. Walsh would do himself a great deal of service if certainty could be provided regarding Cork and Shannon airports and if consideration could be given to a longer timeframe than what is proposed because it is a considerable leap.

How is Ryanair responding to IAG's offer? Is the company amenable to the proposal?

Reference was made by one of the participants at the stakeholders' meetings to the impact BA had in Scotland. I will paraphrase what was said but in his role as CEO, Mr. Walsh may be able to enlighten the committee. The suggestion was made at a previous committee meeting that Scotland has been forgotten about, it is an outlier and it gets bog standard service. The concern was expressed to the committee that Aer Lingus would become an outlier of BA with a bog standard service.

Mr. Walsh mentioned one of the contributors at the last meeting. Another contributor referenced Dublin Airport's capacity to deal with what IAG envisages, which would be good for the country in the context of a transatlantic hub, but he called the airport a shopping centre on a runway because of the difficulties associated with taxiing, the apron and so on. How will that be resolved?

Mr. Willie Walsh

I will start with the final question first. I have been impressed by Dublin Airport. The management at daa is way superior to anything I experienced during my time at Aer Lingus. They recognise the value of a hub operation and are facilitating the development of a hub in a way that Aer Rianta did not. When Aer Rianta restructured the terminal buildings, it stopped people from being able to transfer air side and anybody who wanted to transfer from one flight to another had to come land side and then go back through security. The current management recognises that there is a huge opportunity for Dublin Airport to develop as a respected and credible transatlantic hub and I admire them for that.

I believe we can work with the management team at daa. Dublin Airport is not a perfect airport, I do not know one that is. There are always opportunities to improve the efficiency but I would not be critical of Dublin Airport. We operate to over 250 airports globally and Dublin Airport is one of the better airports. I see that as a positive.

As to other shareholders, we have not had any engagement with Ryanair. All I can tell the committee is what has already been said publicly and previously. There have been some statements from Ryanair where it said it hoped the Irish Government would be pragmatic about this issue. I think Ryanair previously said it would not sell if the Irish Government was not selling and the Government said it it would not sell if Ryanair was not selling, so there is a bit of a stand-off. I do not know what Ryanair's position is but I expect the board of Ryanair would, at the appropriate time, give very careful consideration to what we propose.

Reference was made to Shannon and Cork. I can appreciate there is some concern being expressed but I think it is misplaced. I am a business person. I believe the fundamental benefit one gets is from operating those in a profitable way. I believe they are profitable today and will continue to be profitable and continue to provide valuable feed. The Deputy asked if I would give a guarantee specific to Shannon and Cork rather than just the general commitment we have given in relation to Ireland. My advisor might not allow me to say this but that is something that I would be prepared to do. I see no reason why we would not operate services from Shannon and Cork to Heathrow, maintaining the four daily services from Cork and the three daily services from Shannon. I have not heard anyone express concern about Dublin. Dublin-London is the busiest international route in the world so of course we are going to be there. I can understand the concern but I genuinely think the concern is misplaced.

The concern comes from the last time, when 74% was sold and Aer Lingus hightailed it out of Shannon and went to Belfast. I know the reasons but that is the concern.

Mr. Willie Walsh

Let us be clear. There is nothing the Irish Government can do today to stop that happening. Zero, absolutely nothing, other than all of the committee here to jump up and down and criticise the management team at Aer Lingus. There is nothing can be done. We are offering a guarantee that does not exist and which nobody else who might be interested would be prepared to give or capable of giving - and I have not seen anyone else interested in Aer Lingus other than Ryanair. We are the only airline which gets the benefit of feed from those destinations into London Heathrow, nobody else would get that. That is why all the concern about Cork and Shannon is completely misplaced. If people believe it would be better for me to say "Yes, we will continue for a period to operate Shannon-Heathrow and Cork-Heathrow with the three from Shannon and the four from Cork," yes, I would be prepared to do that. I would not be prepared to go beyond the five years for the reasons I have given.

For what length of time?

Both of you have used your extra minute so I will go to Deputy Fitzmaurice.

I thank Mr. Walsh for his presentation. When he talks about Cork and Shannon, I would like to throw Knock into the mix, where there could be benefits of extra numbers. If IAG took over Aer Lingus, can Mr. Walsh give us a business picture of where he intends to bring those other airports in Ireland? From what I have gathered from Mr. Walsh, Aer Lingus regional has a seven-year contract left. IAG has a regional service itself, am I correct?

Mr. Willie Walsh

We have a regional franchise in Iberia called Air Nostrum.

Where does he see this going in six or seven years? Will IAG take that over?

That has been answered already.

Mr. Willie Walsh

No, we would not be taking it over. We believe the operation of that franchise is very sensible and supports the Aer Lingus ambition, which is also the IAG ambition, to continue to develop the long haul network.

Has IAG spoken to anyone such as Stobart Air?

Mr. Willie Walsh

No, because that contract exists between Aer Lingus and Stobart. That contract is in place. It is a ten-year contract and would be honoured by us. At the appropriate time we would engage with the supplier to see if it had an interest in continuing. I cannot see any scenario where it would not be continued because it provides valuable feed principally into Dublin to support transatlantic. That is how a hub operates.

Mr. Walsh said IAG is No. 4, Aer Lingus Regional is No. 3 and Aer Lingus is No. 2.

Mr. Willie Walsh

Aer Lingus is No. 1.

Is he looking at Ryanair and then Nos. 2, 3 and 4 gone? Is a monopoly starting?

Mr. Willie Walsh

I have said this publicly. The idea that anybody would operate a monopoly while Michael O'Leary and Ryanair are on one's doorstep is nonsense. One will never see that situation. Dublin Airport is a highly contested and competed airport, as are all the airports we operate into. I cannot envisage that changing. Competition will continue to be strong.

Reference was made to Knock. I said I think the Knock-Gatwick service can benefit from potential feed into the British Airways short haul network at Gatwick in particular. That does not exist today. We do work with Aer Lingus on the Heathrow service but I see no reason why we would not also work with Aer Lingus on the Knock-Gatwick service.

I thank Mr. Walsh and Mr. Griffin for appearing before the committee. As he has said, the IAG brand is very strong but he also recognised the Aer Lingus brand is extremely strong and recognised worldwide. We are delighted to hear that if there was a successful bid IAG would maintain the Aer Lingus brand. Two main issues remain, namely, jobs and connectivity. Mr. Walsh has spoken about job losses and job creation but the extra aircraft and jobs created appear focused on Dublin. While we are in recovery mode, the recovery generally begins in the capital city but other regions need to feel it too. Mr. Walsh feels the Cork and Shannon routes are viable and operating at a profit, would he see plans to expand at Cork and Shannon? He mentioned Gatwick, can he expand a little on that? Does he mean specifically for Dublin or could this be brought also to Cork and Shannon? Aer Lingus has 11 flights from Dublin to Heathrow and BA has eight. Can he see these 19 flights maintained daily? He has said he does not need to get rid of short haul flights in order to expand so would he maintain the 19 flights there? Would this increase prices for consumers?

Mr. Willie Walsh

We would look at opportunities to grow at Cork and Shannon. I am in the business of growth. People want to focus on restructured businesses. If we look at Vueling, an airline that joined IAG, it has grown at a significant pace. When we acquired Vueling it flew about 14.7 million passengers. Last year it flew 21.5 million. We have a growth target of between 12% and 16% for that business this year. We are in an industry that benefits from growth, sustained by the demand that exists in the market. We are sensible in how we approach it but our reason for being attracted to Aer Lingus is our belief that there is growth opportunity in the Irish market. Ireland has come through a deep recession and is growing at a significant pace. It is one of the fastest growing economies and I believe that growth can be sustainable. There is a direct benefit to the number of people travelling into and out of this country. I believe Ireland represents a huge opportunity for tourism, particularly with the restructured cost base. That is what attracts us to it. We are open to looking at any prospect for growth at Dublin, Cork, Shannon or anywhere else growth may exist.

In relation to the Heathrow-Dublin services, there may be some rationalisation of the schedules so we do not overlap with one another.

When British Airways and Iberia merged we continued to operate the same number of services but just moved some of the services around so that we had a schedule that stretched right through the day rather than having certain flights operating on top of one another, which clearly would not make sense. What I would see is that Aer Lingus would continue to operate into terminal 2 at Heathrow and British Airways would continue to operate into terminal 5, which gives opportunities to customers. Operating into terminal 2 is a very good service and probably marginally better if one is making a point-to-point journey, in other words, if one is flying to London and that is one's destination. It is probably better going into terminal 2, T2, whereas if one is connecting at London, terminal 5, T5, is a better option. We would look at how we manage the flights through the day to ensure that we have a good selection of services both into T2 and into T5. We believe that is the sensible thing to do.

Gatwick is a good airport. We have a strong presence there through British Airways, Iberia operates into it and Vueling are also operates into it. We see no reason we cannot have Aer Lingus operating in there as well and working together where it makes sense to feed traffic to one another if we can do that but to support one another to sustain and potentially grow the network we operate.

To follow up on Deputy O'Donovan's question regarding the five-year guarantee, why was that number of years decided and would Mr. Walsh consider extending it?

Mr. Willie Walsh

If I am honest, I think five years is a long time. We concluded that we were prepared to offer five years following significant internal debate. Given that no guarantee and no commitment exists today, and the Government has no influence over that issue today, we believe this is a significant concession and commitment that has been given by IAG to make an effort to appease what I consider to be unnecessary concern about the operation. A number of members of the committee have challenged me to give a specific commitment and I have said that I am happy to give a specific commitment for Cork and Shannon, which I have now given publicly, but I think the five years is more than adequate. I would hope and expect that through that five-year period people would be able to see what has happened, would be able to witness the commitments being delivered by us, would be able to see the security that exists through those services and would be delighted to see how we are succeeding and retaining those services. That commitment does not exist today. You do not have it and you cannot get it and we are the only people who would be prepared to give it. I would go so far as to say that I do not believe the Aer Lingus management could offer that today because it would have other shareholders today who would say: "Why are you doing that?" We can give it by virtue of the fact, as I said, that our approach here is to acquire 100% of the airline and having direct control of it being able to give commitments that nobody else could give.

We will now move on to the rest of the members. The next speaker is Deputy Tom Fleming followed by-----

I am a member of the committee

I know that and Deputy Tom Fleming is one also.

Did the Chairman say he would move on to the non-members?

No. What I said is that we will move on to the rest of the members. We have just finished with the lead spokespeople.

(Interruptions).

I would never forget about the Deputy.

(Interruptions).

The next speaker is Deputy Tom Fleming followed by Deputy Walsh and they will have two minutes to put their questions and a further minute to come back in after their questions have been answered. I will bring in the rest of the members in groups of two speakers.

What is the true market value of the Heathrow slots? Many figures have been bandied about ranging from €400 million up to €1 billion in the past number of weeks. What would be the projected growth in percentage terms for Aer Lingus within AIG over the next five years? Can Mr. Walsh give an appropriate growth percentage for the airline?

It is imperative that our regional airports, in particular Cork and Shannon, and also Knock as has been stated, would be kept up to standard and that connectivity, if anything, would be expanded for those airports. Due to the fact that there are in the region of 70,000 foreign direct investment jobs in those regions, it is essential that they would be maintained and there would be the possibility of the creation of new jobs.

What will be the resultant impact on our regional airports from the point of view of peripheral areas such as Kerry and Donegal where there is a public service obligation already in place for those two regional airports? How will the viability of those airports be affected? The tourism industry is most important for those regions. Kerry is at the southern tip on the western seaboard. We have a huge tourism industry and those regional airports are important for attracting businesses to those regions and for retaining existing businesses.

If Mr. Willie Walsh was to move on in the next number of years, as anybody can, to another venture and another company, what guarantees would there be for Aer Lingus after he left? Deputy O'Donovan mentioned cast-iron guarantees. Can we tie that down and have a guarantee that everything will be in place if there is agreement on a takeover?

Thank you Deputy. I call Deputy Walsh and we will get a response to the two Deputies' questions.

Having listened to Mr. Walsh today and listened to his commentary over the last number of weeks, there is a good deal of merit in what he is proposing for Aer Lingus. Significant opportunities would arise for Aer Lingus, particularly in it piggy-backing in on many of the marketing links that IAG has established across Europe and the US. However, clearly there are many concerns and they have been expressed here today. They all surround the issue of the nature of Mr. Walsh's guarantee and the guarantees that it would give to Shannon and Cork in particular. He has been helpful. In his response to Deputy O'Donovan, he used language to the effect that he is prepared to consider extending the guarantees. My understanding all along was that what one had one held and in terms of connectivity, for example, from Shannon into Heathrow and the transatlantic routes out of Shannon, that at a very minimum, his guarantee could cover those. He did not really answer Deputy Dooley when he questioned him on those, but in terms of his response to Deputy O'Donovan, he suggested that he would be prepared to consider that. In order to bring people on board, he might need to go a bit stronger on that again and offer a firm commitment that this would form part of his guarantee. I think if he did that, he would bring people on board.

In terms of the five-year guarantee, Mr. Walsh did not become one of the pre-eminent airline executives in the world without having some strong negotiating skills. His opening gambit is a five-year guarantee. Would he be prepared to consider something further? He said he had exhaustive conversations with his board about this, but would he be prepared to consider extending that and come back to us on it?

In terms of the future of Aer Lingus, in the absence of this deal, what future does he see for Aer Lingus? We have had considerable turmoil in the airline industry over the past decade. If we are to see a repeat of the downturn in the airline industry, what future would Mr. Walsh see for Aer Lingus?

I have a final point, and I thank the Chairman for his indulgence. In terms of the Dublin slots, we have, as Deputy McEntee said, 19 at present. Mr. Walsh could give a guarantee that he would maintain the Aer Lingus slots, the 11 slots that we have, but, in doing that, the group could reduce its overall number of slots. Will his guarantee provide that the Dublin-Heathrow slots will be maintained at 19? I have other questions but I have run out my allocated time.

The Deputy has used the extra minute he has before he has got a response to his questions.

Mr. Willie Walsh

Deputy Tom Fleming asked about the market value of slots. To be honest, I cannot answer that because the market value depends on having a willing seller and a willing buyer. I am not aware of anybody suggesting that Aer Lingus should sell slots. In fact, I am not aware of Aer Lingus ever attempting to sell slots at Heathrow. Some of the speculation in the press has resulted from a reported slot deal that has taken place recently where it is reported that an airline, yet to be named, paid $60 million to acquire a slot from SAS and, therefore, they are assuming that all slots of Heathrow have a value of €60 million. That is nonsense. Quite honestly, there are slots available at Heathrow today that people have not taken up.

That is mainly because they are at times of the day and days of the week when they do not want them. Without question, some slots do have value.

There is only one airline that has ever put the slots on their balance sheet, and that was BMI in 2008, when they had 77 slot pairs and they put a value on those slots of £770 million. IAG acquired that business for £172.5 million in 2012, at a time when it had 54 slots. The implied value of £10 million per slot in 2008 certainly did not hold to 2012 when IAG bought the airline. That £172.5 million was the gross figure. The net figure we paid was actually considerably lower than that. Slots can have a value, but the value changes. It is dependent on somebody being willing to sell and equally on somebody being willing to buy. Slots have traded in Heathrow for less than £1 million, they have traded for £10 million, and they have traded for £5 million. There is not a fixed price. Typically, the early morning slots have more value than the midday slots, which in turn are more valuable than evening slots. There is a sliding scale. Many slots that come on the market do not get sold because nobody is interested in buying them.

With regard to the PSO for Kerry and Donegal, I am assuming that is a Government decision. Interestingly, it is a five-year Government commitment. I am assuming that will continue, but it is something that Government will have to determine.

I had understood that the PSOs were just yearly.

Mr. Willie Walsh

As I understand it, the PSO is for a maximum of five years, but if it is yearly it is even less, so that could be interesting.

I think it was two-yearly.

Mr. Willie Walsh

I assure Deputy Tom Fleming that, without question, I will move on at some time. This is not Willie Walsh making a bid to acquire Aer Lingus; this is IAG making a bid to acquire Aer Lingus. IAG is a significant company with clear governance rules. The board of IAG has unanimously supported the bid to acquire Aer Lingus. It was not a decision taken by me; it was a decision taken by the board. The analysis was carried out by a team that reports to me. This was not driven by me. This is not me on a solo run trying to acquire Aer Lingus. This is IAG, the business, with the full, unanimous support of our board, seeking to acquire Aer Lingus. The commitments that are given are not commitments from Willie Walsh; they are commitments from IAG, the entity.

Deputy Walsh referred to the five-year commitment. He is correct in that I may have said "consider," so allow me, then, to harden that and say "Yes, I would give a commitment in the same way." I have considered it and I will do that. It is not my opening gambit. Let me be honest; I am not prepared to go beyond five years. People who have negotiated with me have sometimes come to realise that when I make an opening offer my second offer is actually worse than the first one. Do not believe that because I make a proposal I am ready to improve it. If my proposal is rejected I may remove the proposal or I may reduce it, but I can tell you for definite that I am not prepared to increase it.

I was asked about the future of Aer Lingus. I spent 25 years at Aer Lingus and I had a fantastic time. I loved every minute of it. I wish Aer Lingus well. When IAG approached the board of Aer Lingus we were very clear that we wanted to do this in a friendly way. We made clear to the board that if it did not welcome our approach, that would be the end of it. We had negotiations on price with the board of Aer Lingus, and the price we finally suggested was one that the board felt represented value. It was a significant premium on the price that Aer Lingus shares were trading at before IAG made its approach.

What will the future be? I think Aer Lingus has done a good job. It has opportunities to grow, and these opportunities will be secured if it becomes part of IAG. There is significantly less risk to anything that Aer Lingus would want to do as a result of its being part of IAG, and there is a massive upside opportunity. I wish the company well, and if we do not succeed with our bid I will continue to wish it well. I will not say anything that might undermine that other than to say that we are operating in a very competitive industry that is consolidating. Aer Lingus is a small carrier on a global scale, which punches way above its weight because of the brand. Its opportunities will be much more interesting and will be significantly better as part of IAG than they will ever be if it remains alone.

With regard to Dublin Airport, IAG would look at rationalising the schedule to ensure there is an even spread. The commitment that IAG is giving is for the Aer Lingus slots. IAG does not believe there is a competition issue, but I cannot prejudge what the competition authorities would say about it.

Arising from Mr. Walsh's contribution regarding the ownership of these slots, how would he respond if the Government were to approach IAG and suggest that it wanted to retain ownership of the slots and lease them to IAG or Aer Lingus on a five-year basis?

Mr. Willie Walsh

Governments cannot own slots. Only airlines can own slots. Technically, even the airlines do not own the slots; they have the right to operate them. This is known as grandfather rights. A non-airline cannot hold slots, so it has to be an airline entity.

I welcome Mr. Walsh and Mr. Griffin. Mr. Walsh said that Ireland is a great market. I would say, "Please come in, but do not take over an existing producer." If it is a great market, IAG can come to any airport in Ireland that it wishes to. We will be delighted to see them. My concern is that an existing producer will be removed.

Deputy O'Donovan spoke about the performance of British Airways in the UK regions. Does it not contrast with what IAG is promising in Dublin? I do not see this in Belfast, Edinburgh, Glasgow, Manchester or Birmingham.

Mr. Willie Walsh

Senator Barrett is absolutely right. The Senator and I discussed the airline industry many years ago, and I respect his views. He has been a very strong advocate for competition and deregulation and is a strong supporter of Ryanair and an admirer of Michael O'Leary, as I am. What I can say to the Senator is, yes, IAG has opportunities to grow organically, but we also have opportunities to grow inorganically. That is the nature of business. When a business is looking at growth, it can see an opportunity to work with another entity and acquire it as part of a group. I believe IAG will bring fantastic value to Aer Lingus because of the structure within IAG. I understand some of the concerns that have been expressed, which would be valid if this was British Airways trying to acquire Aer Lingus. It is not. This is not BA seeking to acquire Aer Lingus; it is IAG. BA does not have any direct influence over the running of IAG. There is no BA representative on the board of IAG. The CEO of BA is part of my management team, just as the CEO of Aer Lingus would be reporting directly to me. They would have equal weight and equal votes around the management committee table. Aer Lingus would be in a position to influence the development of a global airline group in a way that it cannot do today, and would get all the benefit of the strength of that group behind it and working with it to enhance the growth plans that it has. While Senator Barrett sees it as taking out an existing producer, I see it as working with an existing producer to make that producer more efficient, to give it scale that it cannot access in isolation and to help it to grow in a way that it could not do otherwise.

IAG operates significant services into the UK regions. We fly to Aberdeen, Edinburgh, Glasgow, Newcastle, Manchester, Leeds, Bradford and Belfast. It is one of the biggest operators in some of these airports. Senator Barrett was correct when he highlighted the number of airlines. Some of the figures he quoted are different from the figures provided by the airports in terms of the number of routes they have. While the Senator may suggest that IAG operates only one service, we fly 6 million passengers in the UK domestic market. We are probably the biggest operator in terms of movement in places like Glasgow and Edinburgh, where we have a significant presence. We operated flights from Glasgow and Edinburgh into London Heathrow, London Gatwick, and London City airports. I assure the Senator that these airports love the British Airways presence. They beg for more services from British Airways. They do not in any way criticise us for what we do, and would be distraught if there was any suggestion that we might withdraw any of the services we provide. What we give them is connectivity to a global hub that they cannot access without the frequency of services that we offer.

Yes, they are connected to Amsterdam, albeit not with the same frequency of service. Similarly, they are connected to Paris and Dubai, but not with the same frequency of service. We offer connectivity - about which everybody present has expressed concerns - to these airports in a way that nobody else provides.

In respect of all those airports, I note from their websites that while British Airways serves Heathrow, all the other routes are developed by other carriers. Mr. Walsh is suggesting that what he did in the United Kingdom regions, that is, linking them all to Heathrow, will not be repeated in Dublin and we will not be left with the small presence on the north Atlantic that Birmingham, Manchester, Glasgow, Edinburgh and Belfast have. In its own jurisdiction, British Airways is not doing it for the regions.

Mr. Willie Walsh

We operate the global hub. Most countries have one hub although some countries try to develop a second hub. We operate the international hub, the value of which is hugely significant. I am sure the Senator has heard the debate in the United Kingdom about the value the hub brings to the economy of the United Kingdom. By operating a hub, one can serve destinations that cannot be viable in isolation from other airports because they require significant traffic feed. That is particularly true for flights to what normally are labelled developing economies, which are huge economies today. One also gets the opportunity to operate greater frequency of services, which is extremely valuable to business. We actually generate huge value to the United Kingdom's economy by operating the hub at Heathrow. I can tell the Senator the airports he talks about are delighted to be connected to the British Airways network. We have 55 Heathrow slots assigned to the United Kingdom domestic market. If one wants to put the value of that, it is nearly €3 billion if one wishes to use that average.

The joint committee can look at the websites for the airports I mentioned and see how it is all Heathrow and London-focused. If one wants to have routes to anywhere else, Aer Lingus would be doing a better job.

Mr. Willie Walsh

Aer Lingus will continue to do it.

I must point out that the consolidations Mr. Walsh talked about leave out two new entrants, namely, Ryanair, which is heading towards 100 million passengers and EasyJet, with 60 million passengers. There is a different model than the consolidation of legacy airlines.

Mr. Willie Walsh

Yes, and our market capitalisation is 59% higher than that of EasyJet and is approximately 8% or 9% higher than that of Ryanair. Moreover the Senator made-----

Passengers are voting with their feet.

Mr. Willie Walsh

Passengers vote with their feet because they come to us. The Senator made a comment that in our home market, the United Kingdom, EasyJet and Ryanair fly more passengers; they do not. British Airways flies more passengers in the United Kingdom than does any other airline. It flies 39.9 million passengers, as against EasyJet's total of 34.8 million and Ryanair's total of 29.4 million. These are the statistics from the Civil Aviation Authority.

My statistics from the CAA for EasyJet state it has 51 million passengers. That figure is for 2013 and was downloaded this morning from the Civil Aviation Authority's website.

Mr. Willie Walsh

No, they are the passengers that EasyJet the airline flies, not the passengers that EasyJet flies from the United Kingdom because EasyJet operates outside the United Kingdom and connects countries other than the United Kingdom. I refer to a comment the Senator made, when he stated that British Airways was being outshone by both EasyJet and Ryanair in the domestic market. That is incorrect. According to the CAA statistics, British Airways flew 39.9 million passengers in the United Kingdom, whereas EasyJet flew 34.8 million passengers and Ryanair flew 29.4 million passengers. While EasyJet did fly passengers from France to Italy and perhaps from Denmark to Spain, not all the passengers it flies are in the United Kingdom market. British Airways also is the carrier that provides 62% of all cargo capacity in the United Kingdom, whereas EasyJet and Ryanair provide zero capacity. Members should consider the presentations made before this joint committee about the vital importance of cargo to Enterprise Ireland and the IDA to secure support investment in Ireland, and neither EasyJet nor Ryanair provide any of that. In the United Kingdom, British Airways provides 62% of it.

Is it not correct that to British Airways at present, Ireland is George Best and Dublin airports and nothing else? It does not serve Cork or Shannon airports but withdrew from those routes. Is that not correct?

Mr. Willie Walsh

If we succeed in acquiring Aer Lingus, we will continue to operate the services Aer Lingus operates and will look to build and expand that. That is the model and is what we have done when we acquired Vueling. We have grown that airline in a way that would have been impossible for Vueling to grow in isolation.

We will turn to Senator Mooney.

I welcome Mr. Walsh, who obviously has to hand an impressive array of statistics. However, in light of all the popularity Mr. Walsh suggests British Airways enjoys in respect of its statistics and passengers, I do not understand why it simply does not come in to Dublin. Why does British Airways not operate transatlantic flights? Why must it take over Aer Lingus in order to develop its business out of Dublin? In the context of the guarantee, I acknowledge Mr. Walsh has stated that he will have a bank of lawyers and the Government will have the same. However, I suggest to him that the five-year rule is not legally enforceable. Does he not agree it is not legally enforceable because there are governance issues? The airline business is cyclical in any event and if it went through situations in which the board of IAG was obliged to revise its position, I suggest it would be legally obliged, because of governance issues, to so do and to work and act in the best interests of the company. Consequently, I suggest to Mr. Walsh the guarantee is not legally enforceable. Perhaps Mr. Walsh might have an opinion in this regard.

In the context of cost, Mr. Walsh has stated the existing flights out of Dublin into London would be retained. Again, I cannot see how Mr. Walsh can guarantee that because it has been proven time and again that where consolidation takes place, changes to trading patterns are inevitable. For example, costs rise, not fall, because there is less competition. As Mr. Walsh is aware, the Dublin to Heathrow route was one of the most expensive in the world at one point because of a cartel operated between Aer Lingus and British Airways. Mr. Walsh should answer in the context of what will be the plans for IAG on the Dublin-Heathrow route. Why would IAG continue to operate the same level of flights when it now would be in a position to reduce the number of those flights, while still controlling the Dublin to Heathrow route through the ownership of Aer Lingus? This could result in an increase in costs for passengers that would not be in the best interests either of passengers leaving Ireland or - of more relevance - those coming into this country. This is a real concern and of all the issues, the possibility that cost would increase is one of the two specific issues about which I am most concerned.

I invite Mr. Walsh to refute that view and indicate this would not happen. I also refer, of course, to the inevitable job reductions in a company Mr. Walsh has acknowledged is highly successful. It actually has increased its workforce in recent years by almost 1,000. Why then, if the consolidation primarily is being led by independent airlines rather than by legacy airlines across the world, particularly in Europe, is there any advantage to the Government in allowing IAG to take over something for marginal financial interest? There is absolutely no financial advantage in this regard.

Mr. Willie Walsh

It is clear that I will not agree with anything the Senator has said. My commitments are strong and are legally enforceable. I know the airline business. I have worked in it for 35 years and know it very well.

Mr. Willie Walsh

I can look at trends that have taken place during global recessions and what happens with capacity. We can continue to fly the same number of services with smaller aircraft and can continue to look to feed traffic in and out. That is the beauty of being part of a group. It gives one flexibility in a downturn one does not have in isolation. Members should picture the scenario in which Aer Lingus operates these 23 slots and gets into a global recession in isolation. It will face a huge decision in which it either continues to operate those slots, potentially unprofitably, or it gives up the slots for no consideration. If Aer Lingus does not operate them, under the rule known as the 80:20 use-it-or-lose-it rule, the slots would be lost and would go back into the slot pool to be distributed to other airlines. Why did Aer Lingus continue to operate those slots during the deep recession? It was for two reasons. First, they were profitable and could sustain margins going through that recession. Second, if Aer Lingus did not operate them, it would have lost them for no consideration. Why would we do anything different? Does the Senator honestly believe we would look at it in a different way? Does the Senator think we simply would stand back and give up slots everybody states have huge value? We would continue to operate them because we would wish to continue to operate them in the long term. We are a long-term player in this business and we wish to provide additional support to Aer Lingus that will give it comfort through a recession. That was absolutely critical to the survival of Iberia during the recession it faced and the restructuring it needed. Everything we are talking about is positive for Aer Lingus in good times and is especially positive for Aer Lingus in bad times.

On costs, I disagree with the Senator because if one takes the London to Madrid route, where British Airways and Iberia operate together, fares did not rise. Costs did not increase for the consumer. They did not increase because it is a competitive market in which one has other options. Were we to try to drive up the prices, the Senator can be damn sure that Mr. O'Leary would be in to offer services to fly one to plenty of other airports in London and to provide one with connectivity that would force us to compete. It is a competitive market in which one does not have that ability. If we did, we would not operate with the margins we have today but would be operating with significantly higher margins, like other businesses.

It is a brutally competitive business and will continue to be so. That competition will always benefit the consumer. The consumer has much more choice today than they ever had in the past. That is great credit to Michael O’Leary for being the revolutionary he is in changing the airline industry. The Senator’s concerns are not valid because we would commit to continue to operate those slots. We would be crazy not to. If we did not operate them, we would lose them.

I am going to allow non-members of the committee to join in the discussion. It will be Deputies Joe Carey, Michael McNamara and Jerry Buttimer, in that order.

Mr. Walsh said he is all about growth but I did not hear him speak about growth at Shannon Airport. He did not expand on it here today or earlier in his radio interview with Sean O’Rourke. Will he expand on growth opportunities at Shannon Airport, particularly exploiting the pre-clearance facility there?

The fundamental question for people in the mid-west is connectivity. Mr. Walsh gave a commitment here today to a five-year deal for both Cork and Shannon. This is not a run-of-the-mill deal as he is negotiating with the Government. Connectivity is key to the regions but the mid-west has had the experience of once bitten, twice shy in that regard. Will he go further than the five-year commitment to ten or 15 years? The mid-west needs that type of commitment because it will be cut off from the world if it is cut off from the hub at Heathrow Airport.

I listened carefully to what Mr. Walsh said on RTE radio this morning about developing transatlantic passengers and transit passengers into Heathrow. It seemed clear to me that he intends to develop a hub in Ireland, which is good news. However, he also said something contradictory earlier today. He said most countries have one hub and most businesses would be crazy to give a guarantee to one service provider of all of their work, regardless of cost and quality. Since Mr. Walsh was at this committee last, one of the things that has not happened is that a cargo hub has not been developed at Shannon Airport. One of the things that has happened is that Shannon Airport is a 24-hour international airport which is State-owned but is in a position to compete with the Dublin Airport Authority.

I appreciate Mr. Walsh does not want to talk about Shannon specifically but I do. He is here on behalf of his board and shareholders. I am here on behalf of my constituents. Does Mr. Walsh envisage that a cargo hub could or would be developed at Shannon? Does he envisage that a hub could or would be developed at Shannon? Could a hub realistically be developed in five years, given Mr Walsh’s suggestion that he might guarantee five years? Will he look at connectivity from Shannon to European hubs other than Heathrow because, unfortunately, that has not been arrived at by the new board and management at Shannon Airport?

Given Mr. Walsh’s previous incarnation as chief executive officer of Aer Lingus and having spoken earlier with warmth and affinity for Cork Airport, in growing the business out of that airport, which is still the second busiest airport in the State even though it has had a 36% decline in passenger numbers, what suggestions would the acquisition and merger bring to Cork to increase its passenger numbers? If the bid was successful, how would he follow through on this? I take his point about Cork being the pharmaceutical capital of this country, making the airport a suitable location for cargo. Up to now, IAG has not capitalised on these opportunities. How can we get a guarantee that this will happen if the merger goes ahead? Cork Airport is centrally linked to Heathrow, as it is to Paris and Amsterdam. What guarantees will Mr. Walsh give for connectivity to those hubs?

Mr. Willie Walsh

I have been very direct in my response to the question whether I would be prepared to extend the commitment beyond five years. My answer is no. Five years is what we would be prepared to offer. I do not need to remind members that this is a commitment that does not exist. There is no commitment on the hubs today. Aer Lingus has never been prepared to give a commitment on them. I would question whether the board of Aer Lingus could give a commitment. I recognise there are concerns that this changes the environment in which we operate. It is on that basis that I am prepared to give a commitment that we would continue to operate the Shannon-----

Would Mr. Walsh give a commitment for after five years?

Mr. Willie Walsh

I have answered that. In those five years I would expect to see the people in Shannon give a commitment to the service that is being provided. It is there to be used and we want to make it work. The more people that fly on it, the more successful it will be. It would be great to see that there was demand that exceeded the capacity in order that we would have to look at putting on additional services. It is not a one-way commitment. I am giving a one-way commitment saying we will be there for five years and continue to operate the services. That is a commitment that is not in place today.

I am aware of some talk about the development of a cargo hub. IAG does not operate any dedicated cargo aircraft. All of the cargo we fly is carried in the belly hold of the aircraft. We used to lease three dedicated 747 freighters to operate on our behalf. We have an arrangement with Qatar Airways, a big cargo operator, which provides us with the capacity to supplement the direct passenger capacity that we have. We do not have the equipment, and therefore are not in a position, to develop a cargo hub at Shannon. It would be great if there was one developed there. I am absolutely sure that our cargo team would want to connect into that somehow. However, we do not have the dedicated cargo aircraft necessary to develop such a hub at Shannon.

Can one develop a hub in five years? It is very difficult. While Heathrow is the main hub, we do have a presence at Gatwick where we have both long-haul and short-haul services. We feed traffic from one to the other. It is not structured in the same way as Heathrow is structured as a hub. One can have a situation where one has passengers transferring but it is not a structured hub necessarily. There is no reason one cannot fly passengers into Shannon to connect on to transatlantic services. To develop it as a hub, however, one would require a lot more services. I do not believe there are enough direct amounts to support all of those services. I am sure there is capacity to fly services, particularly from the UK and UK provincial airports, possibly through the arrangement with Aer Lingus Regional or Stobart Air. That is something we can look at but, credibly, I do not believe one could develop a second hub in Ireland given that it is only now that they are setting about trying to develop Dublin as the first hub. Up to 750,000 passengers transferred in Dublin, which is a small figure, representing less than 5% of the overall number of passengers who went through Dublin. One can make it easy for people to connect.

On connectivity to other hubs, I am not sure whether there is demand for such services. The smallest gauge of aircraft that Aer Lingus will have is the A320 with 174 seats. With that gauge of aircraft, one needs quite a lot of traffic to make it sustainable. It may be possible with smaller gauge aircraft but Aer Lingus does not have those types of aircraft. It has some A319s which are on lease but will leave the fleet in the next year.

I do not know whether there would be sufficient traffic to support the operation on a viable basis of flights from Shannon into other hubs.

My experience of Cork, Shannon and Dublin has been great. Given that I have been to Knock Airport only once, I cannot comment on it. Cork has always been a vibrant city with a very strong business focus and attitude and I am surprised at the decline in traffic in Cork Airport. It contradicts the reported growth in traffic from Cork to Heathrow. I know from the traffic we get from Cork to Heathrow and the transfers that they are going all over the world. Some of it is pharmaceutical related. We will carefully study Cork Airport to see if the loss in traffic can be recaptured. I do not know where it has gone to, whether Cork people are not travelling or it is something else. I remember when it took two hours to drive from Shannon to Cork. It does not take two hours today. With the improvement in the road network, there is more competition.

They can go by helicopter.

How would this proposal improve or help Cork Airport?

Mr. Willie Walsh

It would make Aer Lingus more efficient, and anything that does that would make the possibilities for Aer Lingus operating routes more attractive and potentially more viable. We want to grow the business. We do not want to buy a business and shrink it. There would be no sense in it. We are paying a very healthy premium to acquire a business because we believe we can grow it. Our objective will be to grow the business wherever we can, and whether it is in Cork, Shannon or Dublin, I will be delighted. I have no bias or preference of one over the other. DAA and Aer Lingus are working together to develop Dublin as a hub and have been very successful. It represents a great opportunity. It does not mean we are not seeking opportunities for Aer Lingus to grow at Shannon, Knock, Cork and anywhere else. If Aer Lingus is part of IAG, Aer Lingus will be a more efficient company because it can tap into all the benefits of the scale we would give.

Most of my questions have already been asked. Mr. Walsh is very welcome. It is good to get an airing of his views. It is the first time we will have heard them publicly. I live in Shannon town and there are fears. In the Aer Lingus debacle of 2007, we lost 368,000 customers in the region and there was devastation. I do not see an issue with the Shannon Heathrow slots, because the three we have carry a 76% to 78% load. There is a need among the business community for an earlier morning slot out of Shannon to Heathrow, Dublin or another major hub. Given that Mr. Walsh has guaranteed the Heathrow slots, my fear is about the transatlantic business, and Mr. Walsh might able to echo it. Many of our business people on the west coast travel across the Atlantic. I fear that instead of New York-Shannon-Boston-Shannon we will have New York-Heathrow with a back feed to Shannon, or New York-Dublin and people travelling to the west by bus. Would Mr. Walsh guarantee the transatlantic business that exists during the summer? It is critical. While the Shannon-Heathrow flights are busy, I am very concerned about the transatlantic business.

I thank Mr. Walsh and his colleague. Mr. Walsh has been CEO of BA and then IAG for the past ten years. During this time, what changes have there been in the regional airports out of which his airline operated on the north transatlantic routes? What has his model been in the airlines he has taken over, particularly in the UK over the years? Could he tell me the number of regional airports that were flying transatlantic and how many are now going through the London routes? Mr. Walsh spoke about the five-year commitment. He is answerable to a board and has referred to the best legal minds. The devil is in the detail. How can he give a legal commitment? Mr. Walsh has spoken about profitability, but it is relative. Two flights may go out of Heathrow, one more profitable than the other, but both profitable. What is the determining ingredient? In an interview with the Irish Independent on 16 October, Mr. Walsh said he still had no designs on Aer Lingus at this price despite its valuable slots at the congested Heathrow Airport. Little more than a month and a half later, he put in a bid for Aer Lingus.

Mr. Walsh can hear the tangible concerns the people in this room have for their regions on the grounds of connectivity and the potential loss of jobs. Mr. Walsh obviously has a plan in his head. He is not potentially buying Aer Lingus for the craic. If the bid is successful, what would be the top five initiatives that would have a positive impact on the commercial outputs of Aer Lingus?

Mr. Willie Walsh

I have always said there is very strong demand for transatlantic flights from Shannon Airport during the summer. I had the same debate at the committee with then Senator, now Deputy, Timmy Dooley. This has not reduced but increased and is likely to continue to increase. Aer Lingus should continue to serve this market and I would want it to. As part of IAG, looking to build on it and feed traffic into it as part of our transatlantic joint business with American Airlines, Finnair, Iberia and BA will enhance the amount of traffic that could flow through it. It is a good business. It was always profitable. While the seasonal variation between winter and summer in Shannon is very strong, Aer Lingus has come up with a very smart way of dealing with it, which has been very successful and would continue.

Aer Lingus has done some very smart things in recent years. When I left Aer Lingus in 2004, we were flying 1.2 million transatlantic passengers. We are now celebrating the fact that it has reached 1.3 million. Aer Lingus went through a long period during which it was not fully developing and exploiting the market and I am delighted to see that it is now doing so. There must be great potential to move it beyond where it is and the potential would be significantly enhanced if one could put Aer Lingus into a joint business with American Airlines selling at one end of the route to its massive customer base. It has 100 million frequent fliers in its programme. Being able to tap into the American sales presence, the BA, Iberia and Vueling frequent fliers in our programme, our sales and marketing team and our presence goes way beyond anything Aer Lingus can afford to do in isolation. I do not think BA operated any regional services from-----

I meant airlines Mr. Walsh has taken over.

Mr. Willie Walsh

I have been involved with BA, Iberia, BMI, Vueling and-----

I referred to the airlines Mr. Walsh took over in the UK that were flying transatlantic.

Mr. Willie Walsh

There were none.

Were none of the airlines flying transatlantic through any of the regional airports?

Mr. Willie Walsh

None of the airlines I have been involved in.

Mr. Willie Walsh

No.

Does IAG route everything through Heathrow?

Mr. Willie Walsh

No, through Heathrow and Gatwick. We operate transatlantic services from Gatwick as well.

Is Mr. Walsh saying then that he is willing to look at Shannon Airport as a hub for transatlantic traffic?

Mr. Willie Walsh

No. I said I cannot see how one can develop it as a hub but one can transfer passengers at Shannon by feeding passengers flying into Shannon onto the transatlantic services that are operated from Shannon. That is possible.

Let me tell the committee of the experience. As members may be aware, BA operates a business-class service from London City to New York that stops off at Shannon. These are very high value customers. Most of them were not aware of Shannon or the facilities that existed at Shannon until we showed it to them. They love it. They ask for more of that. Last week, I was with one of our biggest shareholders in London who has a big operation in Los Angeles. What the shareholder said to me was, "If you succeed in acquiring Aer Lingus, we will fly with Aer Lingus on the transatlantic because we love the ability to do pre-clearance", rather than clearance when they arrive. This is something that we can bring to the party that is not there in isolation. That is a significant potential.

What of the five-year commitment with IAG's board?

Mr. Willie Walsh

The board has given me discretion to negotiate on these issues and my board will support me on that.

Could a situation arise-----

Okay-----

This is important.

Ten seconds.

If the profitability on routes over the five years was questionable, what view would Mr. Walsh take?

Mr. Willie Walsh

I have answered that question. If one does not operate those slots, one loses them and one would be stupid. I am not stupid. I am a business person. I have never given up a slot at Heathrow. I have continued, even through the deepest recession, to operate slots at Heathrow because the value is long term.

But Mr. Walsh would offer them on another route?

Maybe Mr. Walsh could address Deputy Regina Doherty.

Mr. Willie Walsh

I will give Deputy Regina Doherty two really big important developments that we would address quickly. First, we would bring Aer Lingus into the oneworld alliance. Aer Lingus was in the oneworld alliance previously. I believe there is very significant benefit to the Aer Lingus customer base and to existing oneworld customers by Aer Lingus being part of that. I understand the reason Aer Lingus left the oneworld alliance was because there is a cost associated, particularly related to the cost of IT, which has since been addressed by oneworld. We would also bring Aer Lingus into the transatlantic joint business with American Airlines, British Airways, Iberia and Finnair. Those are two massive short-term developments that would have huge value to Aer Lingus customers, the Irish economy and Aer Lingus stakeholders.

Senator Mulcahy wants to come in for 30 seconds.

It is to qualify that the transatlantic routes are part of the five-year guarantee.

Mr. Willie Walsh

No. The guarantee that we gave was on the Heathrow slots.

Not the transatlantic slots?

Mr. Willie Walsh

No. It is specifically in relation to the Heathrow slots.

The final three speakers are Deputies Joe Costello, Michelle Mulherin and Áine Collins, with two minutes each.

I welcome Mr. Griffin and Mr. Walsh. What Mr. Walsh has to do today and in the coming days is to convince the Government and us to troop into the Dáil and vote to dispose of the 25.1% shareholding. When the privatisation took place in 2006-2007, there was a specific amendment put in place for a particular purpose, that is, to prevent the entire privatisation of Aer Lingus so that we would protect the jobs, the slots and the connectivity. It is difficult to see how a five-year guarantee has changed that. In that respect, why should IAG not consider the Government as a shareholder remaining part of the Aer Lingus shareholding process and should Mr. Walsh not be looking for guarantees from the Government shareholding rather than he giving the Government guarantees?

As far as I know, and perhaps Mr. Walsh will tell us, both the offer from Ryanair previously and the one Mr. Walsh has made were unsolicited, or was the offer solicited by any body or entity? Mr. Walsh attempted to buy Aer Lingus previously by way of managerial buy-out and perhaps he can explain that. At this point in time, Mr. Walsh is the chairman-----

Mr. Willie Walsh

CEO.

Mr. Walsh is the CEO of IAG-----

Mr. Willie Walsh

Yes.

-----but he is also the chairman of NewERA-----

Mr. Willie Walsh

No, the NTMA.

-----of the NTMA, which contains the NewERA company which has responsibility for the disposal of State assets. Is there not a certain degree of incompatibility in Mr. Walsh's role in seeking to buy out Aer Lingus in that respect?

Third, Mr. Walsh is, I presume, a deferred pensioner. In recent times, the deferred pensioners have very considerable grievances about the manner in which they have been treated. What does he have to say to that?

I welcome Mr. Walsh and Mr. Griffin. We are trying today to elicit the plans Mr. Walsh has for Aer Lingus if IAG were to acquire it, and I want to focus on that aspect. There is the growth of which Mr. Walsh spoke and the possibility for expansion in transatlantic traffic. I want to ask Mr. Walsh whether he would consider now, even if he has not previously, looking at taking transatlantic flights out of Ireland West Airport Knock. There is a massive region in the west and north west. There was an airline operating transatlantic flights out of there previously and I understand that-----

I note there is a vote in the House and ask that we speed up proceedings.

I understand that route finished up not because the route was not viable, but because of other operational problems with the airline that ran it.

On the board and management of Knock airport, the airport has proven itself to be lean and efficient, and it has been growing against the odds because, as Mr. Walsh will be aware, it is not a State airport in the traditional sense. I ask Mr. Walsh for his initial evaluation of that as a possibility. In the future, is it something he would look at for the west and north-west region, which is crying out for transatlantic connectivity for many reasons?

I ask Deputy Áine Collins to be brief.

I welcome Mr. Walsh and Mr. Griffin. I have a few quick questions. One relates to projections, which, I am sure, Mr. Walsh has done. He stated earlier that Aer Lingus carried 1.3 million passengers last year. If that figure is correct, what would he see as the corresponding figure in three years' time?

Moving to the regional issue, I will focus on Cork. My colleague, Deputy Buttimer asked similar questions. On the connectivity to Heathrow, Amsterdam and the United Kingdom, can these links be guaranteed? The big business issue for Cork, which has suffered considerably in the past 12 months - for example, in January alone, it lost 16.5% of its business - is connectivity to Dublin.

We will not have time to hear the answers. Could we park it now, come back and then finish it off? It might be better. That is merely a suggestion.

Mr. Willie Walsh

If the Chairman would prefer, I am happy to wait.

We have a couple of minutes, if Mr. Walsh wants to give brief answers. We will see how it goes.

If there is no CEO to consider, there might not be a Government either if we do not get to the vote.

I did not know the worries were that important. Perhaps Mr. Walsh would continue for two minutes.

Mr. Willie Walsh

I am happy to continue.

In response to Deputy Costello, I am fully familiar with the terms of the Aer Lingus Act 2004 and the requirement for the Minister for Finance to put before the Dáil a proposal to dispose of shares. We fully understand that and I understand the reasons it was put in place. However, it is important to point out that the 25.1% does not in any way give the Government a voice over how the Heathrow slots are operated - there was a misunderstanding at the time that it may have. All it does is allow the Government, with the support of other shareholders holding 5%, to block the disposal of a share. That is it. We are going well beyond what is available to the Government today by giving commitments to continue with the ability to allow the Government to exercise its voice over whether any Heathrow slots would be disposed of.

It looks like we must suspend. I ask members to come straight back because there are only a few minutes left in this.

Sitting suspended at 4.09 p.m. and resumed at 4.25 p.m.

We are back in public session.

Mr. Willie Walsh

Deputy Costello asked whether this was a solicited offer. This was an approach made by IAG to the board of Aer Lingus in December - I cannot remember the exact date. It was not that we had been approached by Aer Lingus with a view to us making an offer.

I was asked whether I should be looking for guarantees from the Government rather than offering guarantees to it. I have the experience of having been the CEO at Aer Lingus at a time when it went through a crisis. It was clear at the time that state aid rules would have prevented, and did prevent, the Irish Government from supporting Aer Lingus, hence the reason Aer Lingus had to undertake significant restructuring through its own resources. A separate investor investing does not prevent a Government from investing alongside it. With all respect to everybody, I am not sure about the idea that in an environment such as this, the Irish Government might be called upon to provide capital along with other shareholders. If there is a question to be asked about the Government selling then the Government spending money on an airline in an environment such as this would be quite controversial.

Our approach is to seek an irrevocable commitment from the Government and Ryanair to sell their shares to us. We recognise it is probably in the best interests of Aer Lingus that both major shareholders sell. It would provide certainty and clarity to Aer Lingus which do not exist today, and there will probably continue to be a bit of uncertainty with regard to Ryanair holding a stake. This would give the best opportunity to provide clarity on this.

Does Mr. Walsh fully rule out the possibility of the Government retaining its shareholding?

Mr. Willie Walsh

I am restricted in what I can say. Our approach is very clearly based on an irrevocable commitment from the Government and Ryanair. This is made clear in the proposal to make an offer.

I did not quite catch that. What is Mr. Walsh able to say on the Government's shareholding?

Mr. Willie Walsh

Our approach is based on the Government selling its shares to IAG.

Subject to negotiations?

Mr. Willie Walsh

The approach, as I said, is based on the Irish Government and Ryanair giving an irrevocable commitment to IAG to sell their shares.

We know this is true, but is that-----

Mr. Willie Walsh

That is as much as I can say and it is as much as I am going to say.

There was much debate about whether I was participating in a management buy-out, and I clearly recall my last appearance before the committee in 2004 which coincided with statements by somebody in Dáil Éireann about my intentions, which were untrue. I state categorically yet again that I was never involved in a management buy-out nor was I working with my colleagues to pursue one. We clearly asked the then Minister for Transport for permission to develop an investment proposal for Aer Lingus. No work was done on anything because no permission was ever given. We had withdrawn our request for permission before certain individuals, who I will not name, made references in Dáil Eireann to what we were trying to do. There was never a management buy-out, and there was never anything, because all we did was ask the Minister for Transport if we could start some work on developing an investment proposal, but the Minister never gave us permission and we gave a commitment that we would not do anything unless permission was granted. We then withdrew our request before the issue was finally considered by the Government and subsequently I left Aer Lingus before it was privatised.

With regard to NewERA, I am the chairman of-----

Does Mr. Walsh believe what he was doing was misrepresented?

Mr. Willie Walsh

It was very clearly misrepresented and I have said this. Comments that were made about what I was doing were completely wrong. I appreciate the fact that several Deputies at the time defended my position and my role and that of my former colleagues in what we had done and succeeded in doing in Aer Lingus. I very much appreciated the support.

I know I speak for my colleagues when I say we appreciate the support we were given at the time.

I am chairman of the NTMA. The committee will be aware that the National Treasury Management Agency (Amendment) Act contains a section which deals with material interests. Therefore, it envisaged the possibility that people involved in the NTMA might have a material interest. It sets out the procedure to be followed, which is being followed. I declared, even before I became involved, that, as a shareholder and deferred pensioner in Aer Lingus, I considered myself to have a material interest and that, therefore, I would not participate in any discussion within the NTMA on Aer Lingus. I am not provided with any document on that issue and will not be, nor will I seek to influence any debate or discussion on it. I am completely removed from anything the NTMA and NewERA do in regard to Aer Lingus.

Is there not still a conflict of interest in that NewERA is responsible for the disposal of all State assets?

Mr. Willie Walsh

No.

Despite the fact that Mr. Walsh stepped out, he is still chairman of the NTMA. Within it there is an entity called NewERA which is responsible for the disposal of all State assets, including the 25% shareholding in Aer Lingus. Is there still compatibility?

Mr. Willie Walsh

Absolutely, because, as I said, the legislation sets out what should happen, what will and does happen in the case of anybody with a material interest in anything to be discussed. I have been very clear publicly, within the NTMA and anybody who is interested, that I will not participate in any discussion or seek to influence or participate in any discussion within the NTMA or NewERA on this issue. It is dealt with under the legislation and I have followed the guidelines fully. In fact, I have gone well beyond them by declaring well in advance that I was a shareholder and a deferred pensioner. I considered this would not be something which would be classified under the legislation, but I made the declaration to put me in a position where I would not participate in any discussion on Aer Lingus. When I first started with the NTMA, the value of my shareholding in Aer Lingus fell below the €13,000 limit, but I declared it anyway. I have been completely upfront and spoken about this publicly. I do not participate and do not seek in any way to participate in or influence the debate. As I stated, other than respecting the decision of Aer Lingus shareholders on the payment of €190 million to address some of the shortfall in the scheme, we will not do anything other than honour the commitment already made.

On Knock airport, I am not aware of what happened previously in terms of transatlantic services. I am very familiar with the market size that would be required to support scheduled transatlantic services. I understand there are some transatlantic charter flights from Knock-----

As I explained, there is a one-off pilgrimage service from New York. If one draws a line from Louth to Galway, one will find that the west and north west are not serviced by motorways. The idea that we can readily access some other airport is not correct. There are no plans in that regard. I did not allow Mr. Walsh to finish, but is this something he might consider?

Mr. Willie Walsh

I will be perfectly honest with the Deputy. I have not had an opportunity to review anything regarding services from Knock airport, other than the service operated by Aer Lingus between Knock airport and Gatwick Airport. I am not aware that Aer Lingus is involved in any development of the market. It is something we would discuss with Aer Lingus management if we were successful in moving this issue forward. I would have to take advice of it.

Mr. Walsh has said he was in Knock only once.

Mr. Willie Walsh

Yes.

We will ensure he receives a welcome and an invitation, regardless of whether the sale goes ahead.

In view of the fact that Mr. Walsh wants to grow the business in the context of transatlantic services and we want to grow the tourism industry which would dovetail with his interest-----

Mr. Willie Walsh

I always admire airports that are proactive in approaching airlines to look for the introduction of services. I met some of the previous management team in Knock in the past few years. I have in my home in London a copy of the book on the development of Knock airport. I am prepared to look at anything that would make sense. As I do not have figures to support the proposal, I could not give the Deputy any comment.

An approach could be made which Mr. Walsh could consider.

Mr. Willie Walsh

I think the final question concerned services between Cork and Amsterdam.

I asked about existing services between Cork and UK airports.

Mr. Willie Walsh

I will be honest. The debate seemed to centre on the Heathrow Airport slots, the area we have examined. I have no problem if Aer Lingus believes it can operate a viable service to Amsterdam and Paris, which we would continue. British Airways flies to Amsterdam, Paris Orly and Paris Charles de Gaulle. We are not trying to say Aer Lingus can fly to Heathrow Airport and nowhere else. Vueling and Iberia fly to Paris Orly and Paris Charles de Gaulle. All three fly to Amsterdam. We serve these cities and if there is business, we have no objection to it.

My questions were not answered. I asked about the Cork to Dublin route.

Mr. Willie Walsh

I am aware that there has been a request regarding that route. I understand there has been some debate on a potential PSO service. The last service of which I am aware was operated by Ryanair in 2011. I do not think there has been any service since.

Aer Arann and Ryanair flew on the route, but the service has ceased.

Mr. Willie Walsh

From previous experience, I know that there is some demand, but it is principally from people connecting with services to Dublin, rather than from people who wish to fly from Cork to Dublin. The road network is very impressive and there is a rail service available. One would have to determine the level of demand from passengers connecting with services to Dublin. Given that Dublin Airport is developing more as a hub, it may be the case that there is justification for servicing the route, but I do not have figures to support this.

What will the figure of 1.3 customers for Aer Lingus look like in three years time?

Mr. Willie Walsh

I cannot give the Deputy an answer to that question. Every wide bodied aircraft added to the transatlantic fleet probably brings in the order of 150,000 to 160,000 passengers. The more wide bodied aircraft one adds to the transatlantic fleet, the more passengers one can carry. That is a rough rule of thumb.

I will allow one minute each to Deputies Timmy Dooley, Michael McNamara and Kieran O'Donnell.

I am trying to understand where we go from here and what the next move is. Mr. Walsh might expand on this.

Mr. Walsh mentioned having additional wide-bodied aeroplanes on transatlantic routes. Will all of them be located in Dublin? I am surprised that my Sinn Féin colleague did not ask about the plans for Dublin Airport. Mr. Walsh was very clear about them and, unfortunately, his plans for Shannon Airport. Will any takeover bid have an impact on connectivity between Heathrow Airport and Belfast?

Mr. Walsh referred to Shannon Airport, but I refer, in particular, to transatlantic routes which are very important to the mid-west in terms of business and tourism. As mentioned, the summer flights to Boston and New York are profitable. It is a year-round service. What commitment would Mr. Walsh give on operating year-round transatlantic flights from Shannon Airport?

My question was not answered. I asked about the potential to have a strategic alliance between the State and Mr. Walsh.

Mr. Willie Walsh

I was pleased to have my first opportunity to meet the Minister yesterday. He stressed all of the points I have heard made today. I have not heard anything that he did not raise with me yesterday. He pushed very hard on a commitment to operate services from Shannon and Cork airports. It is not the case that these issues were raised during this meeting only; the Minister pushed me hard on them. The points made have been reinforced by the committee and I am pleased to be able to respond. I hope this will be seen as a positive response to the issue of the Shannon to Heathrow and Cork to Heathrow slots.

The next move is really in the hands of the Minister and the panel that is investigating on his behalf, whom we met yesterday. They have sought some additional information from us. We will provide that as soon as we can. As I understand it, it will ultimately be for the panel to make a recommendation to the Minister, the Minister to make a recommendation to the Cabinet, the Cabinet to make a decision and then if it all flows through finally for the Minister for Finance to make a proposal to Dáil Éireann which would require a vote. So it is in the hands of the panel and the Minister. He would probably be able to give the committee much more clarity on that.

Normally if one can grow Dublin, one will grow Shannon as well on the transatlantic. What we have seen historically is that there is very strong demand from the US. It is not that there is not demand outbound from the west of Ireland, but there is very strong demand inbound. There is an Irish diaspora of 40 million to 50 million people, principally on the east coast. I see no reason for that not to continue and grow, particularly with the strength of American Airlines in that market, the brand presence it has-----

However, the concrete commitment is for four extra flights into Dublin rather than Shannon.

Mr. Willie Walsh

No, I did not give a concrete commitment for four extra flights.

Mr. Walsh said he hoped to. Is the hope to bring them into Dublin or Shannon?

Mr. Willie Walsh

I do not think I specifically said Dublin, but what I did say-----

He did not specify and that is why I am asking.

Mr. Willie Walsh

Let me provide some scope. I apologise, Chairman. What we have clearly seen is that Aer Lingus is seeking to develop a hub at Dublin. We support what Aer Lingus is trying to do in developing a hub at Dublin. That creates very significant value over just having a direct flight because, as I said earlier, one not only gets the value of the traffic that is fed in from a transatlantic point of view, one also gets the value of the additional services that are required to feed in. That is specifically for Dublin.

I am not for one minute suggesting our focus is only on Dublin; it is not. Aer Lingus has always had a strong presence in Shannon and in my view will always have a strong presence in Shannon because there is always a strong demand for transatlantic services into Shannon. We are in the business of providing capacity where demand exists. So we will continue to provide all the capacity that is required and hopefully more as we seek to develop Aer Lingus and grow its presence. That is not restricted to Dublin; it is in Ireland where we see Ireland being a growth market.

The four flights were into Dublin and Shannon-----

Mr. Willie Walsh

I did not say four flights.

On Shannon and the year-round flights, Mr. Walsh spoke specifically about the transatlantic.

Mr. Willie Walsh

What I said was there is always very strong demand and there is significant variation in the seasons. However, there is demand in the winter season as well, but it is not as strong.

Would Mr. Walsh be giving a commitment because we have such a large business sector depending on it?

Mr. Willie Walsh

I think what Aer Lingus has done is very sensible, where it has leased in Boeing 757s which have better capacity to serve that market. The 757 and in future probably something like the A321LR, an aircraft that Airbus is developing which has transatlantic range, to me looks like a-------

Is Mr. Walsh giving a commitment to maintaining a year-round transatlantic service out of Shannon?

Mr. Willie Walsh

I am not allowed to give commitments, other than the commitments that I have given. I am saying I see no reason Shannon cannot be developed, particularly with the development of new aircraft such as the A321LR, which I think will be a perfect transatlantic aircraft. We have already engaged with Airbus to understand what that aircraft can do and the potential for that aircraft.

Can Mr. Walsh envisage any situation whereby the large capacity that Shannon Airport has-----

Mr. Willie Walsh

No, I cannot. Other than Shannon-----

In terms of hubbing, in some regional flights for the transatlantic routes out of Shannon-----

Mr. Willie Walsh

The only thing that I think will restrict the development of Shannon Airport is if the management at Shannon Airport tries to do something silly like try to increase its charges and seek to derive excess profits, which I am sure it will not do given the very clear focus the new management team on board at Shannon has. I think it is a progressive airport looking for more business. It has been able to grow business. I would expect it to continue to do that. I would expect it to be very proactive-----

Can Mr. Walsh envisage-----

I am sorry, Deputy.

This is very important.

They are all important.

Can Mr. Walsh envisage any situation where IAG would be hubbing Shannon Airport to Dublin Airport for the transatlantic flights and we would lose our direct-----

Mr. Willie Walsh

No, I cannot.

That is a direct answer.

What about Belfast?

Mr. Willie Walsh

I am delighted to be serving Belfast. I made a personal commitment in my time at British Airways to do everything I could to restart BA services from Heathrow to Belfast. I honoured that commitment and will continue to honour that commitment because it is a great market for us and we get great traffic feed.

I would like to see the British Government build on what it has done with devolved APD because without question what is damaging Belfast is that the British Government has a very high passenger tax that the Irish Government has seen the sense to remove. The removal of that tax has been the source of significant growth in the Irish market. I am hopeful that the British Government will look to remove the air passenger tax in Northern Ireland as well because that is damaging the Northern Ireland economy and damaging the ability of Belfast to attract new business. We love serving Belfast; I know Aer Lingus does. We get great direct traffic and great feed out of Belfast as well.

I thank the Chairman for inviting me to attend this meeting. I want to explain something that I may not have done at the beginning. Because of takeover panel rules, I have been very restricted in what I can say. So I was not able to engage publicly and do media interviews, but the panel has been flexible in giving me the opportunity to do some press interviews and appear before the committee today, subject to my financial adviser making sure I did not do anything to breach the rules. I acknowledge that the panel has done that. I equally thank the Chairman and members of the committee for giving me the opportunity to outline what I think is a fantastic opportunity for Aer Lingus as part of the International Airlines Group.

On behalf of the committee I thank Mr. Walsh and Mr. Griffin for attending today, and for engaging with us and answering the questions in an upfront manner. Mr. Walsh's contributions have obviously brought a different perspective on what we have heard in previous meetings. However, as I said at the beginning of the meeting, there as a need for the information Mr. Walsh has provided today. Obviously this will feed into the decision that will be made. It was of great interest to the committee, the Government and the people of Ireland.

As a result of today's deliberations and the previous ones, the one piece that is missing is the voice of Aer Lingus.

We will discuss that.

It might be suitable for the committee to invite in Mr. Mueller just to have a conversation about some of the issues we have discussed today.

We will discuss that in private.

The joint committee adjourned at 4.28 p.m. until 5 p.m. on Tuesday, 17 February 2015.
Barr
Roinn