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Taoiseach should call a halt to sale of Aer Lingus

It’s still not too late for the Taoiseach to intervene in the proposed sale of Aer Lingus, according to SIPTU National Industrial Secretary, Michael Halpenny.

 “This is a bad value proposition and a bad call,” said Mr. Halpenny.  “It will do nothing for the employees, the customer or the tax payer.

“Even supporters of privatisation would have to concede that market conditions in the aviation industry are particularly difficult at this time – if your intention is to secure the best possible price for the taxpayer.  The cost of aviation fuel is extremely volatile.  The industry is also suffering from the heightened security situation world wide and the Open Skies agreement - which would give Aer Lingus greater access to airports in the United States - is still unresolved and looks like it won’t be finalised until next year.  Moreover there appears to be still unresolved pension issues with employees of SR Techniques (formerly TEAM Aer Lingus), arising from their previous service with the national airline.  In summary, there could hardly be a worse time for such an ill-conceived plan.

“There is so much uncertainty in the industry at present, that the responsible course for the Government to take is to call a halt to this process and reappraise the whole project.

“SIPTU has campaigned against the privatisation of Aer Lingus on the grounds that it would not be in the best interests for our members, customers or tax payer.

“But the ultimate responsibility for decisions on the future ownership of the company clearly lies with its largest shareholder - the Government.

“This is bad value proposition.  According to the most optimistic forecast, the tax payer will get only around €300 million - €400 million.

“Aer Lingus itself will not receive a cent directly from the flotation.  In fact, for Aer Lingus to get the necessary funding to expand its fleet they will have to issue new shares, post the flotation.  Even then, the money they plan to raise through the issuing of new shares will only yield approximately a quarter of the total investment needed.

“SIPTU has done everything it can to protect its members’ terms and conditions.  Local Authorities up and down the country have passed motions saying they are opposed to the flotation.  Ultimately, the decision is a political one which now appears to be being forced through, regardless of even the most obvious market and commercial considerations.  Essentially the national airline will be given away for a song and the electorate will no doubt remember who made that decision when the time comes,” he said.