Aer Lingus: Sell or bust

by Iolar Fri Oct 10, 2003 04:22

They were never anything but a ripoff, another bloated, incompetent, inefficient state-controlled drain on taxpayer money.

The days of these monolithic union-riddled organisations and not before time, all thanks to Ryanair and the other lo-cost airlines.

by SeaninWatcher - Seaninistas Fri Oct 10, 2003 10:28

Seanin AKA Dairius McGann of Drogheda, Take a bow!

by SF Fri Oct 10, 2003 12:16

Speech from Sinn Féin's Seán Crowe opposing needless and foolish privatisation of Aer Lingus in Leinster House yesterday. In contrast to the claims of the first posting, since 1999 Aer Lingus has steadily increased passenger numbers with the exception of 2001. It now has a passenger load factor of 80%, made a substantial profit last year and is on course to make an even bigger one this year. Far from profit peaking in 2002, first half of 2003 results show increased profit compared to the same period for the year before.

By 2005 it will have opened up 15 new routes. As I am not as eloquent as Comrade Crowe I will content myself with merely pointing out that the first posting on this thread is full of shit.




I want to make clear at the outset that while Sinn Féin will be opposing this legislation, we are not doing so because we disagree with workers owning 14.9% of the company. If that was the only purpose of the legislation before us today, we would be delighted to support it though disappointed that the Government saw fit to reward the sacrifices and hard work of Aer Lingus employees with such a relatively small share of the company they have done so much over the years to build.

Regrettably however, the Minister has put two separate and distinct issues in the same piece of legislation. One is the Employee Share Ownership Plan (ESOP) agreed by the Government and the Aer Lingus Group of Unions and dealt with primarily in Section 7 of the Bill. The other is what can only be described as the Government’s enabling blueprint for achieving its long held objective of privatising our national airline.

As much as I would like to support the ESOP deal we must reject the Bill as it currently stands and support the motion put by Deputy Shortall. Sinn Féin remains adamantly opposed to the privatisation of Aer Lingus. This company has been built up over decades to become one of the cornerstones of the Irish economy, a company that has earned international respect for itself and for Ireland. It was founded at a time when the private sector had neither the will nor the capacity nor the courage to build such a vital strategic infrastructure. It was built up in difficult times and when it prospered it repaid the investment. It is an Irish company and should remain an Irish company.

For the last few years Aer Lingus has been under sustained attack by the kind of negative thinking that now seems to sadly dominant this Government at Cabinet level. This drive for privatisation is not motivated by concern for the workers or customers of Aer Lingus. It is another example of the blinkered viewpoint that wants to break up CIE and Aer Rianta and part privatise Dublin Bus. Opposition to public ownership of any kind now seems to be a core principle of this Government, regardless of the economic and social consequences of such actions.

A short number of years ago, economic commentators were circling Aer Lingus like vultures, predicting its imminent demise in the aftermath of the foot and mouth crisis and September 11th. Their only real concern was whether the Government would be able to get a good price for it particularly if the company was sold at rock bottom fire sale levels. We were told its collapse was inevitable, it had to be sold.

Those economic gurus didn’t of course worry about the thousands of Aer Lingus workers who stood to lose their jobs, the consequent loss of revenue in our airports or with the implications that this action would have for airport employees and the wider community in the hinterland of these airports.

Like this Government, they were concerned only with profit and what they could make out of the airline. They were ready to abandon an airline it took 70 years to build up because of one particularly disastrous bad year for airline companies.

In a short space of time it is astonishing to see just how big a turn around has been accomplished in Aer Lingus as a result of the hard work, determination and sacrifices made by its workforce. The company made a loss of €139.9 million in 2001. A year later it had been turned right around to a profit of €35.3 million in 2002. Not only has Aer Lingus survived, it is thriving, about to acquire 17 new planes for short haul routes, purchasing seven of them outright at a cost of €300 million. This will mean, if the deal is approved, 15 new routes by Summer 2005, bringing to 30 the number of new routes opened since the end of 2001.

The most recent results, for the first half of 2003 point to an operating profit of €14.3 million for the first six months against an operating loss of €12.6 million for the same period last year and passenger numbers are up since 2001. How do the stereotypes of lazy, inefficient public sector workers propagated by right wing elements in the media and Government match the reality of successful companies like Aer Lingus, and others in the public transport arena for that matter?

The Employee Share Option Plan is supposed to be the Government’s reward for the accomplishments of the men and women employed in Aer Lingus. It is little enough of a reward for such achievements. Costs have been cut by 20%; a couple of thousand workers are gone. Hard choices were taken, huge sacrifices were made. It is a pity the Government could not bring itself to properly recognise that.

There is a clear danger that if this legislation is passed the Government will use it to further its privatization agenda. That could mean the break-up of the company, the loss of thousands of jobs and the destruction of a strategic pillar of the Irish economy. Instead of being a gateway to Europe and a bridge to North America this country could become a backwater in aviation. It must not be allowed to happen.

Sections Three and Five of the Bill before us gives the Minister for Finance the power to dispose of her or her shares at any time, to sell the State’s shareholding in Aer Lingus. It is made clear that the money received in respect of any such sale will be paid into and disposed of by the Exchequer. I can’t help but wonder if this Government got its hands on that amount of money just how big a tax break would they give to big business and their wealthy friends because there is certainly little chance of it being used for public services.

Although Minister Brennan has told the Cabinet he has no plans to sell the company in the immediate short-term during the aviation downturn, this Bill leaves the way open to the likely sale in the future and has been deliberately crafted to do so. The Government remains committed to selling off this company without any regard for the disastrous long-term implications of the sale of a national strategic asset. It is nothing more than an act of ideological vandalism. What kind of short-sighted thinking argues that Aer Lingus and the Irish people to whom it belongs would be better off if the company passed into the hands of a world airline whose aim was profit and cost cutting rather than the development of Ireland?

We have seen already it in Irish Shipping, in Eircom and it is now threatening in the ESB. The lack of investment in infrastructure, the selling off and stripping of a vital national resource. Aer Lingus needs to stay in public ownership.

We need only look to the Eircom debacle to see the effects ideological privatisation can have. The company made a profit in 2003 of €357 million and paid Valentia over half a billion Euros. At the same time, Ireland is crying out for investment in broadband access. Belgium has over 48 times the broadband penetration of this state. According to the World Economic Forum we are 51st out of 82 countries in terms of broadband access behind the economic powerhouses of Guatemala and Botswana.

But instead of a state owned telecommunications company investing in broadband, we have Eircom paying hundreds of millions of Euros in profit to Valentia. The Government made a big mistake then and it seems set on making a similar mistake with Aer Lingus

It is a dangerous thing for the state to lose control over key elements of its infrastructure such as transport and telecommunications, especially to foreign companies whose only concern is their balance sheet rather than our national interest. These are dangerous times indeed and there are few Ministers more dangerous to the infrastructure of this State than the Minister for Transport with his daft plan to break up Aer Rianta, to privatise parts of the public transport system and break up CIE.

Currently trade agreements between the US and this state protect Aer Lingus from being majority owned by a foreign airline. So while a company like British Airways might not be able to buy Aer Lingus outright for the moment, if this legislation is passed the Minister could sell 49% of the company to BA, or to any other airline or investor looking for a quick profit.

Such investors will take a short-term view, the biggest profit in the shortest space of time. Are these the people Minister Brennan thinks should be running a national airline? If we sell it to another airline, then if that airline should encounter difficulties they would run Aer Lingus and any other subsidiary companies down rather than their core services and routes.

In such a circumstance we could see our national carrier reduced to the level of a feeder service while London becomes the hub of international transatlantic flights for Irish people. In short, we would have Aer Lingus run in the interests of a foreign company and not in the interests of the Irish people. And if the company remained in the hands of Irish investors, what difference would it make? We would have a company possibly purchased by a cabal of Irish tax exiles of the sort who always take such an interest in privatisation schemes. The company would be run solely for profit, theirs rather than in the strategic best interests of our island nation.

This Government wants to flog off Aer Lingus to raise money because they haven’t the guts to raise money in the normal way, by putting in place a tax system that would take the crushing burden of funding this state off the ordinary PAYE worker and put it on the companies and people who have profited off the backs of workers for decades.

I would ask the Minister to withdraw the elements of this legislation dealing with anything other than the employee share plan. Let us debate that plan on its merits, which are dubious enough considering the miserly proportion of the company the Government is willing to transfer to the employees who have done so much to turn the company around in such a short space of time. The Trade Unions and workers of Aer Lingus might have agreed to the share deal, but they certainly did not agree to the privatisation of the company.

For almost 70 years Aer Lingus has represented the Irish people in cities and countries around the world. It has made, and continues to make a massive contribution to our image abroad as an extremely valuable brand associated with Ireland. The contribution of the company to the development of tourism for example has been enormous.

For decade’s economic conditions forces hundreds of thousands of our young people to leave Ireland, creating a Diaspora that stretches right across the world. Aer Lingus has been vital in keeping our far-flung families in touch with each other. Every Christmas you can expect to see at least one RTE reporter out in Dublin Airport interviewing people coming home for Christmas from England, America, Australia and elsewhere. It is worth noting that less than a week ago Aer Lingus celebrated 45 years of service to Boston in the United States from Ireland. Through good times and through bad, through planes full of Irish people escaping the economic chaos many of the parties here helped create to planes full of investors and returning emigrants in recent years, Aer Lingus has faithfully served the Irish people.

It does not need to be privatised. It does not need third party involvement. Sinn Fein’s message to any Government planning to sell off the company, whether through an IPO, a trade sale or some other method is simple. Hands off. Aer Lingus belongs to the people of Ireland and this Government should think long and hard before betraying the people and selling off a vital national asset. Consequently we will be opposing this Bill and supporting the Labour party amendment.

by Degenerate Fri Oct 10, 2003 17:37

What's the story lads, I have to pay to see what ye are saying.
Since when was it SF/PLC?

by Janus Fri Oct 10, 2003 18:23

SF have FINALLY taken control of the internet distribution of An Phoblacht. The old site www.irlnet.com/aprn should be avoided. The new site at www.anphoblacht.com is both free and the official site of the paper.

by Degenerate Fri Oct 10, 2003 18:34

Thanks for the info.