Airline is de facto for sale but who’s buying?

AER Lingus is in play. Whether the Government likes it or not the ‘for sale’ sign has been firmly hoisted.

For once, the master of prognostication, Transport Minister Seamus Brennan, has been forced into making a decision.

In this case even by not making a decision he will be making a decision.

Round one has gone to Aer Lingus chief executive Willie Walsh, chief financial officer Brian Dunne and chief operations officer Seamus Kearney, who have asked the minister if they can buy the airline. And they want an answer fast.

It can be taken as read that Aer Lingus is for sale; all that has to be decided is who will buy it.

The Aer Lingus three have adopted a bold course and while it was business as usual at the airline yesterday with all three at their desks, they could have their wings clipped shortly.

Mr Brennan and the Government will not be hurried into making a decision but they will have to decide what to do with messrs Walsh, Dunne and Kearney.

Should they be asked to step aside until a decision is made on their request and if they get a yes to make a bid, should they be asked to step down altogether? It is clear that chief executive Willie Walsh is a man in a hurry.

The 42-year-old former pilot has for a long time wanted to know where he is going and the minister is the man to tell him.

Some observers regard the move by the three at the top of Aer Lingus as a ploy designed to get the minister and the Government to, stop beating around the bush and privatise the company.

Last night Labour party TD for Dublin North Sean Ryan said the request was: "Nothing more than a kite-flying exercise to pressure the Government into privatising the national airline."

Others like Davy Stockbroker's aviation analyst Stephen Furlong has no doubts Aer Lingus should be in the private sector, so it can access capital in whatever form to fund its growth.

"Nearly all European airlines have already been privatised. This year the French government is looking to further reduce its shareholding from 44% to below 20%.

"Aer Lingus 2003 results delivered operating margins of 9.3%. While well below the industry leader, Ryanair (25.2%), that was still above that of any other European airline, including easyJet.

So why does Aer Lingus have to be in the TAP Air Portugal/Olympic Airways club the dregs of European aviation state ownership?" he argued in a note to clients. The legislation has been passed all that is required is the nod from the Government to give it the go ahead.

But unions have reacted angrily to the "opportunistic" proposal. SIPTU, which represents over 2,000 of Aer Lingus's 4,100 employees, held the first of a series of meetings in Dublin last night to voice its opposition to the sale.

Employees fear up to 1,800 job losses and feel an airline in private hands would find it easier to force through cuts that politicians would shy away from.

Over 3,000 jobs have already gone since the airline put in place a last-gasp programme to survive in the wake of September 11, 2001 and the union says employees have suffered enough.

SIPTU national industrial secretary Mick Halpenny said the Walsh team's proposals had a price tag of further job cuts, which he said was "not a very appealing prospect" given that the airline stood to make profits of up to €90 million this year.