Finally, it looks like Hamlet has appeared on the stage in the Government’s saga over the sale of its 25% stake in Aer Lingus. Access to and from this little island of ours on the periphery of Europe is of critical importance, not only from a personal and a tourism perspective, but even more importantly, from a wider economic one.
As a small open economy a major focus is on the export of goods and services to Europe and the rest of the world. Without quick and regular access to our markets our work would be even more difficult than it already is in what is becoming an increasingly competitive world.
For those of you not up to speed on this critical issue, the story is that the International Airlines Group (IAG) made an offer to buy Aer Lingus some months ago for around €1.36bn, for the company and all of its assets, which include highly valuable slots in Heathrow Airport.
IAG is the parent company of British Airways and Iberia. The Government stands to gain a large chunk of change, should the deal go ahead. This would certainly come in handy to allow the Coalition to handout candies to the electorate on the road to an election which is just around the corner.
But selling off even partly-owned state assets is not as simple as just signing on the dotted line and collecting the cash. There are a lot of different and difficult considerations.
The headquarters of Aer Lingus is in north Co Dublin and many of Aer Lingus’, and indeed airport operator DAA’s, employees live close by which means there is the possibility of a huge block vote that needs to be kept on side.
The unions have their own perspective on the sale. Initially, some were supportive but as time moved on that support lessened. Some of these changes undoubtedly arose from the fact some unions projected a loss of members, subscriptions and therefore influence. Others stood to gain new members if you believe the IAG sales pitch.
There are also other issues such as the real value of the Heathrow slots and whether the amount being paid for them is enough.
Another issue is whether the IAG commitment (as distinct from electoral promises) of maintaining Irish flights for five or seven years is enough.
The news on this proposed sale in recent days has been that the report is nearly ready and the minister will make his views known to the Cabinet as soon as he studies the report. The smart money is on there being an agreement to sell the shares.
However, the Government has only a 25% shareholding. The other two main shareholders are an employees’ trust and the single largest shareholder, Ryanair with 29.8% of shares. Where have they been up to now?
Intriguingly, only now is Ryanair’s shareholding being discussed.
Indeed, Ryanair did not, as far as I am aware, talk about its intentions on its shareholding, given that IAG wants the whole company lock, stock and barrel— slots included, of course. It was a little like Hamlet without the prince.
Was Ryanair waiting in the wings hoping that it could get a better price from IAG or was it going to hold out? In any event, the UK Competitions and Markets Authority has decided to uphold its earlier ruling that Ryanair must reduce its share in Aer Lingus as the CMA alleges that its shareholding stymies competition and puts off possible bidders. IAG’s interest would suggest the opposite.
IAG jumped into the fray the other day to state that it had bid only on the basis that Ryanair was being forced to sell its shares. In doing so it joined the chorus with Transport Minister Paschal Donohoe and Aer Lingus. These are strange bed fellows.
Perhaps now that a sale decision is close, it will put an end to an unseemly situation where Irish authorities appeared to be supporting the undermining of an Irish company by a foreign government’s regulatory authority.
Enmity towards a company or an individual should not trump our national interest.