Aer Lingus plan a recipe for disaster, says Walsh

GOVERNMENT policy to retain a 25% stake in Aer Lingus is a recipe for disaster, the company’s former chief executive Willie Walsh warned yesterday.

Mr Walsh, who is chief executive of British Airways, said: “A government owning a stake in an airline in which it is either unwilling or unable to invest is a recipe for disaster.”

Mr Walsh made the remarks when taking questions from the floor after addressing the Chambers of Commerce of Ireland (CCI) National Business Forum 2005 in the Rochestown Park Hotel, Cork.

In his main address, Mr Walsh said he was pleased that the Government had taken a decision which could result in essential cash being pumped into the airline to enable it to upgrade its fleet by buying new aircraft.

But he warned: “The Government’s retention of a 25% stake will do little to encourage investment interest in a State airline.”

The Irish Examiner understands that British Airways is not interested in taking a stake in Aer Lingus.

Mr Walsh also rejected Transport Minister Martin Cullen’s assertion that the proposed second terminal at Dublin Airport, which will operate in competition with the existing terminal, be run by the Dublin Airport Authority.

“It is critical that the new terminal is developed. There is a severe lack of capacity at Dublin Airport,” he said.

Mr Walsh said that competing terminals would be better for Dublin Airport.

“I believe competing terminals will work,” he added. “They work in the US and will help to keep costs down.”

Meanwhile, Government claims that the identity of Aer Lingus and crucial assets such as Heathrow landing slots could be preserved through the retention of a 25% “golden share” were yesterday dismissed as “fantasy” by Labour transport spokeswoman Róisín Shortall.

“The bottom line is that once a majority shareholding in the company is ceded to private interests the majority say in the decision-making process is handed over also,” she said.

“In fact, the European Court of Justice has rejected as illegal the ownership of a minority golden share that would protect strategic interests.”

Ms Shortall called on Fianna Fáil backbenchers to resist the privatisation plan.