Confusion over Ahern's knowledge of airline deal

TAOISEACH Bertie Ahern and new Transport Minister Martin Cullen face embarrassing questions this morning as a gaping communications gaffe emerged at the heart of Government.

As he jetted off to Vietnam last night, Mr Ahern left behind considerable confusion over whether he had been told a proposed management buyout at Aer Lingus had been withdrawn days before.

Although Aer Lingus chief executive Willie Walsh told Department of Transport secretary general Julie O'Neill on Monday he no longer wished to seek consent from the Government to develop an investment plan for Aer Lingus, it appears the Taoiseach was never informed of the decision.

Despite addressing the issue of Aer Lingus on Tuesday and Wednesday when questioned in the Dáil, Mr Ahern made no mention of the management proposal being scrapped.

Instead he displayed no knowledge of the development, telling the Dáil he did not favour a management buyout.

"I do not believe that it is appropriate for a management buyout in the situation of Aer Lingus. I do not think that is appropriate. I do not think that is a solution," he said.

When separate concerns were raised about the buyout by Dublin North Central TD Sean Haughey during Fianna Fail's weekly parliamentary party meeting on Tuesday night, Mr Ahern also failed to mention any such development.

Socialist Party TD Joe Higgins, who raised the issue in the Dáil yesterday, queried Mr Ahern's apparent lack of knowledge.

"If he did know why wasn't he more forthcoming? And if he didn't know the question has to be asked why he didn't know?" he said.

The latest twist in the fate of the national airline only emerged late yesterday afternoon when Mr Walsh told the Oireachtas Transport Committee of Monday's communication with the Department of Transport.

Spokesmen for the Taoiseach and Mr Cullen separately declined to comment on whether Mr Ahern had been made aware of the development.

However, it is understood Mr Cullen, who was informed of Monday's development, did not speak directly to the Taoiseach on the matter.

Although the future of Aer Lingus - which is seeking 1,300 redundancies by October 15 - is one of the Government's most pressing transport issues, Tuesday's Cabinet meeting did not address the issue.

A Cabinet sub-committee will reach a final decision on funding the airline after it receives a Goldman Sachs report, due shortly.

Amid speculation the management decision came about as a result of last week's reshuffle, Mr Walsh stressed the decision had nothing to do with Seamus Brennan's departure.

However management is anxious the Government moves quickly.

"We require clarity on the issue of our ability to access capital going forward," said Mr Walsh.

Chief financial officer Brian Dunne warned the company, which needs medium-term investment of more than e1bn, could not afford "to wait around until we run out of cash."