Aer Lingus managers set to back sale of airline next year

AER LINGUS managers have come out in favour of selling the State airline next year.

The long-running debate on the future of Aer Lingus will come to a head next month when chief executive Willie Walsh and chairman Tom Mulcahy meet with Transport Minister Seamus Brennan.

Both are expected to recommend the sale of Aer Lingus to an institutional investor early next year.

The State-owned company has recovered from a near meltdown since the events of September 11, 2001, and is expected to achieve profits of €75 million this year, compared to a €52m loss in 2001.

Although Mr Brennan is in favour of privatising Aer Lingus, the Cabinet has not yet approved his plans. The option of floating the company on the stock market is unlikely to be used.

A previous attempt at floating Aer Lingus on the stock market was abandoned by Public Enterprise Minister Mary O’Rourke two years ago after the airlines fortunes declined dramatically.

A sale to institutional investors would avoid the flotation problems and could raise between €300m and €500m for the Government.

Finance Minister Charlie McCreevy is in favour of privatising the airline and although the sale would not come in time for his December budget, it would shore up the 2004 exchequer figures. SIPTU, which represents 3,000 catering, ground handling, catering and some cabin staff at Aer Lingus, has warned against any sale of the airline for short-term gain.

“It has been proven that Aer Lingus are quite capable of competing and I think they should be allowed to do that without any preemptive change. Our preference is that it would remain in state ownership,” general president Des Geraghty said.

However, the opposition of the unions may be assuaged by a bill being brought to the Dáil this autumn by Mr Brennan.

It will give Aer Lingus employees a €14.9% stake in the company. The bill will also allow the Government to sell its shares in the company.

The Department of Transport said privatisation would allow the company to raise more funds for investment.

“Aer Lingus is the national airline and if it could stay in state ownership it would. But the Government cannot put any more money into it under EU legislation.

“If Aer Lingus want to expand, they’re going to have to find investment somewhere,” a department spokesman said.