Aer Lingus urged to pay the State

Transport Minister Leo Varadkar has called on Aer Lingus to pay a dividend to the taxpayer for the first time in decades.

Aer Lingus has not paid a dividend to the Government in over 20 years. The Department of Transport has confirmed the last Aer Lingus dividend received by Government was £500,000 in 1991.

The airline’s accounts show its cash balance at the end of 2011 stood at €894.8m after recording pre-tax profits of €84.4m last year.

On Friday, Aer Lingus revealed in its annual report that its chief executive, Christoph Müller received pay and shares worth €1,569,000 last year — more than three times his basic pay of €475,000.

The Government has a 25% shareholding in the airline and Mr Varadkar said: “The fact that the company is making a profit, doing well and its CEO is well paid really emphasises the point that Aer Lingus should now be in a position to pay a dividend to the taxpayer given that it is so successful.

“If the company is making a profit, it can afford to pay its CEO very well and if that is the case, it can afford to pay a dividend to the taxpayer.”

Asked what level of dividend payout the Government would like to see, Mr Varadkar said as the State had representatives on the board of Aer Lingus it would be inappropriate of him to discuss figures.

“The standard figure being used for state companies is 30% of the profits. In Aer Lingus, the situation may be different and we aren’t the full owners of Aer Lingus. We only own 25%.”

On Mr Müller’s salary, Mr Varadkar said: “The salary is a high one, but Mr Müller has done an excellent job and is someone who has turned the company around from a loss-making position to one that is very profitable.

“It is a salary that is earned in the way perhaps that some of the bankers’ salaries have not been.”

At a Shannon Chamber of Commerce event, the minister said that under Mr Müller Aer Lingus was “very successful and ... the biggest airline flying in and out of Ireland once again”.

He said a decision on Mr Müller’s salary was not for Government as the airline was 75% privately owned.

Fianna Fáil transport spokesman Timmy Dooley said he would prefer Aer Lingus to re-invest its cash in developing new routes: “Aer Lingus has a reasonable cash balance at the moment, but that is no reason to start stripping it out of cash.

“I would take the opposite view to the minister. Instead of paying a dividend, the airline should re-invest its cash to develop business and develop routes.”

Aer Lingus refused to comment.