Govt battles to aid state airline

The Government will step up pressure tomorrow for European permission to aid their troubled Aer Lingus airline.

Public Enterprise Minister Mary O’Rourke is fighting for the right to provide financial assistance for the national carrier - now losing £2m a day following the September 11 terrorist attacks on America - at a meeting of the European Union Transport Council in Luxembourg.

The minister was briefed on the crisis confronting Aer Lingus today by recently-appointed chairman Tom Mulcahy, amid reports that the previously-reported job cuts target of 2,500 - representing nearly 40% of the workforce - might have to be exceeded.

Mrs O’Rourke pledged last week that every effort would be made to break down EU resistance to exchequer cash being handed to Europe’s currently-struggling airlines.

There were indications tonight that the European Commission was not prepared to relax its stand on the issue, on the grounds that it would be irresponsible to bail out the air companies.

But Irish and other EU ministers were set to cite America’s decision to provide billions of dollars-worth of help for their airlines and demand equal treatment.

And tonight Mrs O’Rourke was urged to stand by the national airline at what was described as "the most important meeting ever at EU level as far as Aer Lingus and its workers are concerned".

Labour Party MEP Proinsias de Rossa said: "The meeting has the power to literally decide whether Aer Lingus continues as Ireland’s national airline, and whether the jobs of thousands of its workers will be protected.

"The government must negotiate a relaxation of EU guidelines on state aid in the aviation sector in order to allow Aer Lingus to respond to the events of September 11."

Plans for additional state funding for Aer Lingus are also being opposed by Ryanair, whose business has barely been affected by the American-based terrorism.

Michael Noonan, leader of Fine Gael, tonight called for Aer Lingus to be divided into two companies responsible for the separate operation of transatlantic and other services.

The company announced earlier this month that services would be cut by 25% - principally on routes to the United States following a huge drop in bookings since the attacks on New York and Washington.