Airport protests - Yet another blow to Aer Lingus sale

HAVING dithered over the privatisation of the national airline, yesterday’s Government decision to sell off Aer Lingus could hardly have been more ill-timed.

Hours before Transport Minister Martin Cullen finally gave the green light for the airline to be sold off, 1,500 passengers suffered the frustrating ordeal of being grounded at Dublin airport as SIPTU workers staged a protest meeting over the job security and pension implications of the proposed sale.

Flights in and out of Dublin, Cork and Shannon airports were directly hit by the 75-minute work stoppage but many more were delayed as a result. Thankfully, flights were back to normal by the afternoon, but there is no denying the airline’s image has been damaged once more and further industrial action is threatened.

Uncertainty over the airline’s future has resulted from Government fears of a worker backlash in next year’s general election. With many staff living in Taoiseach Bertie Ahern’s bailiwick, and with several Fianna Fáil seats on Dublin’s Northside looking decidedly shaky, cynical political interests came before the airline’s future.

Indeed, the air of uncertainty persisted yesterday as the Dáil heard claims that Mr Cullen had tabled a flawed motion amid calls that it be withdrawn. A flaw in the wording of the motion, according to Fine Gael’s Olivia Mitchell, jeopardised the sale of the airline, which could face legal challenge.

While Mr Cullen claimed he had legal advice that the motion was lawful, confidence in the Coalition’s handling of the Aer Lingus affair has been dented. Following the e-voting debacle, Mr Cullen will find it hard to convince members of the public to buy Aer Lingus shares when they are floated in the autumn on the Irish and British stock exchanges.

Given the Eircom experience, punters will be slow to put up the minimum €10,000 required for shares. While the State will retain at least 25.1% of the shares in the company, its control over the company will probably be forfeit.

In common with other airlines, Aer Lingus hit financial turbulence following the September 11 attacks in the United States. At one point the airline was losing €2 million a day. Painful surgery saw 2,500 redundancies from 6,300 staff.

Government handling of the State company leaves much to be desired. After rejecting a management buyout led by former chief executive Willie Walsh — now British Airways chief — the Taoiseach was forced to apologise after accusing him of attempting to “steal” the company’s assets.

The Coalition’s prevarication on the future of Cork and Shannon airports has been equally shoddy.

Both airports face severe financial difficulties because the Government reneged on its promise that Dublin airport would pick up their combined debts and they would start independently debt-free.

Under a deal offered by new chief executive Dermot Mannion, Aer Lingus staff stand to gain a 3% pay rise, a lump sum of €4,400, plus a 7.5% profit-sharing scheme from the flotation. Given the political realities, the Coalition is unlikely to reject the sweetener package. Arguably, the privatisation of Aer Lingus is the only way to guarantee its long term survival. However, the Government’s undue delay in deciding its future has already proved costly as soaring oil prices could now be the biggest stumbling block to a successful flotation. Key issues yet to be resolved include bridging the staff pensions deficit and protecting the company’s valuable slots at Heathrow airport.

Unfortunately, in the eyes of beleaguered air travellers and investors, considerable damage has been inflicted on the airline’s brand image by yesterday’s shambles at Dublin Airport.