Of Armageddon, Willie Walsh and the airport mess

TO lose one chief executive of Aer Lingus may be regarded as a misfortune; to lose both looks like callousness.

With apologies to Oscar Wilde, that’s what the Government fears most when it comes to the Shannon Airport mess.

When Willie O’Dea spoke about Armageddon it was about the loss of the Heathrow slots to the mid-west. When the Government thinks of Armageddon, it is a scenario involving Dermot Mannion and his top management team walking after being compromised by the Government at an EGM.

Bertie Ahern’s view of Mr Mannion’s predecessor, Willie Walsh, was jaundiced. It was prompted by what he regarded as Mr Walsh’s audacious cheek at proposing a management buyout. It got so bad that if Mr Walsh said he was going for a walk, Mr Ahern would have gone out of his way to ensure it was along the length of a plank. Six months later — by which time Mr Walsh had been forced out and had gone to British Airways — you could see that the Anorak was still all ripped up about it.

When Pat Rabbitte asked Mr Ahern in the Dáil was he going to give the go-ahead to privatise the airline, the Taoiseach rounded on him, and — by proxy — Mr Walsh.

“I am surprised Deputy Rabbitte is taking up a position that was opposed by every trade unionist in Aer Lingus, when management wanted to steal the assets for themselves through a management buyout, shafting staff interests. Deputy Rabbitte is now defending that position.”

And a little later, he added as an afterthought.

“I am glad those individuals (Willie Walsh and co) went on to prove their worth in the financial marketplace but at least they did not do it by taking the assets away from Aer Lingus.”

Stirring stuff from Red Bertie the Socialist comrade. We were all able to sleep easy in our beds that night. The assets were protected.

And then a year later, Aer Lingus was floated. Or about 60% of it was. The employees got about 12% through another Employee Share Ownership Trust (ESOT). And the State kept 25.4% which Martin Cullen, the then Transport Minister, told us was a ‘golden share’.

So we still didn’t need to worry about losing the assets. I won’t bore you with the details of the tome Mr Cullen produced last October detailing how that magic 25.4% would protect Aer Lingus’s assets. And Mr Cullen spelled out what those assets were: they were primarily the Heathrow slots and the services from Dublin, Cork and Shannon.

So what was the difference between Mr Walsh stealing the assets and the Government floating the airline on the private market while retaining a 25.4% ‘golden share’?

None really. Except we got loads of bluster and self-serving bombast from Government when it went down the second avenue.

The golden share! What an abominable business cliché. If Mr Cullen had read his Shakespeare he would have known enough about things that glisten not to mention golden shares.

We learned, when it was sprung on us at the start of August, that pulling the Shannon to Heathrow service was against the Government’s regional and aviation policy and was a disappointment. Though Mr Cullen never told us back in October, the Government knew back then that there was damn all it could do about it.

What’s more if Aer Lingus decided to transfer all the Heathrow slots out of Ireland, Bertie the Bystander would live up to his name. He couldn’t do anything about it. And what’s worse, there would be no Mr Walsh to blame.

The Minister for Finance as the nominated Government shareholder could only call an EGM if Aer Lingus ‘disposed of’ (ie sold) the slots rather than transfer them. What’s more, it got advice this week from the Attorney General Paul Gallagher that even if a majority of shareholders ordered management to reverse the decision on Shannon, the service could not be saved at this stage.

Transport Minister Noel Dempsey arrived into his ministry just in time to see that plane take off from the runway. Asked this week about the purpose of the ‘golden share’ he replied that it could help repel a hostile takeover (as happened when Ryanair began huffing and puffing) and would also help prevent the disposal of Heathrow slots.

However, he admitted that down the line all of the Irish slots could be transferred to Dusseldorf or Taipei or Abu Dhabi. He made the fair point that this was highly unlikely. But the point is that, politically, it makes a mockery of the Government’s stern prose from last autumn. It was selling us a pig in a poke back then. And what was worse — it knew it.

The following is wild and groundless speculation on my part. But one of the reasons I believe the Government will back Mr Mannion to the hilt is that otherwise Mr Ahern will be forced to back an aviation boss he dislikes even more intensely than Mr Walsh.