Shane Ross

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Discounting the National Airline

Posted on: March 3rd, 2004

The Aer Lingus Bill was recently introduced in the Seanad. Obviously the main thrust of the Bill is the privatisation of Aer Lingus. There is a reluctance to spell that out in such brutal terms in the Minister’s speech, but I welcome the fact that Aer Lingus should be privatised.

However, I have difficulties with the Minister of State’s statement that he is aware of concerns about strategic issues in the context of the State exiting from ownership of Aer Lingus. These concerns relate to the Aer Lingus brand, slots at Heathrow, and the commitment of any new owners of Aer Lingus to regional development in Ireland.

If the Minister of State sends out those signals while trying to sell Aer Lingus, the Government will find it difficult to get a decent price for the company. If the Government is telling prospective buyers they must fly into Cork, Shannon and other airports, few will be interested. These issues of strategic interest will put off buyers.

Regional development is a broad ship, which means the airline will have to fly to places designated by the Government. The government will find it difficult to get competing buyers or get value if it does that. It will find that it is selling Aer Lingus at a discount because other airlines will not have demanded such stringent conditions on the sale.