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Political Interference is Causing the Problems at Aer Lingus

Posted on: December 2nd, 2004

I sometimes wonder whether Aer Lingus is in crisis. For a company that is earning more than €100 million per year and with prospective earnings of similar amounts next year, it is difficult to paint it as being in a critical situation. Financially, it is not in a critical situation. The crisis is of a different type, which could provoke a financial crisis quickly.

I am not talking about the global aviation sector, to which several speakers have referred. I refer to the extraordinary propensity of employees, from top to bottom, to want to get out of Aer Lingus. Senator Dooley referred to the great strength, ability and talent of Mr. John Sharman, the acting chairman of Aer Lingus. Such a description is undoubtedly correct. However, Mr. Sharman does not want to stay in Aer Lingus. He wants out very quickly. Moreover, successive Ministers have been unable to find any suitable replacement for Mr. Sharman. According to reliable reports, Mr. Pat Molloy has turned down the post, as have Mr. Niall Fitzgerald and several others.

The difficulty, therefore, is that there is a chairman who is very able but whose heart and soul is not in the job and who wishes to exit. It is also the case that at least 1,600 members of the workforce have expressed an interest in exiting. I am diluting the probable figure in this regard as far as I can. Likewise, the chief executive officer, chief operations officer and finance officer want to leave. Why do 1,600 members of the workforce and the three talented members of the top management want to go? Why does the chairman of a company that makes €100 million per annum want to go and nobody wishes to take his place?

The three executives are tactful and do not wish to be undiplomatic because they will stay in their posts until May. They have a real commitment to the airline and will not do anything to damage it in that period. However, reading between the lines, it is obvious there is one obstacle to the progress of Aer Lingus. That obstacle is the State. This is the reason Mr. Walsh and his colleagues want to leave the airline. I find it difficult to listen to the great tributes paid to Mr. Walsh by those who have provoked his departure. We are good at this type of sentiment in Ireland. Such was evident yesterday in the Dáil where the greatest applause was reserved for the former Minister for Finance, Deputy McCreevy. The loudest applause came from Members on the Fianna Fáil backbenches, the people who most wanted him out. Likewise, great plaudits are given to Mr. Walsh and his colleagues by those who have obstructed his path.

The situation is difficult. We have three committed entrepreneurs who find the State an obstacle to their progress. They have made a significant amount of money and turned around the fortunes of Aer Lingus. However, they now find they will be unable to take the actions they wish in the future.

What approach will we now take? The Minister claims he will make a decision by Christmas. I may be wrong but I feel confident in predicting what that decision will be. It was probably made a long time ago. T he Government will decide to retain a majority stake in Aer Lingus but will seek external private investment. There is no mystery in the case. Such a decision has been inevitable for years. The Goldman Sachs report was published in October and it has taken two months for it to be properly considered. The report provided options and the Government will choose the option it was always going to take. It will try to find a chief executive officer who will accept those marching orders. That is a difficult position for any chief executive officer. It is a case of the State directing an entrepreneur from time to time to take actions in which commercial interests are not paramount. This is the reality.

What is happening at Aer Lingus is simple. The Taoiseach has got involved and is using the airline as a plaything. His purpose is to promote his new and successful agenda, the type of happy-clappy economics to which we have already referred in this House. The Taoiseach’s only interest is to save the Fianna Fáil seats in north Dublin. He has established a Cabinet sub-committee, commissioned the Goldman Sachs report and taken various other initiatives. His sole objective, however, is to protect the seats of Deputies Wright, Glennon, Haughey and Callely. Any decisions regarding Aer Lingus will be based on the consideration of holding those Dáil seats in north Dublin. As a result, the commercial mandate given to people such as Mr. Willie Walsh is irrelevant.

Can the Minister indicate the type of person he imagines will take Mr. Walsh’s job? What qualities will a replacement possess that Mr. Walsh did not, and vice versa? If Mr. Walsh and his crew are fed up with the difficulties in the State sector because the Government is in the way, what kind of man or woman will take on this job? The frustrations felt by Mr. Walsh will be even greater when the Government takes the decision to remain in control and in the way. We will have a chairman who is politically appointed and politically acceptable and who will put through the measures which a political party wants. We will have a chief executive who also fits that bill.

Everyone knows the next chief executive will be politically approved and will be acceptable not to the board, which is also politically appointed, but to the Taoiseach. He must have the philosophy which will tie in with the current philosophy of Fianna Fáil. As a result, the commercial mandate of Aer Lingus will be diluted.