Business Irish

Monday 26 September 2016

Cabinet approves Aer Lingus deal as 'Labour Seven' come on board

Published 27/05/2015 | 03:00

Transport Minister Paschal Donohue
Transport Minister Paschal Donohue
Aer Lingus Aircraft At Dublin Airport

The Dail will today debate the long-awaited Aer Lingus package after it finally secured Cabinet approval as well as the backing of Labour Party backbenchers.

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Transport Minister Paschal Donohoe last night moved to allay a series of concerns surrounding the future of the Heathrow slots and the Aer Lingus brand, as well introducing new pledges surrounding routes and tourism.

The Government has pledged to use the €335m received from the sale for investment purposes and not to pay off the national debt.

But as the International Airlines Group (IAG) officially made its bid to the stock exchange, the minister insisted that the existing employment rights of all Aer Lingus employees will be "fully safeguarded".

Trade unions Impact and Siptu disagreed and said the deal was bad for jobs.

Nonetheless, Labour TDs previously opposed to the sale have done a U-turn after a suite of new concessions from IAG allayed their concerns.

Demands

Members of the so-called 'Aer Lingus Seven' say they will now vote in its favour following the significantly revised offer.

The change of heart came after senior Coalition figures spent a significant period yesterday reassuring Labour deputies that their demands were being met.

Labour TD for Dublin North East Sean Kenny said it was "a better deal" than previously hoped for and that the pledges around jobs would be significant for the North Dublin area.

Labour TD for Dublin North Brendan Ryan said he understood that the bulk of his colleagues' concerns had been adequately addressed. He said he had some outstanding reservations on assurances to the airline's workers.

Tanaiste Joan Burton's spokesman said she was pleased with the "significantly improved offer" that "comprehensively" addressed concerns put down in a Labour Party motion at its national conference.

"The deal protects and will enhance connectivity, protects and will enhance jobs and includes long-term plans for growth," he said.

"Particularly important is the agreement by Aer Lingus to sign up to a registered employment agreement to ensure existing terms and conditions of workers are fully protected," he added.

Read more: Aer Lingus Takeover: 4 new transatlantic flights, 8 new planes, 2.4 million new passengers

Impact spokesman Niall Shannon, whose union represents 2,000 Aer Lingus workers, said there "many unanswered questions" which were of "grave concern" to his members.

Meanwhile in Fine Gael, a number of deputies who previously voiced concerns about the sale said the deal appeared to have serious merits. Included in this group are Limerick TD Patrick O'Donovan, Clare TD Joe Carey and Dublin North TD Alan Farrell.

"The figures released by Cabinet would suggest this proposal has enormously positive benefits for Dublin airport, Dublin itself and Ireland as a whole," said Mr Farrell.

There was initial panic yesterday morning after Labour deputies claimed to have learned the deal was imminent in media reports.

But Mr Donohoe last night said the airline company expects to "sustain and create employment" and this will result in an increase of approximately 150 employees next year and the creation of 635 jobs by 2020.

It also hopes to create indirect jobs in airport and airline support activities and in broader Irish economy, particularly in the tourism industry.

Connectivity

The company has agreed to "legally binding connectivity commitments" as part of the proposal.

Aer Lingus's Heathrow slots will continue to be held by the airline for a period of seven years. The Government will be able to block the sale of Heathrow slots but will need 5pc of other shareholders to stop any sale.

The deal will see Aer Lingus continue to operate its routes between Heathrow, Dublin, Cork and Shannon for at least seven years. A five year guarantee was given on Heathrow routes to Belfast.

Herald

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