Coalition to sign off on offer for Aer Lingus
Hundreds of jobs are promised but unions express concerns
The Labour Party has capitulated to Fine Gael demands and accepted an improved offer for the State's share in Aer Lingus from airline giant IAG.
After months of concerns over the electoral impact of the sale, Labour agreed to sign off on a deal which will see IAG promise hundreds of jobs. The Government will also hold a veto over the sale of the crucial Heathrow Airport landing slots.
It follows months of negotiations with IAG, which is headed by former Aer Lingus chief executive Willie Walsh.
Read more here: Aer Lingus Takeover: Q & A
But the Irish Congress of Trade Unions said that it was a matter of "very serious concern" that the Government had failed to achieve any guarantees on possible job losses and outsourcing in Aer Lingus, despite some progress on issues such as connectivity and slot retention.
Announcing the €335m sale of the 25.1pc State shareholding, Transport Minister Paschal Donohoe insisted it was the best deal on offer for the country and will result in 635 net jobs in five years.
But the minister also revealed the company is likely to shed 50 jobs next year.
The deal will be brought before the Dáil tomorrow morning and could be voted on later in the day, with Coalition TDs set to back it.
Asked directly if any members of the Cabinet voiced concerns at the deal, Mr Donohoe sidestepped the question and said: "We had very productive and detailed discussions."
However, last night Tánaiste 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."
Fine Gael Dublin North TD Alan Farrell said it was "vastly improved offer" but said he wanted to know who will be losing jobs.
"The bottom line for me is that the airport is in my constituency and the vast majority of those losing their jobs will be from there. I would like further information on this," Mr Farrell said.
Read more here: Unions concerned despite Kavanagh's reassurances
The planned takeover will now be referred to competition tsars at the European Commission.
Today, they will open what's known as a phase one investigation into the takeover. That gives the Commission 25 days to analyse the deal. More than 90pc of all takeover and merger cases are resolved in this phase, generally without any remedies being imposed.
Mr Donohoe indicated last night that Brussels will be amenable to the deal.
"In relation to the merger and competition approval, that is entirely a matter for the European Commission. They will be making their own evaluation in relation to this," he said. "Our disposal is dependent on that agreement being provided by the European Commission, and also us evaluating any commitments or conditions they may decide to impose.
"We are confident that the mechanisms in relation to slot usage and slot maintenance will not be opposed."
Read more here: Cabinet approves Aer Lingus deal as 'Labour Seven' come on board
The takeover is also dependent on Aer Lingus shareholders approving the deal. They'll first have to be posted the formal offer document issued last night by IAG, which could take a couple of weeks. Aer Lingus will then have to call an extraordinary general meeting to approve the sale.
One possible fly in the ointment is Ryanair which owns a 29.8pc stake in Aer Lingus. A spokesman said it is still awaiting receipt of a formal offer before it can be considered. Should it agree to a sale, the entire process should be completed in early September.
The Dublin Airport Authority welcomed the Cabinet's decision, saying the deal will lead to more jobs at both Dublin and Cork airports as IAG expands its Irish operations in the future.
Timeline of sale
December 18, 2014: IAG confirms that it has made an approach to buy Aer Lingus, but first offer is rebuffed.
January 9, 2015: The board of Aer Lingus rejects a €2.40 per share indicative offer made by IAG.
January 25: IAG says it's prepared to offer €2.55 per Aer Lingus share.
January 27: Aer Lingus board says it's willing to recommend the IAG offer to its shareholders.
February 12: Willie Walsh tells Oireachtas committee he's willing to give "cast-iron guarantee" on Heathrow slots.
February 16: Aer Lingus appoints new chief executive, Stephen Kavanagh.
February 23: Willie Walsh meets unions to outline takeover plans.
February 24: Aer Lingus reports €72m profit for 2014, up 18pc.
February 24: Transport Minister Paschal Donohoe says IAG has not yet provided sufficient assurances to enable the Government to back a takeover by the company.
March 6: Willie Walsh and Stephen Kavanagh hold meeting with unions to discuss takeover. Unions say they remain unconvinced.
March 23: Mr Donohoe says much work remains before a final report can be prepared.
April 16: Mr Donohoe says deal not struck yet.
May 1: Aer Lingus chairman Colm Barrington reiterates support for takeover.
May 5: Tánaiste Joan Burton says decision still weeks away.
May 26: Taoiseach Enda Kenny and Cabinet finally make decision on sale.