Thursday 27 July 2017

Heathrow slots risk as Cabinet mulls selling stake in airline

Fionnan Sheahan Political Editor

THE Government is considering selling its remaining stake in Aer Lingus, without any special protection for the coveted landing slots at Heathrow Airport.

The Coalition is currently estimating the value of a shortlist of blue-chip state companies.

The remaining 25pc stake in the airline is worth about €100m and Fine Gael and the Labour Party are in no hurry to sell.

A government source said the Coalition will look to sell "if and when the price is right". But the flight slots at Heathrow Airport in London are not believed to be a deal-breaker.

The Government regards the Heathrow slots as "secondary".

"It's not as important as it was several years ago," the source said.

The Government has previously regarded the Heathrow slots as vital to the country -- but the growth in the number of flights into the country from other airlines has reduced their importance.

The Government's decision will depend upon the "interests of the travelling public", a source said.

Attaching a safeguard on the Heathrow slots would most likely reduce the market value of the stake.

Ministers are currently debating the sell-off of state assets. A report on the sale of companies, including Aer Lingus, is finished and has been discussed by the Government's economic sub-committee, consisting of Taoiseach Enda Kenny, Tanaiste Eamon Gilmore, Finance Minister Michael Noonan and Public Spending Minister Brendan Howlin.

Apart from the ESB, which is being part-privatised, the Coalition is also estimating how much can be made from Bord Gais, the Dublin Airport Authority, Bord na Mona, Coillte and Aer Lingus.

Mr Noonan said the Government does not want to have a fire-sale of state assets. "There's no great urgency," he said.

The Cabinet did discuss the sale of state assets but did not come to any decisions. Mr Howlin will also brief the IMF-EU bailout team on the progress to date in privatisations.

The only Government decision so far was the one to sell off part of the ESB but no date has been set for the sale. The Coalition also had a report compiled on the sale of part of the energy company.

Mr Noonan said the bailout organisations were not going to force the Coalition into the sale of any assets when the price is low.

The minister rejected repeated accusations from Fianna Fail that the Government is hiding behind the IMF-EU on the decisions it makes.

The sale of a minority stake in the Dublin Airport Authority will be examined, but the breaking up of Dublin, Cork and Shannon Airports will also have to be examined.

Bord Gais and Bord na Mona could end up going down similar routes to the ESB, with outside investors being sought. Any privatisation of Coillte, the national forestry service, would not involve the sale of any land but would focus on the leasing of land for plantation.

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