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Sunday 23 April 2017

Panic in Labour as Aer Lingus sale to be given green light

British Airways owner IAG has offered to buy Aer Lingus
British Airways owner IAG has offered to buy Aer Lingus

Niall O'Connor and Philip Ryan

THE new offer on the table from airline giant IAG to buy the State’s share in Aer Lingus will “allay a lot of concerns” among Labour TDs, according a senior source in the party.

The source, who is close to the deal being discussed at Cabinet today,  said he is “pretty confident” that the concerns among TDs, mostly from North Dublin, will be addressed in the new offer.

He said the motion agreed on at the Labour Party’s annual conference is dealt with in the new package being offered by IAG boss Willie Walsh.

“Once details of this is out there  - the membership will see it is a reasonable and of long term value to the State,” the source said.

“They will have a conversation about it but there is a view that there is an awful lot of promises in the offer that meets their needs,” he added

The source admitted the deal might not get across the line today.

A number of Labour TDs, including Joe Costello, Robert Dowds and Michael McNamara were this morning demanding guarantees from Tanaiste Joan Burton that any such deal must allay their fears a potential sale.

The deputies insist they will not support a deal unless there are “substantial assurances” over issues such as routes, the Heathrow slots, jobs, the use of Cork and Shannon Airports and the actual valuation of the company,

During an early morning meeting with unions, Transport Minister Paschal Donohoe said the proposed takeover by the International Airlines Group (IAG) includes a number of concessions surrounding routes and the Heathrow slots.

It’s believed IAG has offered seven year guarantees surrounding the slots having previously been told the five year proposal was not satisfactory.

But the prospect of a sale, being discussed by the Cabinet today, has sent a wave of panic throughout the Labour backbenches.

Deputies, a number of whom are Dublin-based, have demanded details of the proposed deal from the Labour leadership today.

“We want all the documentation relevant to the proposal from IAG and will likely seek a briefing after Cabinet,” Joe Costello said.

Significantly, union sources have today conceded that the deal is likely press ahead despite their opposition.

At today’s Cabinet meeting, Mr Donohoe was expected to outline the findings of an expert group which is understood to have come down in favour of a deal.

Sources say the report concludes that the price offered by IAG is reasonable and that the British Airways-owned airline has given enough assurances around the use of Cork and Shannon airports.

Mr Donohoe met union officials at Government Buildings today ahead of the expected sale. While the deal might not be signed off on this week, there is now “renewed political momentum” behind agreeing to the takeover, according to sources.

A spokesman for the Impact Trade union told independent.ie that the union’s position remains that the assurances being put forward by IAG are “worthless”.

But a senior Labour source moved to allay the concerns of backbenchers.

“Major efforts have been made to address Labour Party concerns as set down in a motion agreed at conference,” the source said.

The motion, signed by eight Labour TDs, called for an independent valuation of the Aer Lingus assets and Heathrow slots.

It also sought a commitment to prevent the outsourcing of jobs and compulsory redundancies at the airline.

And the motion called for a plan for Cork and Shannon airports, taking into account their value with their individual regions.

Speaking about the discussions on the proposed sale of Aer Lingus, Children’s Minister James Reilly said the Cabinet had a good discussion about it this morning.

“We are going to reconvene at about a quarter past six and we will bring the matter to a conclusion at that point I have no doubt.”

He said that there wasn’t any major disagreements this morning. It was more a question of “finessing” some of the points raised.

“We will do that I would say, it shouldn’t be too long  a meeting, but one never knows.”

“We are acutely aware of all the concerns of both workers and of the general population in terms of the connectivity here for the country and for jobs, and I think we are in a very good position at the moment. I think one of the key points that will be made by any member of Cabinet is this is not a question of not making a decision. Not moving forward is a decision as well, and will have consequences,” he said.

He added that until Cabinet makes it’s decision, no decision is made.

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