An independent Aer Lingus is no 'tragedy' for our nation
Published 09/04/2015 | 02:30
We should consider more than shareholder value before we consider selling the State's strategic interest in Aer Lingus.
Various people have taken sides in this debate and the economist Colm McCarthy, one of the strongest proponents of the Willie Walsh-led takeover of Aer Lingus by IAG, recently wrote that doubts over the sale are "groundless", with the sale being "unquestionably" in the best interest of shareholders.
Public representatives, however, should take account of a wider range of factors than simply whether the shareholder price is right.
We need to consider the long-term consequences - both known, unknown and even unintended - that this sale could have on the local economy and future investment on the island of Ireland.
Articulating this wider perspective should not be dismissed as "pandering'' to vested interests. We must all recognise that direct connectivity to London as well as to North America is the life-blood of our local economies.
Proponents have described this argument as nothing more than misplaced patriotism, "hyper-nativism'' or even more fantastically, simple anti-British sentiment.
According to these experts, there is no national interest argument to be made in defence of retaining the State's strategic share, as the national interest is best served by securing the future growth of passengers at the airline.
I agree that ensuring long-term growth is critical. However, it is far from clear to me that long-term growth at Aer Lingus is best secured by selling out to IAG.
Based on its current growth trajectory, remaining as an independent carrier is not the tragedy those who are promoting the sell-out would have us believe.
Aer Lingus has successfully emerged from the recession, one of the deepest in the Organisation for Economic Co-operation and Development (OECD), as a lean and ambitious organisation with huge cash reserves.
Over the past number of years, its passenger growth has been remarkable, substantially out-performing IAG-owned British Airways with a 19pc increase in passengers since 2007, compared with 16pc for BA.
By remaining independent, Aer Lingus can do more than just survive. Indeed, over the longer term, it can emerge stronger.
Promoters of the deal, in the media and on the Government backbenches, rarely mention the enormous downside risks to the national interest associated with the bid. For consumers, the trend towards consolidation could have very negative consequences, creating huge companies akin to private monopolies; as in North America, where just four companies control 80pc of the traffic.
This, and other reasons not connected to local issues, are why I am against the sale of the State's stake in what I regard as a strategic national asset.
Timmy Dooley is the Fianna Fáil spokesperson on transport.