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Aer Lingus sale: Minister 'considers draft report' as saga to hit six-month mark


A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

A strike could cause chaos for Aer Lingus on St Patrick's weekend. Photographer: Tim Boyle/Bloomberg

Transport Minister Paschal Donohoe is understood to be considering a draft version of a long-awaited report on the future of Aer Lingus.

The final report is being compiled for Mr Donohoe and will make a final recommendation on whether or not to sell the State's 25pc stake to rival IAG. The Dáil must then approve any sale.

The Government has been dragging its feet since IAG said in December that it would pay almost €1.4bn for Aer Lingus. No deal is possible without support from Ryanair, which owns just under 30pc of Aer Lingus, and the State, which owns 25pc.

Repeated assurances that the Government will signal its intentions one way or the other have so far proved optimistic.

A Cabinet meeting tomorrow is not scheduled to discuss the bid which means that management, staff and investors will still be in the dark more than six months after IAG made its first bid for Aer Lingus.

Recently appointed Aer Lingus chief executive Stephen Kavanagh said yesterday that a Government decision on the sale of the airline was "close" and that "all the information" supports selling to IAG.

Mr Kavanagh told the Irish Independent he sees no negative effects in the State selling its stake to IAG.

"Most, if not all, of the information that is available supports the Aer Lingus board of management view that this is a compelling proposition for all stakeholders," he said.

"It will build up the connectivity. It will give Aer Lingus opportunities for accelerated growth and it will generate significant levels of direct and indirect employment, so we don't see any negatives associated with the proposition."

Asked if he was getting frustrated by the time it was taking for the Government to come to a decision, he said it was important the decision wasn't rushed. "If people need time to come to that decision, that's something we will support but we think we're getting close to decision time."


He added: "It's the ultimate compliment that someone wants to pay €1.4bn for the business that Aer Lingus and its people have built up over recent times. If that takes a few more weeks to come to fruition then those are weeks well spent so it's not frustration.

"We're focused on continuing to build out what IAG is paying substantial amounts of capital for."

Most analysts now believe a deal is likely.

Shares in Aer Lingus are still hovering close to the bid levels; suggesting that insiders know that the Government will ignore opposition to any deal from some employees or parts of the Labour Party.

Discussions between IAG and an expert group appointed to advise the Government on its bid are over and sources say there are no major differences left. The two sides had argued over a so-called guarantee on the Heathrow slots, new routes, employment commitments and the future of Cork and Shannon airports.

The Government had wanted a 10-year guarantee on the use of the slots in Heathrow for flights to Ireland, and IAG had offered a five-year guarantee. Sources say the compromise deal will guarantee the slots for seven years.

IAG has also held talks with Aer Lingus unions to try to persuade workers that most jobs will stay in Ireland. It is not clear whether unions will now back the deal.

Both the Impact and Siptu trade unions said last week that there has been no recent talks between it and the Government, and they remain opposed to the sale.

Eight Labour TDs, who got motions on the issue passed at the Labour Party's annual conference, also warned they had no reassurance from the Transport Minister on concerns about job security; connectivity to Dublin, Cork and Shannon; and Heathrow slots.

Irish Independent