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Aer Lingus sale: Oireachtas commitee hearing to discuss impact as concern grows in coalition

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Aer Lingus

Aer Lingus

Aer Lingus

The Oireachtas Transport Committee will hold a special meeting to discuss the impact of the potential €1.4bn sale of Aer Lingus.

The move comes amidst growing concern within the coalition on the sale of the airline which is 25.1pc owned by the State.

It is understood that Tanaiste Joan Burton told the Labour parliamentary meeting this week that she had yet to be convinced that selling the airline was the right move.

However, she added that the deal could not be blocked and that people had to be realistic about what the Government could do while a number of Fine Gael TDs and senators also spoke out against it at their parliamentary meeting.

IAG, the parent of British Airways, Iberia and Vueling, has made an offer of €2.55pc, after earlier offers were rejected, and the board of the airline has recommended it - pending regulatory approval.

The State owns a 25.1pc stake while rival Ryanair holds almost 30pc.

The Oireachtas meeting will also hear from representatives of the Irish Airline Pilots' Association as well as trade unions.

Chairman John O'Mahony TD said: "Any proposed sale of the State's stake in Aer Lingus would be of significant interest to passengers and to various interested stakeholder groups, including tourism, business and commerce groups and those working in the aviation industry in Ireland.

"We will have a chance to discuss the implications of any possible sale of the Government's stake in the airline in more detail as well as the impact of any sale for the taxpayer.

"Committee members will want to address concerns about possible job losses and routes being negatively impacted."

In addition, Aer Lingus was poised to select either its chief strategy and planning officer Stephen Kavanagh, or Easyjet chief operations officer Warwick Brady as its new chief executive, the Irish Independent understands.However, a replacement for outgoing Aer Lingus boss Christoph Mueller is now on ice until the takeover approach by IAG is finalised.

Mr Brady (50), is a South African and worked with Ryanair as its deputy operations director between 2002 and 2005. He joined Easyjet in 2009, having worked for two years as chief operations officer at Indian carrier Air Deccan,

Mr Kavanagh (47) has worked with Aer Lingus since 1988 and has spearheaded development of its resurgent transatlantic business.

Aer Lingus chairman Colm Barrington had originally expected that he would have been in a position to name Mr Mueller's successor before the end of last year.

But that announcement was delayed when IAG made its first approach to buy Aer Lingus.

An Aer Lingus spokesman declined to comment last night.

If IAG is successful in buying Aer Lingus, the appointment of a new chief executive at the Irish airline will be ultimately decided by IAG chief executive Willie Walsh.

When the search for a new Aer Lingus chief executive was launched last year, among those understood to have been initially considered for the role include former Aer Lingus chief financial officer Brian Dunne.

Insiders

Mr Dunne held that role while Willie Walsh was chief executive at Aer Lingus, from 2001 to 2004. Mr Brady was appointed a non-executive director of UK transport group FirstGroup last year.

Coincidentally, Nicola Shaw, who's a non-executive director at Aer Lingus, was a senior executive at FirstGroup.

She left FirstGroup in 2010, the same year she was appointed to the Aer Lingus board.

Some aviation insiders expressed surprise that Mr Brady was considering the top seat at Aer Lingus.

They said that he's believed to be very well compensated at Easyjet, which is known for generous remuneration packages.

Easyjet's chief executive, Carolyn McCall, was paid nearly £7.7m (€10.3m) last year.

That included a £677,000 salary, a £1m bonus and almost £6m in long-term share awards.

The airline's group finance director, Chris Kennedy, was paid a total of £4m (€5.3m). That included a £418,000 salary and £3.1m in a long term share awards. The annual report does not detail the remuneration of any other Easyjet executive management.

Mr Mueller received options on 1.5m Aer Lingus shares when he joined the airline in 2009.

There was uproar last year when it emerged he had been paid €1.5m in 2013. The Government voted against the pay package at the airline's annual general meeting.

The package included a big pension contribution at a time when the airline was negotiating a pensions deal with thousands of workers.

Irish Independent