Saturday 20 October 2018

Why the Ryanair move is in the national interest

Ryanair's takeover of Aer Lingus is in the national interest - if the national interest is seen as the sum of the interest of Irish individuals.

There are those who may legitimately claim otherwise, but their voices have not been heard in the days since Ireland's best-paid taxi driver made what is the most audacious move of an audacious career.

Many have laid claim to the national interest in opposing Ryanair's bid, using the claim to camouflage naked self-interest.

First among these is Martin Cullen, who may be smarting at allegations that he sold the airline off too cheaply. The allegations are understandable, given the Government's decision to value the airline at ?1.1bn (although excluding the ?534m in fresh funding which was raised, the valuation was really only ?566m) only to have Ryanair make an opening bid of ?1.5bn. Understandable, but misplaced.

Siptu's ludicrous claims to prescience after the fact notwithstanding, nobody saw the Ryanair bid coming, so it's a case of let he who saw the man from Mullingar on the horizon cast the first stone.

Mr Cullen has said that allowing Ryanair to take over Aer Lingus would not be in the best interest of competition.

This is the same minister who 12 months ago secretly called on the aviation regulator to put other interests aside, including competition, to favour the finances of the monopoly airport operator in making his determination on passenger charges at Dublin Airport.

Aside from the political embarrassment Mr O'Leary's bid has caused, it would be naive in the extreme to believe that Mr Cullen's proclamations are motivated by the interest of competition rather than Fianna Fáil seats in North Dublin.

Siptu itself has claimed the national interest in its opposition of the Ryanair move.

This is the same trade union which in 2004 threatened to bring the country to a halt during our presidency of the EU because it didn't like the Government's plans to break up the airport operator formerly known as Aer Rianta.

The trade unions had vigorously opposed Willie Walsh's attempts to make some very sensible rationalisations.

Both the Government and the trade unions have called the mantle of competition on themselves to support their self-interested claims.

Let me say at the outset that this business section is a fervent supporter of competition as the best means of insuring the best possible deal for the ordinary consumer.

Not, you will notice, competition for its own sake - but competition for the ordinary consumer or, to put it another way, for the national interest.

Many media outlets have chosen to ignore the fact that Aer Lingus in its flotation prospectus said its fares would have to increase for the foreseeable future, while Mr O'Leary has said that he will reduce Aer Lingus's average fares by at least 2.5pc for each of the next four years.

A guaranteed increase in fares, or a guaranteed reduction in fares. Which of these is in the national interest?

Take into account not only Irish people's need to do business abroad, or their desire for leisure travel, but the foreign visitor which supports our tourism industry. The last time I checked tourism was still one of our biggest and most important industries.

Predictions that a Ryanair takeover of Aer Lingus would give the airline between 60pc and 70pc of the Irish airline traffic are predicated on the idea that Aer Lingus passengers will not move to one of the myriad of other airlines which flies into and out of Ireland.

That principle, and not the self-interested claims of the Government, or the trade unions, is what true competition is all about.

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