Thursday 14 December 2017

Donohoe and Walsh hold direct talks on Aer Lingus

Proposed sale of airline unlikely to go ahead due to Labour opposition

Paschal Donohoe
Paschal Donohoe

Daniel McConnell and John Drennan

Transport Minister Paschal Donohoe has held a number of "direct conversations" with IAG boss Willie Walsh over the proposed sale of Aer Lingus, the Sunday Independent has learned.

Negotiations between the Government and the airline group are being handled by an inter-departmental group, but Mr Donohoe and the former Aer Lingus chief have spoken several times in recent days over the sale of the national carrier.

Mr Donohoe has repeatedly refused to air his personal views as to the merits of any potential sale but confirmation of direct contact between him and the IAG boss is significant.

Despite the contact, Government sources last night said the chances of the State's stake being sold are now "almost zero" given the strong opposition within Government to the deal.

One senior Fine Gael source told the Sunday Independent: "It would be very difficult to see a deal being successful. It may not be the ideal way of setting policy but it is the electoral reality we are facing."

News of Mr Donohoe's meetings with Mr Walsh comes as senior Fine Gael figures last night strongly rejected claims by the Labour Party that it was victorious in blocking the deal.

Mr Donohoe last week went to considerable lengths to contain the mounting political crisis, holding private meetings with Labour and Fine Gael TDs to address their concerns.

"From both sides, the main issue was connectivity and concerns around that. It is now a waiting game," a Government source told the Sunday Independent.

At the Fine Gael parliamentary party meeting last week, two separate motions about protecting Cork and Shannon slots into Heathrow were proposed by TDs Kieran O'Donnell and Jerry Buttimer.

While Mr Donohoe's openness has been welcomed by anxious Government backbenchers, Labour TDs remain "totally opposed" to the deal.

A number of deputies who spoke to this newspaper said they would quit the Government if the sale goes ahead.

Labour party chairman Jack Wall said that selling the stake would represent a "major blunder" for the Government.

Speaking to the Sunday Independent, he said TDs from all over the country were united in their opposition to the deal.

ANALYSIS page 20 business SECTION pages 1, 2 & 6

The Labour Party held several meetings about the issue last week as an internal faction of Labour TDs, known as the 'Aer Lingus Seven' prepare to hold further talks in the days to come.

One member of the group, Meath East TD Dominic Hannigan, said he and his colleagues are of the view that the Government will "get absolutely nothing" by selling the stake.

Former minister Joe Costello said: "Aer Lingus has always been a hot potato, in the Fianna Fail Labour coalition four Labour TDs - myself Sean Ryan, Tommy Broughan and Derek McDowell - lost the whip."

Elsewhere, the world's biggest multi-nationals are concerned about what the sale of Aer Lingus will mean for their businesses and future foreign investment into Ireland.

Pfizer, Bristol Myers Squibb, Icon, Element Six, Intercom, Telecity and others have all voiced concerns about the impact on their businesses if Aer Lingus loses its valuable Heathrow slots.

Sunday Independent

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