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Andrew Lynch: Selling Aer Lingus may cause Labour to crash and burn

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Tanaiste Joan Burton

Tanaiste Joan Burton

Tanaiste Joan Burton

Fine Gael and Labour TDs on the northside of Dublin are advised to fasten their seatbelts. There may be turbulence ahead.

The Government's potential sale of its stake in Aer Lingus has raised fears of major job losses, which the opposition intend to exploit in a general election that is now 15 months away at most.

For most of its 79-year history, Aer Lingus has played a major role in Irish public life. The future Taoiseach Garret FitzGerald started his working life there (and was so successful that it reportedly took five computers to replace him).

Garret's arch-rival Charlie Haughey once summoned the airline's CEO to his Kinsealy mansion and complained that low-flying planes were killing his swans.

The days when Aer Lingus was an iconic symbol of Irishness, however, are long gone. Low-cost rivals such as Ryanair revolutionised the aviation industry, hurting our onetime national airline so badly that it was eventually privatised by Fianna Fail a decade ago.

Ever since then, a full-scale takeover has been on the cards - and now the Government has been made an offer that it may not be able to refuse.

From a financial point of view, the bid by International Airlines Group (IAG) has to be taken seriously. The parent company of British Airways is suggesting a price of €1.36bn, which means that the Government could pocket €340m for its 25pc stake.

slots

This may not be a vast amount of money in the context of our national debt, but it is hardly small change either for a coalition that would love to splash some cash before voters go to the polls.

From a political point of view, however, jettisoning Aer Lingus comes with a couple of major risks. It raises a question mark over the company's landing slots at Heathrow airport in London, which are absolutely vital for all sorts of Irish economic activity.

More immediately, it would lead to at least some job losses back home - and that should strike fear into the heart of every Government TD north of the River Liffey.

The trade union Impact is warning that an IAG-owned Aer Lingus might cut over a quarter of its 4,000-strong Irish workforce. That sounds suspiciously like scaremongering, since the airline has already made major cutbacks in recent years.

Right now, however, nobody knows for sure, which means that a quick sale would be like jumping out of a plane without testing the parachute first.

Not surprisingly, some Fine Gael and Labour backbenchers are publicly urging Enda Kenny not to take the risk. As a dyed-in-the-wool northsider, Tanaiste Joan Burton (left) must be particularly aware of the damage that this could do to her party on the doorsteps.

Their left-wing enemies from Sinn Fein and smaller parties will be only too happy to claim that Labour is selling Aer Lingus along with its socialist soul.

If the Government wanted to block this sale, it could have done so already. Instead, the Taoiseach dropped a clear hint yesterday when he correctly pointed out that Aer Lingus is "not a national airline in the way it used to be".

At the very least, it sounds as if Enda Kenny is sorely tempted to take the money and fly - hoping that €340m will eventually make up for any short-term political losses.

cheapest

One possible compromise is for the Government to demand commitments from IAG on holding the Heathrow slots and keeping job losses to a bare minimum. In reality, this would be a sticking-plaster solution at best.

As soon as the Government stake is gone, it is gone forever - and within a few years company promises will not be worth the paper they are written on.

Many Irish people of a certain age are horrified at the thought of Aer Lingus' shamrock being replaced. In the harsh world of commerce, however, there is little room for sentimentality.

All things equal we still prefer to fly Aer Lingus - but we also check its rivals' websites to secure the cheapest price.

Whichever way you look at it, selling Aer Lingus would be a huge political gamble. The Government's northside TDs will not exactly be thrilled if Enda Kenny uses their Dail seats for chips.


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