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Transport Minister insists Aer Lingus sale ensures Government guarantees

Minister for Transport Paschal Donohoe has insisted the decision to sell Aer Lingus gives the Gov...
Newstalk
Newstalk

19.59 26 May 2015


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Transport Minister insists Aer...

Transport Minister insists Aer Lingus sale ensures Government guarantees

Newstalk
Newstalk

19.59 26 May 2015


Share this article


Minister for Transport Paschal Donohoe has insisted the decision to sell Aer Lingus gives the Government more guarantees than it already had.

Mr Donohoe was commenting after ministers approved the sale of the government's 25-per-cent stake, in a deal worth €335m.

The deal came after IAG said it intended to create 200 jobs at Aer Lingus next year - although 50 would be cut - and a total of over 600 jobs by the year 2020.

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Mr Donohoe explains that IAG has also agreed to ring-fence the use of the Heathrow slots for Irish routes for seven years.

"It is anticipated that this move will bring benefits to both Aer Lingus’s long and short haul networks within the IA Group and there will be continued focus on sustaining and growing routes from Dublin, from Cork, From Shannon and from Knock,2 he said.

Ministers are understood to have agreed the sale to IAG after securing extra assurances about jobs at the airline.

Ministers needed barely over an hour this evening to sign off on the sale of the government's 25.1 per cent stake in Aer Lingus.

The deal comes after IAG offered the government more assurances about the future of its slots in Heathrow, and its plans for job creation.

Mr Donohoe said the Government has concluded "that supporting IAG’s offer is in the best interests of the airline, its employees, the travelling public, job creation and the economy overall.’"

It's understood IAG has promised to create over 600 new jobs by the year 2020, and will now use Aer Lingus's slots at Heathrow for Irish routes for a guaranteed 7 years - up from the original 5.

There has also been a commitment to retain the use of Irish flight crews wherever possible, with all employees benefitting from Registered Employment Agreements.

The sale should mean a windfall of €350m which will be used for transport, broadband and other connectivity projects.

However it may mean a collision course with government backbenchers who have concerns about the short-term effects in jobs in their own constituencies.

There has been a mixed reaction to the news.

IMPACT trade union have responded to the news, saying the sale “is bad for jobs, for Aer Lingus workers and for Ireland’s connectivity and economic development.”

“For the staff at Aer Lingus, there are genuine concerns of compulsory redundancies if the deal goes through, along with the prospect of a further erosion of terms and conditions in the inevitable restructuring of the company,” a statement from the union said.

The union also expressed the concern that once the seven year guarantee on the future use of the Heathrow slots has elapsed, “the interests of IAG shareholders will always trump the interests of the Irish economy and the Irish travelling public.”

Niall Gibbons, CEO of Tourism Ireland, has said the deal “represents a huge boost for the tourism sector” in Ireland. Mr Gibbons pointed to the new connections Aer Lingus would have with American Airlines and the oneworld alliance as a benefit that would “give Irish tourism the benefit of a larger global sales network”.

Sinn Féin Transport Spokesperson Dessie Ellis TD said he believes the deal is a bad one for Ireland in the long term.

“It is very disappointing and I have grave concerns for the effect it will have on Ireland’s connectivity into the future as well as the threat it poses to workers in Aer Lingus and to deferred pension members,” he said.

“IAG have no interest in Ireland and the government have failed to stand up for the interests of the country instead seeking to make a quick profit as an election looms,” he added.

 


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