herald

Monday 21 August 2017

Labour up ante in bid to ground IAG deal

Aer Lingus
Aer Lingus

LABOUR Party members have upped the pressure on the Government not to sell its share in Aer Lingus – but a deal is still on the cards.

Delegates voted overwhelming at the party conference to reject the IAG bid for the airline unless concrete guarantees are given on jobs and slots at Heathrow.

But some TDs and union leaders warned party members that the future of Aer Lingus is complex and a sale might still be desirable.

The conference motion is not binding on the party leadership, and sources inside Aer Lingus insisted yesterday that it was still likely that IAG chief executive Willie Walsh will be able to address many government concerns.

Mr Walsh meets with unions on Friday, but IAG and Aer Lingus declined to comment yesterday on suggestions that he will sweeten his offer with new guarantees.

The Labour motion had four main demands. The first calls for an independent valuation of the company’s assets and its slots at London’s Heathrow Airport.

The second demand looks for a commitment to prevent the outsourcing of jobs and compulsory redundancies. The third demand calls for guarantees on Heathrow slots, while the fourth demand is for a plan for Cork and Shannon airports.

Proposing the motion, Dublin North TD Brendan Ryan described the present offer from IAG as “a bad deal”. But he did not rule out support for a better offer.

“We need to judge every single deal on its merits; we judged this deal and we opposed it. There may be a deal some time in the future which meets all of our concerns,” he said.

Party colleague Joe Costello, who seconded the motion, also appeared to believe a better deal is possible.

“We saw Willie Walsh say he does not do second bids, and already Willie Walsh is on his third bid. We read this morning he is working on a fourth bid,” Mr Costello said. “We have to put down a very strong marker, we have to use our leverage of the 25.1pc shareholding in relation to the Heathrow slots.”

Siptu union leader Jack O’Connor offered both support and criticism of the €1.36bn bid, but called for more detail from Mr Walsh.

“At least what they are saying is rational, but we will have to learn a great deal more about it before we are able to make a judgment on it,” the union president said of plans for the airline’s transatlantic routes.

“We also need to focus on short haul, which underpins a great many jobs in Aer Lingus and which is also important for the wider context in Ireland.

“I have to say I am extremely concerned about the obvious enthusiasm of (Ryanair boss) Michael O’Leary about this particular proposition.

Generosity

“Why would he support a proposition which on the face of it would strengthen one of his competitors? He is not known for that kind of generosity as far as I can recall.”

While questioning the

Ryanair chief executive’s enthusiasm, Mr O’Connor warned there was no “simple answer” to the future of Aer Lingus.

“While Aer Lingus would survive and prosper in the short-term no doubt, what happens after Ryanair is forced to sell their shares? We have to think beyond that,” he said.

He added that he believed the best outcome would be for IAG to buy most of the shares in Aer Lingus while the Government keeps its stake.

Former minister Pat Rabbitte said that Labour opposition to the sale has softened recently.

hnews@herald.ie

Promoted articles

Entertainment News