herald

Wednesday 7 December 2016

Minister dismisses concerns as Cabinet backs €335m IAG deal

Aer Lingus is the subject of a takeover bid
Aer Lingus is the subject of a takeover bid
Pascal

TRANSPORT Minister Paschal Donohoe this morning defended the deal to sell the Government’s stake in Aer Lingus insisting that there are guarantees in place now that didn’t exist beforehan

His remarks come as unions and some TDs raised concerns over the €1.3bn bid by International Airlines Group (IAG) to buy the national carrier.

The Dail was today debating the long-awaited Aer Lingus package after it finally secured Cabinet approval, as well as the backing of Labour Party backbenchers.

The Government has pledged to use the €335m the state will receive from the sale for investment purposes and not to pay off the national debt.

READ MORE: Sale of Aer Lingus could leave Labour deputies grounded

As IAG officially made its bid to the stock exchange, the minister insisted that the existing employment rights of all Aer Lingus employees will be “fully safeguarded”.

READ MORE: 'It's a huge employer - if there are job losses it will have a knock-on effect'

However, Trade unions Impact and Siptu disagreed and said the deal was bad for jobs, while Dublin North TD and former Aer Lingus worker Clare Daly raised concern over the future of jobs at the airline.

“When IAG took over Iberia thousands of people lost their jobs,” she said claiming that “a similar figure in Ireland would be about 1,000 for our workforce.”

READ MORE: New IAG offer to buy State's share of Aer Lingus will 'allay TDs' concerns'

“There’s no guarantees in this whatsoever,” she told RTE Radio.

Mr Donohoe this morning moved to allay concerns.

Asked if the deal rules out compulsory redundancies and outsourcing, Mr Donohoe said that he couldn’t predict the outcome of future talks between Aer Lingus and the unions.

“I’m emphasising that we have received a commitment from [chief executive] Stephen Kavanagh and Aer Lingus that they do not foresee use of compulsory redundancies or non-direct employment,” he said, stressing that 635 jobs will be created in the deal.

He also added that there are additional guarantees on the Heathrow slots.

2015-05-15_new_9545828_I1.JPG
Paschal Donohoe

“It’s a seven-year guarantee in relation to the use of slots that’s not in place now,” he said on Morning Ireland.

The Government will also be able to block the sale of Heathrow slots but will need 5pc of other shareholders to stop any sale.

As news of the deal emerged last night Labour TDs previously opposed to the deal – members of the so-called ‘Aer Lingus Eight’ – said they will now vote in its favour following the significantly revised offer.

The change of heart came after senior Coalition figures spent a significant period yesterday reassuring Labour deputies that their demands were being met.

Labour TD for Dublin North East Sean Kenny said it was “a better deal” than previously hoped for and that the pledges around jobs would be significant for the North Dublin area.

Labour TD for Dublin North Brendan Ryan said he understood that the bulk of his colleagues’ concerns had been adequately addressed. He said he had some outstanding reservations on assurances to the airline’s workers.

Tanaiste Joan Burton’s spokesman said she was pleased with the “significantly improved offer” that “comprehensively” addressed concerns put down in a Labour Party motion at its national conference.

“The deal protects connectivity, jobs and includes long-term plans for growth,” he said.

“Particularly important is the agreement by Aer Lingus to sign up to a registered employment agreement to ensure existing terms and conditions of workers are fully protected.”

Impact spokesman Niall Shannon, whose union represents 2,000 Aer Lingus workers, said there “many unanswered questions” which were of “grave concern” to his members.

Meanwhile in Fine Gael, a number of deputies who previously voiced concerns about the sale said the deal appeared to have serious merits.

“The figures released by Cabinet would suggest this proposal has enormously positive benefits for Dublin airport, Dublin itself and Ireland as a whole,” Dublin North TD Alan Farrell said.Mr Farrell.

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