To ask the Minister for Transport when he expects to bring proposals for the future of Aer Lingus to the Cabinet; the extent and nature of consultations between his Department and the Aer Lingus Board on this issue; the contents of the Report given to him by the CEO and Chairman in September 2003; and if he will make a statement on the matter.
- Willie Penrose. (Nominated by: Róisín Shortall).
For ORAL answer on Tuesday, 2nd March, 2004.
Ref No: 6782/04 Lottery: 19 Proof: 127
To ask the Minister for Transport his plans for the future of Aer Lingus; and if he will make a statement on the matter.
- Bernard J. Durkan.
For WRITTEN answer on Tuesday, 2nd March, 2004.
Ref No: 7043/04
Answered by Minister for Transport
I propose to take questions 129 and 361 together.
In the light of the continuing turnaround in Aer Lingus performance, last July, I asked the Chairman of Aer Lingus to examine and report back to me on future options for the Company. The Chairman furnished his report to me at a meeting on 16 September 2003. In summary, having taken account of the Government decision in 2001 to facilitate private sector as well as staff investment in the airline, the Report concluded that:-
- Given the performance of the airline, improving investment market conditions and increasing airline valuations in a traditionally volatile sector, the Companys view is that the private sector investment process should be initiated without delay;
- The process would coincide with the completion of the ESOP and the issuance of 30.5 million shares to the ESOT to increase the employee shareholding from 4.76% to 14.9%;
- Of the five strategic options evaluated, the Companys view is that the best option is a two phased approach with phase 1 involving a Private Placement to institutional investors (i.e. pension funds, etc.) followed by an IPO within 18 months to 2 years;
Following receipt of that Report, I engaged an independent Corporate Finance Consultant to examine the sale options contained in that Report, the views expressed by analysts and the transparency and accountability requirements when disposing of a State asset. The Consultant broadly supported the case made in the Aer Lingus Report for a two phased approach involving a Private placement followed by an IPO.
I consider the Aer Lingus Report and the independent consultants report to be an important input into my deliberations on the future options for the airline. When all the matters have been fully considered, I will be bringing specific proposals to Government.