Dáil Éireann - Volume 577 - 12 December, 2003

Aer Lingus Bill 2003: Second Stage (Resumed).

  Question again proposed: “That the Bill be now read a Second Time.”

  Aengus Ó Snodaigh:Ba mhaith liom buíochas a ghabháil leis an Cheann Comhairle as ucht deis a thabhairt dom labhairt ar an Bhille seo. Is fíor nach bhfuil sé cosúil le Billí eile ar chuir mé fáilte rompu le déanaí. Tá dhá rud i gceist sa Bhille seo. Tá sé ag déileáil le scaradh na ndaoine atá fostaithe ag Aer Lingus. Chomh maith leis sin, tá sé i gceist deis a thabhairt don Rialtas Aer Lingus a dhíol do dhaoine agus chomhlachtaí príomháideacha. Is trua é go bhfuil an Rialtas ag dul síos an treo sin. Tá sé scanallach go bhfuil an tAire ag cur leis na ráitis atá déanta aige le tamall anuas. Tá sé ag iarraidh fáil réidh le hAer Lingus as portfolio an Rialtais.

  Níl mé sásta cuidiú nó tacú leis an bpríomháidiú seo atá á dhéanamh ag an Rialtas ar chomhlachtaí Stáit. Glacaim leis go bhfuil gá le scaradh. Ba chóir go ndéanfadh an Rialtas admháil go bhfuil an fhoireann tar éis athrú iomlán a dhéanamh ar Aer Lingus. Níl mé sásta glacadh leis an Bhille seo, áfach, mar go bhfuil sé mar chuid den ionsaí ar chomhlachtaí Stáit, atá tar éis a lán airgid a thabhairt don chiste Stáit chun go mbeimid in ann maireachtáil go dtí seo. Smaoinigh ar an méid airgid atá curtha isteach sa chóras Stáit ó bunaíodh iad. Chomh luath agus atá fadhb éigin ann, nó a fheiceann an Rialtas go bhfuil, fiú, brabach le fáil as seo, tá sé ag iarraidh é a dhíol.

  I cannot agree with the purpose of this Bill. I have no problem with the first part of it, which relates to the employee share ownership plan. Those who have turned around Aer Lingus by working non-stop deserve recognition and reward for Aer Lingus's miraculous recovery. Aer Lingus and its associated companies have contributed to the Exchequer, ensured that we have had a national airline over the years to provide for the tourism industry and contributed to the economic recovery and boom in recent years.

[270]  I will not support a move towards privatisation. We should not allow the private sector to acquire a controlling interest in a State company. The State should not be allowed to sell the family treasures, but that is what the Minister intends to do to Aer Lingus and other companies in the long run. It is an absolute disgrace. It does not augur well for the future. We should ensure that public services are retained. I accept that there is a need for greater efficiency and modernisation, but the staff of Aer Lingus have shown that they are well capable of modernising. The fact that they have turned around the company in such a short time is a miracle. It is a testament to the Aer Lingus workers.

  Mr. F. McGrath:Hear, hear.

  Aengus Ó Snodaigh:The Minister has said it is a good idea to split Aer Rianta in three. The private sector will not be interested in acquiring Aer Rianta if has been divided in such a manner. Will Aer Lingus be based in three places even though it is a separate company? Will there be a Shannon Airport Aer Lingus and a Cork Airport Aer Lingus? The issues of Aer Lingus and Aer Rianta are linked and have been from day one. They are not tied as a company, but they are tied because airports have been the backbone of the growth of Aer Lingus. The two companies have worked well together.

  If we allow the sale to go ahead, we will lose something that is vital for this country, as an island nation, to have and to control. If one wants, one can allow other players into the Irish market. We have already allowed other companies to use our airports, etc. Many people have cited the example of Ryanair, but that should not detract from the fact that an island nation needs a national airline. The Minister is preparing the way for privatisation. That, in itself, is wrong. It is based on a right-wing, short-term ideology. It should be rejected out of hand.

  If one examines this Bill and the Minister's other pronouncements, one will find that they have all been disastrous. The enactment of this Bill will be a disaster in the long-term. The Minister's plans for Aer Rianta, the Red Cow roundabout and the Dublin Port tunnel have been disastrous. It has emerged today that his idiotic plans for the M50 at Carrickmines are equally disastrous. The Minister is not listening to the people. He should listen to those who are experts in this field because they understand where the future of the country lies. Does the Minister want to turn this country into a limited company? Why not sell off the Parliament and privatise the ushers outside? Let us not have them as public servants.

  Mr. F. McGrath:The Minister agrees with the Deputy.

  Aengus Ó Snodaigh:He might well agree. However, he should come out and say that he [271]wants to privatise everything, including the prisons.

  Mr. P. Breen:The Deputy's party would have poor share options.

  Aengus Ó Snodaigh:We are growing. We have potential, having turned matters around. It is Fine Gael which has poor share options, since it is going backwards.

  We have seen one disaster after another. There is the current battle at Carrickmines, and an EU report mentioned on RTE last night criticised the basis of the EPA report. That was another debacle where we must wait until we eventually come to the reasonable position of going around Carrickmines Castle. It has been shown that it can be done.

  In this case, Aer Lingus has shown that it is capable of being run as a public company. It can be profitable and yet, at the same time, ensure that its employees and stakeholders benefit. If the Minister sells it off, we will not be stakeholders and will have no control. The workers will suffer in the long run. All other airlines, which are private companies, do not have the State to look after their needs. There has been major criticism of the other model that the Government seems to be moving towards, that of Ryanair, which does not recognise unions and whose employees must work long hours. There is much more in the standards and working conditions. Pilots, hostesses and other employees have complained, and that is why we have had a major strike in Ryanair.

  The ethos and raison d'être is to look after number one. In Ryanair's case, that is Michael O'Leary and its shareholders. In the case of Aer Lingus, and other public companies, it the public interest. That can sometimes mean that it will be unprofitable one year and profitable the next. I cannot figure out the logic of the Minister's idea that we, as an island nation, should sell off one of the ways in which we can get off this island and attract tourists to it. It is a brand name that is known and supported by Irish people abroad specifically because it is an Irish company owned and benefiting the State and the Exchequer. If the Minister sells it off, they will go to every other airline. Many people in Ireland prefer to use Aer Lingus on that basis. If it is no longer a State company, they will switch, and we will lose it, since the company will collapse, with ramifications for those working for it.

  I appeal to the Minister to ensure that the company remains in public hands and that we recognise the great strides taken by Aer Lingus's workers in turning around a loss of €139 million in 2001 to a profit last year. We are selling off a profitable company which will probably make a greater profit again this year. The predictions are great for the coming years, yet we are selling off a company that can pay into the Exchequer on an ongoing basis. It is not the once-off treasure trove that the Minister, Deputy McCreevy, would [272]love. Retaining the company will ensure that we benefit in the longterm. The company has triumphed at a time when others collapsed and went to the wall. The organ grinders in this Government, the Progressive Democrats, are telling us that the public sector is not efficient. Aer Lingus is proof that it is efficient and can remain so.

  The truth is that those in the public sector are the people who have built up Ireland and, though they deserve their rewards, have not been getting them. That is one of the stark results of the Celtic Tiger which we can see absolutely blatantly. The workers have not benefited to the same degree as the bosses. However, in this case workers who have not benefited so far will not do so in the long run. I concede that the Minister is introducing measures to allow them to benefit through the employee share ownership plan. However, in the long-term they will lose out because, if the Government has its way, the company will no longer be in public hands.

  It is all part of the Minister's transportation plan. He wants to privatise everything and ensure that transport is not in public hands. He wants to privatise Dublin Bus and the roads, and that is why we have tolls everywhere, with more planned. He will probably impose another toll on the port tunnel when it is open. He wants to privatise Aer Lingus and Aer Rianta – the whole lot. As I said, why not privatise this building, bring in Michael O'Leary and let him run the Government? That seems to be what is happening in the background.

  Where is the logic in selling this off? The Dublin Government is selling off something. Another Government might see that it is a profitable company and decide to take it. I can envisage the Belgians or even the British Government deciding that, since Aer Lingus is a profitable brand name, they should take it over. Then another state would be running our State airline. That is ridiculous for a small country dependent on air and sea transport. We do not even have the latter any more. We have no national State ferry line.

  All this is sold to us as part of EU negotiations. We are told that we must open the market. We can do that without opening the coffers to sell off our valuables and family treasure. Aer Lingus and the related transport organisations, CIE and Aer Rianta, are the family treasure. They have worked well for us in the past and can again in the future with a little modernisation and more efficient methods to deliver the service for which they have been set up.

  The Minister is planning in this Bill to “facilitate any private sector investment process in the event that the Government embarks on such a process”. I hope it will never embark on that, but knowing the Progressive Democrats, who control this Government, it will embark on it as soon as the Bill is passed. I cannot envisage the Minister, who has accepted their philosophy en bloc, waiting around too long. To what other airline is he planning to sell it? Which investors has he lined up? There are none, because it is an ill-thought-[273]out plan, and we should not be taking this path. I appeal to him to take the national interest to heart and ensure that our interests and those of future generations are protected. That is what we are talking about here.

  If we sell this off, we will have lost out. We sold off our telephone system, and we now have absolutely no control over the delivery of telecommunications. We cannot say to Éircom, Vodafone or whomever else that they must provide a better service in the west, for example, since the system is no longer in State hands. We must go through a regulator and make an appeal. The companies can then counter appeal. We do not control them any more. If we control State and public companies, we can at least have an input on their future plans. They can be tied to the future development of the country and the spatial strategy, if the Government has not totally rejected it.

  If Aer Lingus is privatised, who will fly Ministers back and forth to decentralised locations? Will either Padraig Ó Ceidigh and Aer Arann or Ryanair put on such flights? Perhaps Michael O' Leary will put on special flights from Knock Airport for the Minister for Community, Rural and Gaeltacht Affairs or a special flight for the Minister for Arts, Sport and Tourism from Kerry as a token of gratitude because companies such as Ryanair could bid for Aer Lingus, which it does not respect, and drive it into the ground. In return for this opportunity, perhaps Michael O' Leary will fly Ministers back and forth to the locations which have been chosen for decentralisation. For instance, I am sure Foras na Gaeilge would love an airport in Gweedore.

  There is no logic to recent Government decisions, including those on decentralisation. The spatial strategy has been turned on its head and, in this case, the Government is turning logic on its head by selling off a profitable company which could benefit people in the long-term and ensure Irish interests are protected.

  Ba mhaith liom ceist eile a ardú agus rá le Páirtí an Lucht Oibre gur chóir dó díriú ar bhunreacht nua na hEorpa agus, go díreach, na himpleachtaí maidir le comórtas a thabhairt isteach in áiteanna agus earnálacha eile ar nós sláinte agus oideachais. Sin cuid de bhealach an Rialtais seo agus an Rialtais roimhe. Tá siad tar éis an príobháidiú a thabhairt isteach trí rá go bhfuil gá leis tarlú toisc go bhfuil an tAontas Eorpach a rá linn go gcaithfimid é seo agus é siud a dhéanamh. Ní ghlacaim leis sin. Measaim gur chóir do leithéidí Pháirtí an Lucht Oibre féachaint air seo go dian agus seasamh suas i gcoinne a leithéid de chonradh atá á phlé faoi láthair. Sa deireadh thiar thall, is oibrithe a bheidh thíos leis. Sa chás seo, is oibrithe a bheidh thíos má chuireann an tAire an Bille um Aer Lingus tríd an Dáil.

  Tacaím go hiomlán leis na ceardchumainn nuair a chuireann siad i gcoinne príobháidithe agus phlean iomlán an Rialtais. Sa chás seo, tá sé ag pleanáil Aer Lingus a phríobháidiú. Impím ar na ceardchumainn brú a chur ar an Rialtas gan [274]dul ar aghaidh leis an mBille seo, agus an dá rud sa Bhille a scaradh ó chéile le dhá Bhille a dhéanamh de – Bille amháin mar gheall ar na scaireanna, agus, má tá an tAire ag iarraidh dul ar aghaidh leis an bpríobháidiu in ainneoin an ghearáin atá déanta agam, Bille eile dó sin. Ba cheart dó bheith ina Bhille iomlán difriúil. Le fada tá mé i bhfabhar tacú leo siúd a rinne an comhlacht seo a atógáil ón bhun suas. Tá mé ag iarraidh gur féidir leo buntáiste éigin a bhaint as an obair ar fad a rinne siad le cúpla bliain anuas. Aontaím leis an chuid sin den Bhille. Impím ar an Aire an dá chuid den Bhille a scaradh ó chéile agus dul ar aghaidh le dhá Bhille, ceann amháin do na scaireanna, agus an ceann eile don bpríobháidiú. Beidh argóint cheart againn ar an bpríobháidiú, agus tá súil agam nach nglacfar leis sin.

  Mr. Coveney:I welcome the opportunity to speak on the Bill, not having expected to do so. I am glad to see the Minister, who is obviously hoping the debate will end relatively soon because there has already been a great deal of discussion on the Bill.

  The purpose of the Bill is threefold. First, it proposes to give effect to the employee share ownership plan within Aer Lingus, which has been agreed by the Government and the Aer Lingus unions. Second, it will facilitate any private sector investment process which the Government may wish to follow, depending on policy. Third, it will establish a new pension scheme in Aer Lingus.

  A key section of the Bill is section 3, which facilitates the Minister, should he decide to sell off part of the State's interest in the State airline. Section 4 deals with facilitating the issuing of new shares. Sections 6 and 7 relate to ensuring that the ESOP is represented on the Aer Lingus board and facilitate the establishment of employee shareholding schemes themselves.

  I wish to address the concept of selling-off all or part of the State's interest in Aer Lingus, the ESOP or ESOT idea and how it has been successful in other companies such as Eircom, in regard to which we made some mistakes. The ESOT is an example of good policy which has worked well for those involved. I also wish to make some general comments on Cork Airport, Aer Lingus's involvement there and its future and how the company has transformed itself under a new management mindset.

  There are a number of dangers associated with the selling-off of Aer Lingus. The Minister knows that Fine Gael does not have a problem with the philosophy of privatisation. However, when one considers privatising a company like Aer Lingus, a significant number of issues need to be debated carefully. The Fine Gael spokesperson on transport, Deputy Naughten, has on numerous occasions called for a White Paper on Aer Lingus to map out its short, medium and long-term future as the Government sees it. Without a White Paper, any plans to privatise Aer Lingus will be viewed with a sceptical eye as a way for [275]the Government to use the company as a cash cow, offering the Exchequer a significant opportunity to gain revenue on a one-off basis. This would be a mistake.

  If the Minister hopes to privatise Aer Lingus and gain the support of the largest Opposition party, he will need to map out his strategy surrounding that process in a detailed manner. I do not have a problem with the ideology of privatisation, but in Aer Lingus's case we are dealing with a company with much pride whose logo has been carried by aircraft as flagships for Irish people and Irishness. We must be careful how we map out its future. The logo on Aer Lingus aircraft is precious to Irish people living in New York, Boston and other cities across the US, as well as other countries. A considerable number of Irish people living abroad have a great attachment to Aer Lingus as a symbol of the journey between Ireland and their new homes. This should not be dismissed as emotional nonsense because it is more than that.

  One of the more practical concerns which needs to be taken into account in the White Paper revolves around the slots retained by Aer Lingus at Heathrow. These are extremely valuable and if Aer Lingus were to lose them we might not be able to get them back. It is crucial that the number of slots held by Aer Lingus at Heathrow for flights to and from Dublin, Cork and Shannon be maintained. People too often refer to the mistakes made during the privatisation of Eircom. In this instance, however, a parallel exists. When we sold Eircom, we unfortunately also sold the physical infrastructure that existed across the country. As a result, we are struggling to roll out broadband. The process in this regard would have been much easier if the State had retained the physical infrastructure to which I refer. It is important, therefore, that we should not lose what I consider to be a national asset, namely, our slots at Heathrow through the sale of Aer Lingus.

  We must also consider the role of Aer Lingus in the future. Do we want the Government, on behalf of the people, to have an interest in the State airline? Is it vital that we should have a shareholding in Aer Lingus and, therefore, be in a position to exert influence over its policies? Is this required, for example, in respect of regional development? Under its plans for decentralisation, the Government has made a clear statement that it is beginning to take seriously the concept of developing the regions. If we follow through on that logic, there surely must be a need to provide air links to the different regions. Would the State airline not have a role to play in that regard? I would be sceptical as to whether Aer Lingus would continue to provide its various regional services in the future if a ministerial shareholding in the company did not exist.

  I wish to deal now with the concept of the employee share ownership plan. The Govern[276]ment and the Aer Lingus unions did a good day's work when they managed to agree an acceptable ESOP arrangement for the staff. There are many good examples of ESOPs, but I am most familiar, due to the nature of the brief I hold, with that of Eircom, which has been a phenomenal success for its members. The staff of Eircom have a 30% shareholding, making them the largest shareholders in the Valentia Group which runs and owns Eircom. The members of the Eircom ESOP have received substantial cash returns as a result of part of that shareholding being cashed in. There are two staff directors on the board of directors, the total membership of which is 11, which means that the staff have a significant influence on the direction the company is taking. They have set out a 20-year plan which offers real stability for Eircom going forward. I suspect there will be major changes in Eircom and the nature of its ownership and shareholders during the next 12 months. However, there will be no change in the consistent approach the ESOP takes towards the company. That approach offers the kind of stability a company of that importance to Ireland needs.

  The Eircom ESOP is the largest single Irish investor in our telecommunications industry. I obviously exclude Vodafone from this as it is not, as such, an Irish company. The Eircom ESOP is a successful model which began when the company was State owned and which has continued since it was privatised, surviving all the mistakes made during that process. It has emerged on the other side stronger, able to offer real value to its members and with the power to influence, in a significant way, the future direction and policies of Eircom.

  One can see the potential value of trying to transpose that model to a company such as Aer Lingus. If we make the strategic decision to privatise Aer Lingus the future – I am not stating that Fine Gael either favours or is opposed to it at present because we are not willing to decide until the White Paper emerges – the ESOP model used in Eircom, if it were to be adopted in a similar way in the national airline, could offer real and measurable returns for its members. This model does not merely represent the unions, nor does it, as such, represent the company; it is concerned with the interests and shareholdings of its members. It introduces a new way of negotiating between unions and management within a company and offers a new and viable option for a company such as Aer Lingus, which needs to improve efficiencies in order to face up to competitors that have entered the Irish market in an aggressive way, primarily through offering low fares.

  I wish to comment now on some of the changes that have occurred in Aer Lingus recently. The past 12 months have been phenomenally successful for Willie Walsh and his crew at Aer Lingus. Significant changes have been made, leading to a great deal of pain for some of the staff and unions. However, management, staff and unions [277]have managed to move forward together in order to ensure that Aer Lingus has a future. Only last year, the idea of selling Aer Lingus would have been rubbished because the company, which seemed for a number of months to have a bleak future, was not worth very much. Now, however, it is extremely healthy, making profits, has a bright future, is ambitious and is worth a considerable amount of money. It is important to record our recognition of the efforts of those involved and the change in the company's fortunes. If the Minister has assisted that process, his contribution must also be recognised.

  I am concerned, however, about a number of the decisions that have been made. The first of these is the discontinuation of the service between Cork and Dublin, which is a mistake. I am regularly informed that flying from Cork to Dublin is not viable. However, I fly that route regularly and the aircraft on which I travel are nearly always full. This decision, under which Aer Lingus is giving its slots to Aer Arann, is not positive. I am not stating that Aer Arann is not positive in its outlook because the opposite is clearly the case.

  It is unhealthy that only one airline carries people between Cork and Dublin, Ireland's first and second cities. As a person who believes in the benefits of competition, I would like to see Aer Arann and Aer Lingus competing on the Cork-Dublin route, as opposed to a cosy arrangement whereby Aer Lingus would hand over its passengers on that route to Aer Arann. There is a great deal of concern about the unavailability of jet planes on the Cork-Dublin route. Cork people are now forced to fly on propeller planes which, while adequate, do not provide choice. The way to offer choice and good value for money on that route is through competition.

  I hope companies like Jetmagic, Ryanair and others will consider competing with Aer Arann on that route, given Aer Lingus's clear indications that it will not be willing to do so in the future. That is an example of what could occur if Aer Lingus operated solely from a profits mindset and without the influence of ministerial policy.

  Aer Lingus, by and large, achieved its success in the past 12 months through the introduction of lower fares. It is currently operating on a competitive basis with Ryanair. It has significantly upgraded its website and its levels of communications and marketing have also improved. The new mindset in Aer Lingus has transformed the company. The willingness of unions to accept that transformation has been extremely helpful.

  Cork city has a population of more than 200,000 people and serves a region of approximately one million people. It is unacceptable that it still does not have a transatlantic route. A person from Cork, Ireland's second city, wishing to fly to the US is required to drive to Shannon Airport or fly to Dublin, fly back to Shannon and then fly across the Atlantic. That must change. While I support the viability of Shannon into the future, that does not mean we cannot facilitate a [278]transatlantic route from Cork through minor runway alterations and so on.

  This Bill deals with an ESOP, of which I am supportive, and the potential for privatisation of Aer Lingus. The Minister must produce a White Paper which maps out how he and the Government view Aer Lingus in the short, medium and long-term in the context of its being a flagship company and an ambassador for Ireland in the sky and in other countries, thus ensuring the value to ‘Ireland Incorporated' is not damaged. We must not think about this in the short-term as a means of putting significant funds into the national Exchequer in the build up, for example, to an election and then, four or five years later, regretting the decision. That must not happen.

  If the Minister for Transport is to obtain Fine Gael's support on privatisation of Aer Lingus, we must be reassured, by way of a detailed White Paper which can be debated at length, that we are not making a mistake which the country will regret in three, five or ten years' time.

  Mr. Durkan:I am grateful for the opportunity to speak on this Bill. It is not harmful to review Aer Lingus's performance and to congratulate its management and staff on their tremendous efforts in the past couple of years resulting in the company's return to profit. If a point needed proving, it has been. Notwithstanding Aer Lingus's losses in previous years for a variety of reasons, when the decision was made to turn the ship, or the plane in this case, and to become efficient, effective and competitive, it was possible to do so.

  In those circumstances, it is not harmful to review where Aer Lingus stood some years ago and the destination at which it has now arrived – no pun intended. I remember when air fares were, to say the least, prohibitive and when it cost the guts of one's salary for a round trip from Ireland to the United Kingdom. It was said at the time that air fares could not be reduced, but it was possible to reduce them. Ryanair forced everybody to focus on that issue. There must be strong competition if we are to obtain the best from public and private companies. There must also be a willingness to serve the consumer and not those participating in this area, Aer Lingus, Aer Rianta and so on. I will come back to that issue in a few moments.

  Everyone involved must be willing to serve the consumer to the best of their ability. We must consider the rate of increase in air fares, their upward trajectory in the past 20 years and the level at which they might now be but for competition. That illustrates the way things could have gone and causes one to wonder if the companies would have been any more profitable. I doubt it because lack of competition would have made them lethargic in their application to consumer needs and nobody would have gained. The lesson to be learnt is the degree to which competition has benefited the consumer and those companies providing the service. Aer Lingus must be cred[279]ited for turning the company around, making it profitable and responsive to consumer needs and in making it a major player in its field.

  As Deputy Coveney said earlier, it is not harmful at this time to consider the future of Aer Lingus. I recognise that, during the drafting of this Bill, a great deal of effort and energy was spent in dealing with unions and management and in recognising the share options likely to be and required to be available. Notwithstanding all that, we cannot proceed in this regard without support from the consumer or without the benefit of the competition which currently exists in the marketplace.

  The flotation of Eircom and its subsequent sale has left a question mark over issues such as privatisation and competition. I know Members on the Government side will say it was a successful sale from the Government's point of view, but it was not successful for the consumer or the casual investor. The casual investor wants to make a patriotic contribution to the national economy and does so willingly. However, the casual investor does not like to be walked into a position where, having bought shares, he or she is then told that it has become expedient to sell the shares at a prearranged price, not necessarily the price paid for them. While it may turn out well for Eircom, it is not good for the future public purchase of shares in major national companies. We must be careful that we do not go down this road again as the dictum “Once bitten, twice shy” applies. Whatever the benefits to those who made profits, the consequences for those who lost money are highly suspect and they will be careful to avoid a recurrence.

  Having met with and recognised the needs of both the unions and the company, the Government must be aware that other needs must also be met. Failure to do so could cause irreparable damage, not only to Aer Lingus and its ancillary services, but to the trust of the people in the economy. This must be borne in mind at all times.

  I know the long-term plans for Aer Lingus and that there are divided views on the airline, Aer Rianta and associated bodies. We live in changing times. Airline companies cannot operate without ground services. Whatever the future holds for Aer Rianta, the company will have a bearing on the airlines using Irish airports. I think of a point raised with me by a holidaymaker who left Dublin Airport this summer. Due to excessive traffic, this person got to the airport a little late and had to park in the short-term car park. On returning seven days later, he found that the car park fees were almost as great as the cost of the holiday. Surely this cannot go on. While the Minister and I know that car parking in Ireland is expensive, the most expensive car parking in the world must be found around Dublin Airport.

  It raises serious questions about the competitiveness of our economy in this area. While Aer Lingus can be profit making, if the attendant companies are not equally profit making, con[280]sumer friendly and competitive, then no one will win. In the review of the structures of Aer Lingus, Aer Rianta and other bodies, a clear decision must be made as to their role and function, how they impact on each other, and how they serve the public both individually and collectively. After all, they depend on the public for their existence. We must recognise that it is not all about share options and returns to investors; the consumer is the biggest shareholder of all and has the right to shift business elsewhere if needs are not responded to. While there are few options for people wishing to fly from or to this island, others will provide new options unless existing companies are competitive and responsive to the needs of the consumer.

  We need to innovate and now is the time to do it. It is generally recognised that our public transport services are not immediately responsive to consumer needs. This is not a personal vilification of the Minister. I have concluded that he wears a hard hat most of the time to deflect the darts thrown at him.

  Mr. Naughten:He has a hard neck to go with the hard hat.

  Mr. Durkan:At the Fianna Fáil meeting in Killarney, the Taoiseach said that his party members were becoming thin-skinned and advised on a course to be followed to thicken the skin. This was totally unnecessary as I felt they were doing quite well at the time.

  We must provide an innovative service to the consumer. Why not examine how further services can be provided in the provinces and between the provinces and the capital? Many areas currently have no services, yet cheap and competitive services could easily be provided. If it is possible to fly to Paris for 5 cent, it should be possible to fly from Dublin to Galway or Derry for a reasonably competitive price.

  The Minister and others will tell me that I do not understand this. I know how it operates. I know what would have happened if the rise of the late Jim Mitchell had been halted when as Minister, he encouraged competition in the airline business. This is now benefiting Irish passengers. This is a good time to look at the extent to which travellers in Ireland can be offered competition in the airline sector. There is little competition in this area and Deputy Coveney mentioned that each time he travels with Aer Arran all seats on the aircraft are full. Every other European country has an internal air service with small aircraft regularly flying between cities that are no bigger than the cities here.

  Several regions also have no rail service and a very poor bus service. According to reports, the good people of this city who are in charge of transport do not want motorists to come into the city because they will not be able to find a place to park. If they park where they should not and leave their cars in that position for too long, they could be clamped. If clamped, they must pay [281]heavily to have it released, if they are lucky to get it released. In such circumstances it behoves us to examine how best to serve the needs of these consumers. It is high time we did so and it is possible. A fair effort must be made at examining alternatives to motor transport for those who wish to travel to and from the capital city on a daily basis.

  People say we should park our cars somewhere. If we knew where to park them we could do so.

  An Ceann Comhairle:I am not sure that arises from this legislation.

  Mr. Durkan:It does because I am talking about the alternatives—

  Mr. Naughten:It is making flights more expensive.

  Mr. Durkan:It is. I am also trying to point out ways in which we can provide alternatives. One cannot fly one's car into the air and therefore one has to have a place to park it at an airport. I already mentioned the cost to one unfortunate traveller for parking his car at a certain airport. I doubt if he will again park it car in such a manner.

  As a mere user of the airlines, roads and various other forms of transport, I believe it is no harm to examine the options and recognise that whatever changes we make should be made not only for the benefit of the companies involved but also the consumer, in whose hands the future of the airline companies rests. The consumers can vote with their feet and bring their business elsewhere if necessary.

  The explanatory memorandum to the Bill states:

    Section 3 provides that the Minister for Finance may sell, exchange or dispose of his/her shares in Aer Lingus Group public limited company. The Minister for Finance is the major shareholder in the airline. Provision is also made that any funds received in respect of the sale or disposal of the State's shareholding in Aer Lingus will be paid into and disposed of for the benefit of the Exchequer.

I am sure this is the intention, and I am sure the same applied in respect of the Eircom shares. However, I have serious doubts about the extent to which the sale of Eircom benefited the Exchequer or those who bought shares in the company. I reject any assertion to the contrary. A repeat of the performance in respect of Eircom will lead us nowhere except into sadness. The Minister should bear in mind that the Eircom experience is not the best one to use as a rule of thumb in this area.

  I referred earlier to the employee share ownership plan, regarding which the Government and Aer Lingus have already come to an agreement with the unions. This is fine. However, it must [282]also be borne in mind that those who are likely to use the services of the airline also need to be satisfied.

  Section 5 provides enabling powers to facilitate a sale of all or part of the State's shareholding in Aer Lingus. Appropriate provisions are made to enable the Minister for Finance to enter one or more agreements in connection with the sale of the shares in the company, including customary provisions contained in a shareholders' or underwriting agreement as the Minister may wish. The Minister will have to recognise the extent to which approval, or otherwise, may be granted for his proposals in this House. There must be a clear recognition that he and his successors do not have a carte blanche to continue acting according to their whims ad infinitum. This is because the good of the company and country are at stake, as well as the good name of the process embarked upon.

  I had intended to deal with the private sector in this area but time does not permit. Ryanair is the major mover in the private sector and it has suggested that it can provide services at a much more competitive rate. It may well be that we do not necessarily agree with all it says and does, but if the opportunity arises we need to examine what it has to offer, how it proposes to make such an offer and the impact its proposals will have on the airline industry and the economy in general.

  Mr. Timmins:I am delighted to have the opportunity to speak on this very important Bill. When we hear the name “Aer Lingus” we automatically think of Ryanair, the cost of fares to London ten or 15 years ago, which amounted to £200 or £300, and of how things have changed radically. It is important to acknowledge the role Ryanair has played in ensuring that Aer Lingus has become more efficient.

  I welcome the broad thrust of the Bill although, as the Minister is aware, Fine Gael has some difficulties with it. These may be more to do with a lack of clarification than anything else. I particularly welcome the concept of share options. Although this country is relatively young, it has many State bodies. In the initial stages people may have been motivated by patriotism, which may have been diluted in recent years. It is a fact of life – maybe it was always this way – that money is king and that if people feel they can benefit economically from their work, they will work more efficiently. It must be acknowledged that Aer Lingus has turned around in the past 18 months and one has to commend its workers for their effort. They should be rewarded accordingly. Almost all State bodies should go down this track. The day of State bodies being top heavy and representing a cost to the Exchequer is nearing an end. It is important to realise that the taxpayer ultimately pays for such bodies.

  It is not a function of any arm of State to provide employment to the public. The use of many [283]State institutions as employment stores in the years before the last general election imposed a pressure on the public finances. Employees should have been taken on only to improve efficiency or because of an increasing workload.

  I welcome the concept of the share options, which has worked well in other companies. I hope it will maintain the momentum towards greater efficiency in Aer Lingus. The airline is now competing with airlines with low-cost fares and its website has been upgraded. I was on an Aer Lingus flight during the week and its staff were most efficient and tried to make me feel at home. They let me know where I could get the best deal, etc.

  The main provision of the Bill is to give the Minister the authority to privatise Aer Lingus. I do not have great difficulty with the concept of privatisation but there are certain pitfalls to be considered. The main pitfall for Fine Gael arises from the party's concern that the concept has not been explored as fully as it should have been. Deputy Naughten has tabled an amendment to the effect that, prior to the publication of a White Paper on the privatisation of Aer Lingus, Dáil Éireann declines to give a Second Reading to the Bill. He said we will not agree to this part of the Bill, which means we will not agree to the overall Bill, until the publication of a White Paper on the issue.

  Air transport is similar to rail transport 20 or 30 years ago. All one has to do is go to Dublin Airport to see how busy it is. A generation ago it was unique for people to travel by air but nowadays people go to New York for the weekend to do their Christmas shopping, or back and forward to the Continent with no difficulty. The concept of the honeymoon in Blackpool is long gone, as people head off to the Seychelles and the Cayman Islands. The danger is that Aer Lingus has many lucrative slots in Heathrow. Is it possible that the company could be bought just to use those lucrative Heathrow slots, with Ireland becoming a secondary destination? Transatlantic travel could be aimed at Heathrow and central Europe, leaving us out on a limb with consequent losses. We have an important geographical location, as evidenced by the request of the Americans to use Shannon in the Iraq war, which should be borne in mind. As air travel becomes more frequent our position should become more attractive.

  The Bill also deals with pensions and it is very important to get that right. I have seen the difficulties in my constituency with IFI in Arklow, where there has been much contention about pension rights. Most employees pay into a pension fund but very few people, apart from those directly involved in its administration, are aware of how the pension system operates. This is a failing we all have. If I lost my seat in the next election and I was then asked about my pension [284]rights, I would be unclear and so would many other Members. The new criteria for State pensions were outlined in the budget and that drives home to us how little time we have. We all think we will go on forever and we do not put an emphasis on looking at our pensions. It might be something of which the Ceann Comhairle is aware, but I am not that familiar with it.

  Deputy Durkan spoke about car parking fees and €20 per day for parking is over the top. I cannot recall many new car parks being built in Dublin Airport. It is not as if the fees go towards any loans, as I assume those car parks are long paid for and, by today's standards, they were not that expensive to build in the first place. It is prohibitive to pay that money for short-term parking and I also have concerns about the long-term parking system, where items in cars may not be that safe as those car parks are virtually impossible to police.

  I was coming in from the airport on Wednesday night and though I am very familiar with the road, I missed my turn off the M50 for the Naas Road because of roadworks. I know road signage is an issue close to the Minister's heart. We must look at the signage around Dublin Airport, because the situation is chaotic when one is coming out of it on a winter's evening. One is driving on a wing and a prayer because one does not know where to turn off.

  The Minister will be aware that there are discussions in the EU about pilot flying hours, which are probably the equivalent of the Hanly report on doctors' working hours. It is probably easier for a pilot to fly an aircraft than to drive a car but it is important that they have adequate rest times. Where I live in Wicklow there is a continuous stream of aircraft overhead and one evening last week while I was looking at the vapour trails overhead I saw a sudden dip as one aircraft avoided another. We often hear about near misses and I thought of inquiring whether there was a near miss. One aircraft was coming from the east and one from the west and one could see the sudden dip in the trail of one aircraft. The work of air traffic controllers amazes me. It is a very stressful job and they are to be complimented. However, we should be aware of the health and safety issues associated with that job.

  Regarding regionalisation, it is important to have balanced growth. I am told there is no such thing as the Shannon stopover but I was watching the television recently and my son, who is nine, asked me to explain the Shannon stopover when it was mentioned. I explained it to him as best I could but when he asked me why it was done I could not explain it. I am told it is not an automatic stopover any more and perhaps the Minister will tell me what it is called now. Those in Shannon would argue that the stopover is in Dublin but it is important that those on transatlantic flights, Americans or those from the west of [285]Ireland, have the option of landing in Shannon. For many people in the greater Dublin area it might be quicker to land in Shannon and drive to one's destination than it is at present to land in Dublin. It took me two hours to travel 38 miles yesterday morning and I fear for what my penalty points would be had a garda followed me.

  I agree with the general thrust of the Bill. Our society has changed and the new generation is progressive. Despite the vitriol we may heap on them on occasion, our civil servants are also progressive. On occasion people may hanker back to keeping things the same but we must evolve with time and often society itself evolves much quicker than its institutions. If things do not work out we can always go back to this but it is important to change. I welcome the broad thrust of the Bill but we have a major difficulty with buying a pig in a poke, so to speak, and we would like to see a White Paper before the Minister makes definitive plans to sell the airline.

  Mr. J. Breen:I am delighted to speak on this Bill. Any plans by the Minister to sell part of Aer Lingus must be considered carefully and must be looked at in terms of what is best for this island as a whole, not what is best for Aer Lingus as a corporate entity. From a County Clare point of view, they must be looked at in the context of Shannon Airport and the surrounding area.

  Shannon is ideally located as the gateway to the west of Ireland and the local infrastructure is improving. Hopefully the Ennis bypass will start in 2004 and, with a rail link to the airport, it will be an even more inviting destination for tourists and business people. Aer Lingus has been a very successful public enterprise over the years and has benefited from the bilateral agreement, with transatlantic flights becoming the bread and butter of Shannon. There has been a significant knock-on impact on tourism development in the west of Ireland as a whole.

  Unfortunately, the recent rescheduling of flights to Dublin and the lack of a service to mainland Europe from Shannon has had a negative impact on the economy of the region. The establishment of a new board of management for the three airports gives no guarantee to Shannon or Cork and, in light of this Bill, I question Aer Lingus's commitment to the airport, the west and the mid-west.

  If a private company or another airline got its hands on part of Aer Lingus could Shannon kiss Aer Lingus goodbye in the interests of profit margins? That would be to the detriment of the local economy and the development of further tourism and business initiatives. Will Shannon Airport suffer the same fate as Cork Airport given that Aer Lingus discontinued domestic flights to Cork? This cannot be allowed to happen in an area with good prospects for economic growth.

  Aer Lingus may be a small carrier but its brand [286]is synonymous with Ireland. A vibrant national airline is needed and Aer Lingus should remain as an independent carrier within the State structure and should not be sold off piecemeal to private industry. If this is the Minister's intention, he should outline his proposal and give assurances to Shannon and Cork Airports that their viability as tourist destinations will be safeguarded in any deal.

  We in Clare are concerned about Shannon Airport and I hope the Minister will guarantee that the new board will be good for the airport. I encourage the Minister to ensure Shannon Airport is safeguarded in his proposals. He is from the west and will be aware of what the people think of the airport. It is an engine for growth in the area and, without a bilateral agreement, it will be in dire straits. I seek an assurance from the Minister.

  Minister for Transport (Mr. Brennan):I thank the Members who contributed to the debate and I have taken careful note of the issues raised. The Bill marks the conclusion of a traumatic period in the airline's history which centred around the events of 2001 and the survival plan. Following the enactment of the legislation, the Government will have fulfilled it commitment on the increased employee shareholding in exchange for the full implementation of the survival plan. I join Members in complimenting the staff and management on the turnaround in the company.

  I also welcome Members' support for the employee share ownership plan provisions in the legislation which will result in an increase in the overall staff shareholding of up to a limit of 14.9%. The legislation is necessary to give effect to the increase from 5% to 14.9%. However, given the changed fortunes of the airline and its current performance, the 14.9% shareholding represents a valuable stake. This is consistent with Government policy in terms of the stake available to employees in State companies and, depending on the value of the airline, it could be worth between €40 million and €100 million – a considerable amount. These shares will be held privately. When arguing about who owns what, it is important to bear in mind that the workers are in a special position in that they work in the company and generate profits, although they are also private individuals who will own a share in a valuable company. It is not proposed to increase the shareholding beyond 14.9%.

  A new profit share scheme agreed with the company under the ESOP package was also sought by the unions, largely as a means to enable the ESOP to maintain its shareholding at a maximum of 14.9% in the event of the involvement of a third party investor. The ESOP agreement also includes a provision for appropriate consultations with the employee share ownership [287]trust in third party investment negotiations that may occur.

  A number of Members commented on the delay in bringing forward the ESOP legislation. While agreement on the ESOP framework was reached in December 2001, the necessary legal documentation was only concluded in March 2003. There were a number of a reasons for this, including the highly complex nature of ESOPs in general from a legal, technical and administrative point of view. There was also a delay in commencing negotiations because of industrial action taken by pilots in the first half of 2002.

  I thank the Members who welcomed the inclusion of an enabling provision to allow Aer Lingus to establish new pension schemes for its employees and pensioners. I acknowledge the support of the House in this regard. Once the legislation is passed, Aer Lingus will decide when a new pension scheme will be established and the terms of such schemes will be negotiated with the trade unions. The normal arrangements for pension schemes in State bodies must be approved by the Minister for Finance, and that will apply in this case.

  Reference was made to the representations made to the Department on behalf of former employees who hold company pensions, including the campaign by the Retired Aviation Staff Association, about the terms of the existing scheme. Officials from my Department and the Department of the Taoiseach met representatives of RASA on a number of occasions to discuss their concerns. A further meeting took place on 19 October 2003. Unfortunately, there has been no obvious solution to address their concerns, despite detailed examination in recent years. There is no guarantee that their concerns can be addressed in a new scheme but, nevertheless, I will continue to liaise with the company to ascertain whether a solution is possible. I am sympathetic to and understand their position. The company will meet the RASA representatives again soon to discuss these issues. I urge the company to make every effort to resolve this issue to the satisfaction of the pensioners.

  A number of Members also referred to the Aer Lingus proposal to standardise its European fleet, which is the culmination of a highly competitive 15 month process conducted by the company. A detailed business case was submitted to my Department regarding the purchases and I approved the investment proposal. The company is moving to a single aircraft type for non-transatlantic business, and this will result in efficiencies in the system. Aer Lingus is purchasing the aircraft from its own resources. The State is not involved in the transaction nor was it involved in the selection process. My only role, on behalf of the shareholders, was to review the business case put forward by the company on the investment [288]proposals. Aer Lingus advised that offset was not used as an award criterion in the selection process and that it had no relevance to the company.

  Much of the debate focused on sections 3, 4 and 5 which facilitate a sale of all or part of the State's shareholdings in Aer Lingus and the issue of new shares by the company. Contrary to the assertion made by a few Members, no decision has been taken on a sale transaction by Aer Lingus. The Government and I have not made a decision on the timing of such a transaction and I do not have potential investors or buyers lined up or in mind nor have any been contacted. I sought a report from the company on its opinions in this regard. I am studying it and will bring it before the Government as soon as is practicable.

  I assure Deputies that the Government's priority is not one of raising funds for the Exchequer through a possible sale. The issue is one of providing the best future for the airline and how Aer Lingus can best continue to serve the country. I am opposed to approaching the matter as a means of collecting a few bob for the Exchequer.

  I am sympathetic to Fine Gael's suggestion to lay out the arguments and options in detail on paper. We should try to quantify and measure the options and set out in a strategic manner the aviation options facing the company. Fine Gael's request is sensible. I do not want to commit to a White Paper on the subject but I am interested in providing all the information to the House in detail. Many Government Deputies also asked for similar detail to be provided.

  Mr. Naughten:Will it be provided prior to Committee Stage?

  Mr. Brennan:I will think about that. The request to lay out the options before any sale is sensible. If we embark on any such disposal I will give thought to doing that. The arguments and options can be published and discussed.

  My focus since I took office has been to secure the future of Aer Lingus. For almost 18 months I have consistently supported the company in its decisions and efforts to turn the company around. The Government acceded to the company's requests and stood by it in many difficult decisions. I did not and would not interfere with unpopular decisions on route choices because I appreciate that difficult decisions were made to turn the company around. Given the airline's recovery and the new business focus, it is time to look at future options and choices, rather than wait for a downturn or crisis to force our hand.

  I must also take into account the fact that the aviation industry, both globally and nationally, has changed significantly in the past ten years, particularly in Europe. Further and ongoing change is inevitable. Some of this will be driven by developments between the United States and the European Union in their open skies talks. It [289]is the Government's wish that Aer Lingus continues to make a significant and valuable contribution to the country and to tourism, regional and economic development. Everyone must agree it can only do this if it can compete successfully, operate profitably and have access to a variety of funding sources to facilitate its growth.

  The issue the Government must consider is whether Aer Lingus can do this better in the private or public sector and if any vital strategic matters could influence that choice. I will set out those issues another time. It would be negligent not to consider them. We should not forget that twice in the past decade, while in State ownership, the airline has been on the verge of collapse. Given the particular nature of the aviation sector, there are no guarantees for the future.

  Airlines need to have the maximum flexibility to respond to whatever market or other conditions the sector will face. The company may be publicly owned but it operates in a viciously competitive private sector area. My prime objective, despite comments to the contrary made in contributions to the House, is to secure the future of the airline and its contribution to tourism regional development and national economic growth.

  In the interests of airline staff and management who performed so well in turning the company around, it is important that the shareholder clearly signals its intention regarding ownership before too long. It is not in the interests of proper management of the company that continuing uncertainty should hinder future planning. By asking the Government to examine the options, I act in the best interests of the State and Aer Lingus.

  Some Deputies said that EU state aid rules were misrepresented. I do not accept that. Under EU rules the State can seek to invest as a normal shareholder in Aer Lingus, as pointed out by a number of Deputies. It can also be done when the company is making a profit. In such a case there would be opposition from other airlines alleging State aid. There would also likely be an investigation by the European Commission before approval for any such investment would be forthcoming. Such investment is only possible when an airline makes commercial returns.

  It has been Government policy for some time, certainly since 1990, that future funds would not be invested in Aer Lingus, whether in the form of aid or investment. On commercial or responsibility grounds, it would be difficult for Government to justify the injection of scarce Exchequer funds into a profitable Aer Lingus when many other competing priorities depend on State resources. The real problem is that the State cannot invest under EU rules when the airline is in crisis, even if so disposed. Therefore, while the airline remains in State ownership, it must [290]depend on its own resources and funds. I must therefore consider the options carefully.

  The nature of the sector is such that there will always be uncertainties. It is essential that if any opportunities for investment arise, they are considered. Given the near certainty that no Government will buy new shares in a profitable company when there is no need to do so, and that it is forbidden by EU state aid rules to invest in a company in crisis, it is critical we look at the options available now that we have space. Given the history of the airline and the sector, I cannot be complacent on the issue. It is for that reason I asked the company for a report and will report to Government on the matter.

  During this debate Deputies raised concerns about specific strategic issues in the context of a State exit from ownership of Aer Lingus. They are worried that unless Aer Lingus remains in State ownership, the brand and direct links to key markets like the United States will disappear. There are also concerns about the Heathrow slots and the commitment of any new owners to regional development. I share these genuine concerns. Aer Lingus is a strong brand with an equally strong Irish identity. I do not believe that any potential investors, the public or others, would abandon a core market or cease to operate direct services on profitable routes thereby leaving gaps for a competitor to exploit. That would not make commercial or economic sense. If fares are competitive, direct services will always outperform indirect services. I believe the airline will hold on to those direct services as long as they are profitable.

  This concern was raised, particularly with regard to services to and from the United States. While under current bilateral rules only Irish and US airlines can operate on Ireland's US routes, I remind Deputies that an early outcome of the EU-US open skies talks is likely to be an agreement which will recognise the right, as set down by the European Court of Justice, that any European airline may operate services from any Irish airport to the United States.

  The slots at Heathrow are important because apart from Aer Lingus, only British Midland operates Heathrow-Ireland services. Their value arises from their scarcity. This may change when additional runway capacity is developed at Heathrow which is still the largest international hub in the world and important for the Aer Lingus network. I share the concerns of the House. We must be careful as to how we handle the issue because it is essential that we continue to have access to these hubs in the future.

  I must clarify that Ireland does not own slots in Heathrow Airport. These slots are time slots held by Aer Lingus on the basis of a historical precedent, known as grandfather's rights. The allocation of slots at congested airports such as Heathrow is strictly governed by EU rules which [291]are now under review. The current regulation allows for the exchange of slots but does not cover their sale. This has not prevented the development of a “grey market” in slots. I understand the current review will not address this issue. However, the revised regulation will, if adopted, specifically provide that if an airline is taken over, its slots can be transferred to the new owner. As this already happens in practice, it does not appear to change the current situation.

  This whole area of slots is a legal grey area, which is exercising EU policymakers' minds. I share the Deputies' concerns on this matter and will make stringent efforts to ensure that, in any changes of Aer Lingus ownership, great care will be taken on that issue.

  I thank the Deputies for their contribution to this debate. Before any decision is made by the Government, I will lay out the arguments for and against the proposed sale. Many Members accuse me of having an ideological bent towards privatisation. I have no proposals to privatise Aer Rianta. I am allowing the regions an opportunity to compete and develop their own airports, which shows my confidence in Shannon and Cork airports. When a previous Administration came up with the privatisation proposal for Aer Rianta, I rejected it.

  I have no proposals to privatise the railway lines, Dublin Bus or Bus Éireann. Instead, I am opening the markets to give the public a choice of using State or private transport operators. I reject this notion that private transport operators are shady and not in the same category as the State operators. It is a small country. The private operators are ordinary Irish taxpayers running businesses and giving employment. They are not pariahs but simply trying to make a living for their families and provide one for their employees. They should not be denigrated, as often happens in this House.

  Those against private sector involvement claim it is a principle. I have trouble with this argument because if a Member is left-wing, it is a principle.

  Mr. Hogan:What is that?

  Mr. Naughten:A bird never flew on one wing.

  Mr. Brennan:If one is slightly right-wing, it is ideological. I have difficulties with that because ideologies on the left are as dangerous as on the right.

  Mr. Durkan:The Minister should be careful. It might be terribly confusing with all the criss-crossing on that side of the House.

  Mr. Brennan:One does not need a great knowledge of history to know that ideologies are dangerous. The former Taoiseach, Mr. Seán [292]Lemass, took a practical view on these things, as I do.

  Mr. Hogan:Leave the dead alone.

  Mr. Naughten:Maybe the Minister could make a decision for a change.

  Mr. Brennan:One looks at the companies in question, such as Telecom—

  Mr. Durkan:We are now talking about the Minister's predecessor, Senator O'Rourke.

  Mr. Brennan:—and sees what is right for the country. There is no conflict between supporting State and private ownership. I do not have a problem with supporting both, depending on the circumstances and the market. I am opposed to the private sector owning infrastructure such as railways and airport runways, although they do at the regional airports. I am all for everybody, be they State or private employee, having access to the markets to provide a choice for the consumer.

  Mr. Durkan:A competitive market.

  Mr. Brennan:I heard Members refer in this debate to the debacle of the Telecom Eireann privatisation and how awful it was for Ireland. However, it was so awful that since privatisation the number of telephone has gone up and 83% of the population have mobile telephones.

  Mr. Hogan:That is a separate issue.

  Mr. Brennan:Mobile phone ownership has risen from 77% to 83% since privatisation.

  Mr. Naughten:What about small businesses and broadband access?

  Mr. Durkan:The figures did not go up at all.

  Mr. Naughten:Will the Minister elaborate on broadband access for small businesses?

  Mr. Brennan:Prices have fallen.

  Mr. Durkan:The most expensive telephone charges in Europe.

  Mr. Brennan:I will talk about broadband. The number of people with computers at home is 42% compared to 32% the previous year.

  Ms Shortall:This has nothing to do with privatisation.

  Mr. Durkan:Nothing at all to do with it.

  Mr. Brennan:Telecom is now 3.5% of GDP compared to 3% the previous year.

  Mr. Durkan:Is the Minister dreaming?

[293]  Mr. Brennan:The MRBI study shows that 85% of people believe that telecommunication users now have more choice and services are more efficient.

  Mr. Durkan:They are not more efficient.

  Ms Shortall:That is not true.

  Mr. Durkan:They are not more efficient. The Minister should know that they are the least efficient in Europe.

  Mr. Brennan:All I can do is put facts before the House.

  Mr. Durkan:That is some report that the Minister has dug up from the 1970s.

  Mr. Brennan:Deputies should calm down.

  Mr. J. Brady:The Minister is embarrassing the Opposition.

  Mr. Naughten:Will Deputy Brady pipe down? He will get his chance in a few minutes.

  Mr. Durkan:“Give up yer auld sins.”

  Mr. Naughten:He has not laid down the Nokia for the last week.

  Mr. Brennan:The Deputies should calm down. From the figures available from independent reports, in terms of what the consumer gets from telecommunication services, in the last 15 months choices and prices have improved. The rollout of programmes has increased substantially. I am not saying that is due to privatisation.

  Ms Shortall:What is the Minister talking about?

  Mr. Naughten:On a point of order, after the privatisation of Eircom the moneys for the rollout of broadband were returned to the State. There has been less broadband rollout than there was when Eircom was a semi-State company.

  Mr. Durkan:The money was used to buy the election.

  Mr. Naughten:The Minister should not mislead the House.

  Mr. Brennan:Up to 90% of companies are connected to the Internet.

  Mr. Naughten:Broadband is a different matter.

  Mr. Brennan:These companies use broadband.

  Mr. Naughten:Connecting to the Internet and using broadband are two separate matters.

[294]  Mr. Brennan:I accept that broadband is an issue.

  Mr. Naughten:The figure of 90% of business on broadband is not correct.

  Mr. Brennan:Broadband was always subsidised by the State through Telecom.

  Mr. Naughten:It should have been subsidised.

  Mr. Brennan:We are debating the Aer Lingus Bill 2003. However, I want to clarify the Telecom matter because it is often said in the House that if we were doing it again, we would not sell Eircom.

  Mr. Naughten:The point is selling the copperwire. We would not sell the copperwire. That was the mistake that was made.

  Mr. Brennan:I accept the Deputy's point and we might have made different arrangements for broadband. Consumer use of telephones has grown dramatically since the company changed hands and it provides more choice for people.

  Mr. Hogan:Over to a private monopoly from a public one.

  Ms Shortall:That has nothing to do with privatisation.

  Mr. Brennan:I am making the point from the consumers' viewpoint. Ask any kid with a mobile phone—

  Mr. Naughten:What has a mobile phone got to do with the issue of copperwire and the telephony infrastructure?

  Ms Shortall:That has nothing to do with privatisation.

  Mr. Durkan:A mobile telephone system is a different one altogether.

  Mr. Brennan:The use of telephones has grown dramatically in 12 months because of privatisation.

  Mr. Durkan:The Minister is going back to Mark Killilea's time.

  Mr. Brennan:If the Deputies on that side of the House are claiming that they would oppose the sale of Telecom Éireann, then let the electorate judge that.

  Mr. Naughten:The Minister should not twist our words. He knows exactly what we are talking about.

[295]  Mr. Durkan:The Minister will find out to his cost if the Government repeats the Telecom debacle.

  Mr. Brennan:I accept there is a problem with broadband. However, a number of Members claimed in this debate that the Government cannot touch Aer Lingus because of the disaster of Telecom.

  Ms Shortall:Look who made money out of it and then those who lost money.

  Mr. Brennan:There is no disaster in Telecom There are more telephones, more choice and more competitive prices.

  Mr. Naughten:There is less access to telephones.

  Mr. Durkan:It is keeping the economy flowing.

  Ms Shortall:Who made the money and who lost the money in the Telecom venture?

  Mr. Brennan:The State got money which it used to put into other State services.

  Mr. Callanan:We have given it back to the State.

  Mr. Durkan:It was used to buy the election.

  Mr. Brennan:The people who played the stock market are not those who got the funds from Telecom Éireann, which were used for Exchequer purposes.

  Ms Shortall:Many ordinary people lost their money.

  Mr. Brennan:I know where the Labour Party stands on State ownership.

  Ms Shortall:Many people got ripped off.

  Mr. Brennan:The Labour Party is opposed to the private sector being involved in any of these companies.

  Ms Shortall:We are not. The Minister is misrepresenting our position. We are against rip-offs.

  Mr. Brennan:We should let the young people judge who should supply such services in future.

  Mr. Durkan:The Government could not supply them with houses.

  Mr. Brennan:I thank the Deputies for their contributions to the Aer Lingus Bill. In the event that the Government makes a decision, I will lay the arguments out in a paper. I do not intend to rush into any of this, but rather to assess the [296]options without too much delay. The only consideration is what is good for the company, its employees and most of all the consumers who use the services of Aer Lingus.

  Question put: “That the words proposed to be deleted stand part of the main Question.”

  An Leas-Cheann Comhairle:In accordance with the Order of the Dáil yesterday, the division is postponed until immediately after the Order of Business on Tuesday, 16 December 2003.