Dublinflyer
17th Apr 2003, 16:13
A sad day if you ask me
TRANSPORT Minister Seamus Brennan has been given the green light to sell Aer Lingus in a trade sale following formal approval at a Cabinet meeting two days ago.
The Irish Independent has learned Mr Brennan brought a memo to his Government colleagues which confirmed he would seek "private sector investment" for the state-owned airline. The Minister also secured backing to redraft legislation which had been originally written to enable the Government float Aer Lingus on the stock market in 2000.
However, the Cabinet formally agreed to alter the legislation to allow for a trade sale of the airline, as a flotation is no longer an option due to weak market conditions.
The Ministers, who met on Tuesday, also agreed that Mr Brennan would return to the Cabinet with further information regarding the timing and mechanism of the sale.
The legislation will also permit the staff at the airline to hold a 14.9pc stake in the group.
The Government, which owns a majority of the airline, is restricted from investing in Aer Lingus under European Union regulations.
This resulted in the carrier being unable to benefit from a cash injection following the aviation downturn after the September 11 attacks on the US. The carrier had to slash staff numbers by 2,000 and embark on a massive reduction of costs to survive the financial crisis.
Current estimates value the airline at €400m. This would mean the workers' holding would be worth €60m, or €14,000 each.
The Government has been cautious about immediately pressing ahead with a sale of the airline while there has been turbulence in the aviation sector as a result of the war in Iraq.
However, with the conflict nearing an end, the climate for investment in airlines could become more favourable.
In recent weeks, Aer Lingus has experienced a substantial fall in bookings from US travellers.
But a spokesman for the airline said it was hopeful that reservations would pick up momentum as troops return home after the war.
An effort by management to tighten costs and use a low fares model has returned the airline to profitability.
The airline had a €25.7m profit after €35.3m exceptional charges for the year ended December 2002.
This compares with a loss of €139.9m for 2001. Net cash at the end of the year rose to €154.9m, up from €66m a year earlier.
TRANSPORT Minister Seamus Brennan has been given the green light to sell Aer Lingus in a trade sale following formal approval at a Cabinet meeting two days ago.
The Irish Independent has learned Mr Brennan brought a memo to his Government colleagues which confirmed he would seek "private sector investment" for the state-owned airline. The Minister also secured backing to redraft legislation which had been originally written to enable the Government float Aer Lingus on the stock market in 2000.
However, the Cabinet formally agreed to alter the legislation to allow for a trade sale of the airline, as a flotation is no longer an option due to weak market conditions.
The Ministers, who met on Tuesday, also agreed that Mr Brennan would return to the Cabinet with further information regarding the timing and mechanism of the sale.
The legislation will also permit the staff at the airline to hold a 14.9pc stake in the group.
The Government, which owns a majority of the airline, is restricted from investing in Aer Lingus under European Union regulations.
This resulted in the carrier being unable to benefit from a cash injection following the aviation downturn after the September 11 attacks on the US. The carrier had to slash staff numbers by 2,000 and embark on a massive reduction of costs to survive the financial crisis.
Current estimates value the airline at €400m. This would mean the workers' holding would be worth €60m, or €14,000 each.
The Government has been cautious about immediately pressing ahead with a sale of the airline while there has been turbulence in the aviation sector as a result of the war in Iraq.
However, with the conflict nearing an end, the climate for investment in airlines could become more favourable.
In recent weeks, Aer Lingus has experienced a substantial fall in bookings from US travellers.
But a spokesman for the airline said it was hopeful that reservations would pick up momentum as troops return home after the war.
An effort by management to tighten costs and use a low fares model has returned the airline to profitability.
The airline had a €25.7m profit after €35.3m exceptional charges for the year ended December 2002.
This compares with a loss of €139.9m for 2001. Net cash at the end of the year rose to €154.9m, up from €66m a year earlier.