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2A
6th Jun 2001, 12:10
This from this morning's Irish Independent;

Aer Lingus is cleared for a quick sell-off


THE Government intends to sell off Aer Lingus as quickly as possible.


Workers were told of the sell-off plans last night during a 90-minute meeting with Public Enterprise Minister Mary O'Rourke.


She told IMPACT union leaders she had instructed AIB and Citigroup to search for any interested buyers over the next month. She has also asked them to suggest a price tag which would attract a buyer.


Later, a department spokesman conceded the troubled airline could even be bought by discount rivals Ryanair, though this is thought unlikely.


In return, Aer Lingus staff will be offered a further 9.9pc on top of the 5pc shareholding already held by an employee trust since 1993. The extra shares would be worth about 30m, or around 4,600 for each employee.


Last night, SIPTU industrial secretary Noel Dowling criticised the plans for a quick disposal. He said such a sale, rather than a stock-market flotation, would be a "fire sale" giveaway.


Last night Mrs O'Rourke also met the airline's chairman Bernie Cahill to outline her plans.


Aer Lingus is approaching scrap value following the effects of the foot-and-mouth panic, the downturn in the US economy, and a year of industrial disputes and inter-union rivalries. The embarrassing row over allegations of sexual harassment against chief executive Michael Foley has left senior management rudderless.


Continuing high prices for aviation fuel and recent wage increases of about 20pc have further hit the airline's prospects.


Last night, a Department of Public Enterprise spokesman said both Taoiseach Bertie Ahern and Mrs O'Rourke are determined to sell Aer Lingus.


The Government wants to dispose of it completely and will not be retaining any golden shareholding.


He said a sale to rivals Ryanair could not be ruled out as the Government would consider all expressions of interest. However, he thought the discount carrier would not be interested in acquiring a full-service airline.


The department's aviation chief John Lumsden has been asked to get talks restarted on employee share-holding.


They collapsed last August in the midst of spiraling industrial relations rows which led to the grounding of the fleet on five occasions over the past seven months.


While IMPACT, which represents 2,500 staff, has generally supported flotation plans and securing a 15pc stake, the rival SIPTU, with about 3,500 members, was less positive about the flotation proposals.


Key to the airline's problems are recent pay deals which will boost wage costs by about 30m and contribute to a slashing of profits to 10m or less.


Yesterday's meeting with IMPACT followed a letter sent by the union's aviation branch to Mrs O'Rourke last week in which they expressed concern about the state of the company and the impact of the board room row with Mr Foley, whose development strategies the union broadly supported.

gyrohead
6th Jun 2001, 12:40
Now here's a golden opportunity for all ppruners. How about if we start a fund now, we could make a bid for the airline?
Just think of it!, if everyone chipped in 5k to 10k or any amount that feels right we could have our own airline in a jiffy. The airline could be run successfully by all our resident experts, and in one fantastic stroke, all the anti-Ryans would get a chance to really give the finger to MO'L.

It has to be worth considering. If we don't do it someone less worthy than our goodselves will!!

[This message has been edited by gyrohead (edited 06 June 2001).]

[This message has been edited by gyrohead (edited 06 June 2001).]

Portcullis
6th Jun 2001, 13:16
Would the sale of Aer Lingus not be a good thing?

The fact that they have been struggling quite a bit in recent years shows that they need a new injection of cash and ideas.

If BA bought them out - everybody's happy. BA have more slots, Aer Lingus pilots have better pay and conditions.

Maxfli
6th Jun 2001, 13:25
Under present agreement only EI pilots can operate the 25 slots out of LHR and if there were a trade sale it is likely that the brand would stay intact and therefore so would the existing levels of pay.

high & fast
6th Jun 2001, 15:12
Somehow I don't think BA buying Aer Lingus will improve pilot pay. BA will be interested in ALT for their feeder network into UK airports, especially LHR. Remember that BA also own Brymon/BRAL and they have nothing like the pay structure in place at BA. Therefore it follows that Aer Lingus pilots will not have their pay linked to BA mainline in any way. There is a world of a difference between a small regional airline like ALT and a worldwide carrier like BA. Let's hope it's not Ryanair who buy it.

CaptSensible
7th Jun 2001, 01:09
<font face="Verdana, Arial, Helvetica" size="2">“One of the prime goals of [the programme] will be to abolish unnecessary hierarchical levels and over-complex structures in all areas of the group. These actions will demand considerable flexibility from the managers concerned, along with an unconditional willingness to accept new challenges – the simplification of the present management structures is bound to entail transfers and new appointments at various management levels.
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Talking about Aer Lingus?
No...but sounds just like it, doesn't it!

The above quote is from an Air Transport Intelligence article, relating 'SWISSAIR GROUPs' plans for turning that group around.
Expect a dose of the same medicine in ALT soon.