Aer Lingus Privatisation anouncement today

[Deep Stall]

From RTE.ie
" Transport Minister Martin Cullen will bring a proposal to Cabinet today to float Aer Lingus on the stock market. It is expected that the Government will announce plans to sell off 60% of the airline and retain a 25% stake. Workers also have a 15% stake. "
and the link :
http://www.rte.ie/business/2006/0404/aerlingus.html
Comments on a postcard......

[akerosid]

The green light has been given! Aer Lingus will be privatised, with the govt retaining 25% - and SIPTU retaining a very cross expression! ;)

There is still, unfortunately, a lot of scope for SIPTU to throw a spanner in the works and I hope the govt is willing to follow this up; SIPTU must be left in no uncertain terms of the consequences of its obstruction. If it has concerns, such as pensions etc, fair enough; these can be dealt with, but if it's going to object and obstruct purely on ideological grounds, the govt must be prepared to follow suit.

However, a very important step has been taken for EI's future and the very best of luck to it; they deserve all the luck and success they can get and I hope the whole process works well for them.

http://today.reuters.co.uk/news/newsarticle.aspx?type=businessNews&storyid=2006-04-04T163440Z_01_L04661956_RTRUKOC_0_UK-AIRLINES-AERLINGUS.xml

[Bearcat]

deo gratis......ths has been going on for years. Look fwd to seeing a properous AL, more fleet, more rte's and a happier public who'll have more choice.

[maxalt]

Ah yes - its all going to be wunnerful. Jam tomorrow.

Here's an alternative scenario.

The IPO goes ahead succesfully, money is banked and a few a/c are bought. Then Mannion decides he needs more money for more a/c. How to get it? Issue more shares is one way. This dilutes everyone elses holdings, including the states. How far that process goes depends on how much they need and how willing the Guvmint is to hold the line on the shareholding. The next lot in power might choose a different policy - the end result is that INEVITABLY the states share will be washed out of the company over time.

As that process continues we see some speculator with deep pockets buying up shares. Pretty soon he has a large interest, and makes a bid for a takeover. If he succeeeds he then assett strips the company (LHR slots), borrows to the hilt on whats left, gets as much payback as he can and then flips it on as soon as he has a chance.

Eircom all over again.

Meantime jobs and pensions go down the swanny and the lot of ye end up working for FR Mk2.

Think it can't happen?

Best of luck boys.:cool:

[akerosid]

True, Maxalt, there's absolutely no shortage of dangers and sharks in the water, BUT whatever dangers there are, the future in private hands offers much more positive prospects than exist under state ownership.

What scenarios can anyone paint about EI's future in state hands? No growth; FR continues to expand ... EI unable to respond to Open Skies opportunities - or indeed other long haul, beyond DXB, other airlines fly Ireland - US ... FR strangles EI on short haul ... shareholder unable to put in more funds (even if it could justify it commercially - which it probably couldn't) ... airline goes down the swanny.

So, whatever hope the airline does have, it lies in privatisation.

[maxalt]

Two of the top economists in Ireland (McLaughlin and Power - not known for hand wringing on hard financial decisions) have come out firmly against it and warn of the negative consequences possible for the country.

The fact is there IS an alternative which would raise all the capital the company needs - a State Holding Company.

In that scenario ALT would be transferred into a separate vehicle, outside state control, run on a business footing by an independant board of directors who would be free to raise the funds needed commercially as they see fit and run the show without Guvmint meddling.

But no - Bertie and FF want to hand it over to their buddies in high finance. The developers and the money men like Dermot Desmond, who'll soon find a way to weasel into control and grab whats going - for themselves.

And 'grabbing what you can' does not involve spending large amounts of money on expensive a/c pro bono publica.

We've seen it time after time in Ireland and it'll happen again. Our island nation lives only by international access to trade and tourism - if that gets screwed up by the Fat Cats the whole country is banjaxed.

And before you laugh and start crowing about Ryanair always 'being there for us' - have you heard that O'Leary cancelled all his flights to and from France yesterday? He used the excuse of the strike to pocket the money of all those punters. Is that the behaviour of a man we can trust? Someone who'll 'look after the countries interests'?
Meanwhile the Aer Lingus services operated.

"more positive prospects"
For who??

[Cyrano]

Maxalt:

One factual correction: you are wrong to suggest that Ryanair is "using the excuse of the strike to pocket the money of all those punters."

From the Ryanair website:
Customers booked on any of the below flights can rebook free for charge...
Alternatively customers who are booked on any of the below flights, who wish to cancel and claim a full refund on the unused flight(s), can click here http://frd.ie/refweb.asp to apply for full refund on line. ...

I agree that Ryanair's decision to cancel contrasts unfavourably with Aer Lingus's continued service, I can well see your point about the country's interests, and I would never imagine that Ryanair could be trusted to consider any interests other than its own purely commercial ones - my point is that there is plenty of which Ryanair can validly be accused without having to weaken the argument against them with exaggerated rhetoric.

[maxalt]

Cyrano that point is a mere distraction - but I'll bite.

O'leary will make them work to get their money back, and he never refunds the security charges.
Most won't bother their bums. And he knows it.

If the load factors were low on the day, getting out of operating the flights would still save him money - even if he refunded every penny.
Which he won't.

And its no compensation for the poor b'stards who were stuck abroad, or had their holidays cancelled.

Regarding the sale of Aer Lingus - hire 'Wall Street' again and remind yourself how the world really works.

[akerosid]

So, two economists have come out against it. And they support this state holding company?

This surprises me; the key flaw in this argument, is how would this entity actually be able to raise funds on the markets? Who would be expected to invest in it? That's a huge risk to take; what if they go and set up this holding company and then investors turn away; what happens to EI then?

I just don't see this state holding company being able to raise the funds needed for fleet replacement, at the level needed. it's not just the immediate need, but long term, down the road. It just seems like a political compromise (much like the airports decision last year), which ignores commercial realities.

I see in the news that Rabbitte is still looking for a commercial investment by the state; is he for real. We're talking about EUR2b; what social programs/responsibilities does he suggest should be cut back to justify this? It is ironic that left wing parties are getting so caught up in ideology that they are advocating ideas which will hurt the interests of those who need these funds most - health, education, social housing, law enforcement etc.

To adapt the immortal words of Capt. Blackadder, "has SIPTU visited the planet Earth recently?".

[maxalt]

Your problem Akerosid is that you suffer from a credulous mindset, and lazy thinking. You were probably gulled by the 'We're not allowed to invest because of EU regulations' argument too - weren't you?

And face it - if Jim Power (Chief Economist Friends First) and Dan McLoughlin (Chief Economist Bank of Ireland) were to be trumping your party line you'd be damn sure to give them full credit for agreeing with your own skillful assesment of the economic facts.

This is all shaping up to be a monumental gamble - another great leap in the dark. Your blind faith in the triumph of hope over experience is touchingly naiive.

"Aer Lingus flotation: State must retain control over strategic areas

02 April 2006 Colm O’Reardon
Should Aer Lingus be privatised? No.

Should Aer Lingus retain its present ownership structure? Again, no. Neither of these options is in Ireland’s national interest.

In fact, there is an alternative to both of these, but it is not being seriously considered.

The debate on Aer Lingus, as a other semi-state company, is bedevilled by the assumption that there is only one way to ‘‘do’’ public ownership of a commercial enterprise - the way Ireland has always done it. The choice is assumed to be between the traditional Irish semi-state model and privatisation.

The traditional model is one where the company’s sole shareholder is a government minister, who holds the shares on behalf of the state. This approach has historically suffered from three problems, perceived and real: poor industrial relations, lack of commercial freedom, and limited access to finance.

Each of these is seen to relate to the ownership structure.

Hence, it is widely believed that union behaviour is influenced by the knowledge that their industrial strength is enhanced by the political cost of strike action.

If problems develop, the minister can be relied on to intervene and settle the matter.

In fact, the same bad incentives also apply to management, so neither side has to take full responsibility for its behaviour, and poor industrial relations can become away of life.

Second, a lack of commercial freedom means that the board and the management team can be second-guessed by the shareholder, whose concerns are again political rather than commercial. So decisions are delayed, or just not taken, and opportunities are missed or losses stack up without remedial action.

Third, the expansion and development of the company is constrained, not because the state is constrained by EU law from making rational investment decisions, but because governments avoid making rational commercial decisions when they are spending public money. Governments will always try to salvage sinking ships, rather than investing in the most seaworthy.

Retaining this traditional structure is not the right approach for Aer Lingus. At present, industrial relations is not the problem. In fact, the unions have been deeply involved in the transformation process, and the workforce has taken a lot of the pain in returning Aer Lingus to profitability.

Commercial freedom and access to finance, however, are critical concerns.

The solution is to devise a new approach to state ownership which retains a strategic national asset in public ownership, while also giving the company greater commercial freedom, and access to finance.

This would require vesting the shares of the commercial semi-states in a holding company, with an independent board. The holding company would be able to raise finance from institutional investors, including the sale of shares in the holding company itself, which it could then invest in its subsidiaries on the basis of a commercial assessment of business plans. The semi-states would no longer be dependent on an unwilling taxpayer, but would have access to commercial capital on the basis of commercial criteria.

Equally, the companies would be insulated from political intervention in their strategic decision-making. The board of the holding company would have a commercial mandate.

This would avoid the present situation where decisions can be the outcome of negotiation with one or more government departments, which may themselves have conflicting views.

The holding company would be able to sell shares in its subsidiaries, as part of joint ventures.

Its purpose, however, would be to retain strategic assets in national control.

This structure was originally proposed by the Labour Party, and was contained in its 2002 manifesto. While it has been debated among the social partners, there is no sign of it being adopted. Instead, we are left with the same old choice between the traditional model and privatisation.

Neither is right for Aer Lingus.

Having taken the pain of rationalisation, Aer Lingus is ripe for growth. It should do so on commercial criteria, and not be subject to the dithering of recent years.

With privatisation, however, Ireland runs the risk of losing control over a strategic national asset. Of course, there are structural differences between an airline and a telephone company, but the experience of Eircom should be enough to persuade us to think twice about privatising Aer Lingus.

What was intended to provide Eircom with a platform for growth has turned into a long saga of repeated ownership change, debt, and underinvestment, to the detriment of our national economy. Ireland’s appalling performance on broadband rollout followed.

The unenthusiastic reaction to the proposed Babcock & Brown bid among thinking commentators, for whom takeover activity is normally great copy, was telling.

Will the same happen to Aer Lingus? Who can guarantee that it won’t? The notion of the government having a golden share of less than 50 per cent is a chimera. Can we guarantee the continuation of the Heathrow slots?

Can we guarantee that decades of experience in the running of an airline will not be transferred to another country?

Can we guarantee direct flights from Dublin to the capital cities of our major trading partners?

Can we guarantee freight services? Can IDA Ireland be assured that would-be US investors will not be told that there are no direct flights to the place they are trying to sell as being the cutting-edge business centre of Europe; and, by the way, you have to pick up your baggage and get over to Stansted - they don’t fly to Dublin from Heathrow anymore.

If you can’t guarantee those things with anything other than vague assurances, then isn’t it time to rethink the sale of Aer Lingus? The status quo is not the answer - but neither is an IPO.

Colm O’Reardon is director of policy in the office of the Labour leader. He is writing here in a personal capacity. "

[akerosid]

Hi Maxalt,
Actually, I've made a detailed submission on the whole issue of privatisation to the Oireachtas Cttee on Transport. I have tried to make it as balanced as I possibly can, taking in all of the issues.

Am I taken in by the argument that we can't invest commercially because of EU regulations? Actually, no I am not, but what I am saying is that even still, we should not. The state cannot afford to put EI in funds to the extent that it needs. More fundamentally, it should not, because it has responsibilities and calls on the exchequer which can only be funded by govt.

I haven't seen what Messrs. Power and McLoughlin are saying on the issue, but focusing on what the Labour chap is saying, I certainly agree that the status quo is untenable - I've said that in large red letters in my submission. In fairness, Mr. O'Reardon makes some good points, but his conclusion still seems to me to be ideologically directed, i.e. avoiding the P word because it disagrees with his political leaning.

Is privatisation a leap in the dark? It's a leap, though not in pitch darkness. There's no doubt that there are risks, but I think that the "safety" of state ownership carries guarantees of a negative nature. There will be peaks and troughs; state ownership hasn't protected EI from these in the past. I think that with outside investment and with a vision which will attract investment, EI will be far better placed to compete on a level playing field.

My big concern at the end of the day is that this state holding company idea is a new idea; I just cannot see why anyone would want to invest in it. I want EI to be able to raise funds as quickly and easily as Ryanair and if you compare the two approaches, this proposal seems to put FR in a much better position and this, to me, is the ultimate tragedy. Unions, quite understandably dislike FR rather passionately and the feeling is mutual, yet in their approach to EI and privatisation, they are hamstringing the airline in its ability to compete against FR and that just seems like suicide to me.

Can I just say, in conclusion, let's not fall out over this. Whatever our differences on the various approaches, you're obviously as passionately committed to and interested in the future of EI as I am - and indeed, all who contribute to this thread. None of us wants to see EI fail; all of us want to see EI as a strong, confident, quality and aggressively growing carrier. Whatever it takes to do that is fine by me - if I thought a state holding company could, I'd support it, but I just don't think it can. I'm not blind to the risks and I'm certainly not (or at least I don't think I am) naive. There are huge challenges out there - and huge opportunities - and I just don't want Big Green to be held back in its ability to face the challenges or exploit the opportunities.

[maxalt]

Hi Maxalt,
Actually, I've made a detailed submission on the whole issue of privatisation to the Oireachtas Cttee on Transport.Were you invited? In what capacity? As a private citizen? That is your right - no doubt, but are you better qualified than McLaughlin and Power?

Am I taken in by the argument that we can't invest commercially because of EU regulations? Actually, no I am not, but what I am saying is that even still, we should not.I agree with your assesment, but that wasn't my point. The point I'm making is that the Guvmint have already lied and twisted this issue before. We are not dealing with rational people here.
These are POLITICIANS. They have AGENDAS.

Oireachtas Committee or not - the end decision is made politically by Bertie in the interests of FF and his buddies, with a keen eye on his chances of re-election, and thats all.

The state cannot afford to put EI in funds to the extent that it needs.Even if that was what I suggested (which IT IS NOT) I'd point out that the Guvmint has spent 350M already on electronic voting machines which will probably be scrapped at the end of the day - and don't even get me started on PPARS or Punchestown. The Guvmint has money to spend on useless rubbish when it sees fit, especially on its 'vested interest' buddies. The 400M ALT will receive from the sale is equivalent to that wasted on the voting machines. If that money was spent on investment in ALT it would have earned a return (instead of being flushed down the pan) and would have helped guarentee the nations air routes for the future - an investment beyond monetary value.

Mr. O'Reardon makes some good points, but his conclusion still seems to me to be ideologically directed, i.e. avoiding the P word because it disagrees with his political leaning.The Labour Party are a democratically elected party, with a mandate from the voters of this country. Their politics may not be your own flavour, but they have a democratic right to oppose privatisation.
Are you a Democrat?

..state ownership hasn't protected EI from these in the past.When it was under State ownership ALT was protected from the predatory attentions of the assett strippers and profiteers. That is about to change. While the company survived, even thrived despite the ups and downs, it has never had to cope with the destructive influence of these scavengers.

I think that with outside investment and with a vision which will attract investment, EI will be far better placed to compete on a level playing field.Management Yuckspeak: Vol.1

My big concern at the end of the day is that this state holding company idea is a new idea; I just cannot see why anyone would want to invest in it. Profit my boy. PROFIT!

I want EI to be able to raise funds as quickly and easily as Ryanair and if you compare the two approaches, this proposal seems to put FR in a much better position and this, to me, is the ultimate tragedy.Aer Lingus doesn't want to be like Ryanair. Mannion doesn't want it. The punters don't want it. The Staff don't want it. Even the Guvmint don't want it. Access to money is needed, but Ryanair can keep O'Leary.
Unions, quite understandably dislike FR rather passionately and the feeling is mutual, yet in their approach to EI and privatisation, they are hamstringing the airline in its ability to compete against FR and that just seems like suicide to me.Well they seem top have done a bloody good job of it so far. Doomsayer!

Can I just say, in conclusion, let's not fall out over this. Whatever our differences on the various approaches, you're obviously as passionately committed to and interested in the future of EI as I am - and indeed, all who contribute to this thread. None of us wants to see EI fail; all of us want to see EI as a strong, confident, quality and aggressively growing carrier. Whatever it takes to do that is fine by me - if I thought a state holding company could, I'd support it, but I just don't think it can. I'm not blind to the risks and I'm certainly not (or at least I don't think I am) naive. There are huge challenges out there - and huge opportunities - and I just don't want Big Green to be held back in its ability to face the challenges or exploit the opportunities.
I'll buy you a beer anytime you want to debate it.

[bear11]

Maxalt,

give us all a break. The idea of a holding company is not commercially credible - any more than your comment that the e voting system cost us 350 million, because it's cost one seventh of that so far (I won't bore others with references to show it but a 5 second Google would stand it up). The labour party have a mandate from a tiny percentage of voters in the country - mind you, that specific proposal shows more of the originators Sinn Fein or Democratic Left gob****e economics tendencies. And the lecturing about what the money should be spent on is priceless considering half the expected sales proceeds would go to sorting out your pension when the rest of us who live in the real world have to suck it up and hope for the best. Again, coming from a non-EI, non-SIPTU, non-socialist background, the common Irishman's perception of the interference by politicians over the years in EI has been to allow EI management and staff ignore the economic realities of life by charging 400 quid to fly to London and guarantee jobs to ex-TEAM employees.

It's a good idea occasionally to check what you wrote before you expect others to swallow it.

[akerosid]

Maxalt,

Actually, I established an aviation lobby group last year called Grounded Ireland, so I'm doing it through that. Whether my submission gets anywhere, I don't know - probably not, but I responded and that's all I can do.

Part of the objective of Grounded Ireland (www.grounded-ireland.com) is to encourage a responsible, pro-active and growth driven Irish aviation policy. There's a huge need for this; I've been fighting the SNN stopover since the early 1990s and I've seen enough evidence to believe that the govt needs pitchforks applied to buttocks to get them to move on aviation issues.

I know there are risks and I know there are going to be problems ahead, but I don't see that state ownership is going to be a safe harbour. It hasn't been a safe harbour for the likes of OA or AZ. EI needs to have its wits about it, but I'd feel much happier if it could get access to funds. I don't see why, necessarily, people would want to asset strip it. Maybe I'm being naive in this, but I believe people will want to invest because they see its potential as a growing business.

I am very much a democrat and I never criticised the Labour Party's right to say what it's saying, but I got the impression, just as I got from SIPTU - rightly or wrongly - that they were deliberately trying to look at any other option but privatisation. I'm just concerned that their motive for this was more ideological rather than what was in EI's best interests. Maybe I'm being unfair in this. I understand, of course, that there's a lot of misgivings, but I just fear that a fudge will be devised which suits a political agreement, but which ultimately has a damaging consequence for EI and its ability to raise money.

Thanks for the offer of a drink - I'd certainly like to debate this further. Hell, I might even take up drinking; SIPTU certainly drives me in that direction!!!

[MarkD]

bear11

why do you consider a state holding company "not credible"? NTMA could handle it, as the Caisse does in Quebec (http://www.lacaisse.com/Profile/ListeFiliale.aspx). Aer Rianta could follow the same route, as could ESB and the OPW property book. You can't be poacher and gamekeeper, and the Government's focus can't be on proper regulation while trying to give an advantage to companies they directly own.

My problem with the SIPTUites is their assumption that Ireland will lose routes without EI. EI is out of the PSO business, largely out of the regional UK - what routes could they get out of that Ryanair or CityJet or Arann wouldn't be into five minutes later? This is all code for Shannon transatlantic. Put a Ryanair subsidiary (separate AOC) with 787s and an open skies agreement into Shannon and Mick would find a way to make it work.

[bear11]

Mark,

I have very mixed feelings on this, and don't pretend to be an expert on EI. It's possible of course to set up a holding company, but I fail to see how it would serve Aer Lingus in a commercial sense. It will be hard enough to sell the current proposal in the market even at a discount due to the setup proposed, but the holding company in my opinion is also a fig leaf, and would be seen through by the market in the discount they would require to buy the shares. With a few real exceptions, I think you'd have to be half-mental to invest in the aviation business with it's incredibly cyclical nature, its avarice for a variably expensive commodity, and its ability to lose bucket-loads of money in a very short time. Add to that with IE the political dimension and its shares in the company (and please don't tell me they won't try to get their fingers into the holding company) and SIPTU, whos latest version of "commercial" is stopping the new boarding card system in Dublin.

Correct me if I'm wrong, but the main argument for keeping IE as it is would be strategic. However, my understanding that the money required is for expansion, which in Mannion's vision involves getting out of shorthaul and more into longhaul - what's that got to do with "guaranteeing the nation's air routes for the future"? And if it wants to grow commercially, why should the Irish taxpayer foot the bill? As far as SIPTU is concerned, half the money is in any case to go toward resurrecting their pension plan. As a taxpayer, Aer Lingus can sod off if they think I should pay for their pension when mine is as dodgy as theirs, and as a commercial investor, why should I invest in an airline when half that money will go toward the pension plan?

[Tom the Tenor]

Akerosid, what MarkD says above is relevant. Yes, EI has to act quickly to secure longhaul for the future and see off any move by a Ryanair type low cost longhaul to America with 787s that are still a few years off and with the Airbus A350 being even further away over the horizon.

EI needs money for more aeroplanes and not just for longhaul. The competitive fight has to be brought back to Ryanair at home in Ireland so there is every chance more Airbus A320s will be needed. EI should go for a full on battle with FR to curb this year's Ryanair expansion from Dublin. EI cannot afford to throw away their market share to Ryanair in the home market.

Notwithstanding the new A330s that EI have on order they key to future longhaul for EI is choosing Boeing 777s. Yes, have an absolute top class premier or business class but otherwise pack 'em in like sardines and have low fares, the only concession to the masses being PTVs at the back of every seat to keep 'em quiet! There is plenty of opportunity out there for EI in such a sceanario to places like China and Australia not to mention plenty more destinations in America and for, MarkD, Canada!

Sadly, do not see any future longhaul committment by EI from Cork. You can imagine how much that hurts but the outcome for Cork in the next few years will be at best grey just like the weather.

[maxalt]

Maxalt,
give us all a break. The idea of a holding company is not commercially credible - Thanks to MarkD for debunking that.
...any more than your comment that the e voting system cost us 350 million, because it's cost one seventh of that so far.The SBP quoted the total cost of purchase AND STORAGE of the machines to be 350M. So you run along and do some Googling yourself.
The labour party have a mandate from a tiny percentage of voters in the country - They have a larger mandate than the PDs who (as they themselves crow) seem to be pulling the FF donkey around by the tail. So don't talk to me about party SIZE...it seems not seem to matter!

Akerosid, I commend your efforts with your website. Still, as a private citizen (I presume you're Irish in spite of where you live) why should your views carry any more weight than the next man?The unions claim not to have been consulted about the Governments plans - yet you have?
How does that work??

While Olympic and Alitalia have been struggling, Aer Lingus has changed and is profitable. How can you compare them. In both those airlines the staff have been major obstacles to any change - while in Aer Lingus they've been instrumental to it.
I could equally ask you to explain the fiasco of Air New Zealand - sold in 1989, and bought back by the Government in 2001 for 900M NZD - which I'll bet that was more than they made from the sale in '89!
The lesson there is clear to see - a fatal error was made and it cost a lot of taxpayers money to resecure the countries air routes.

Both you and MarkD need to get off the SIPTU hobby horse. Its just another excuse to lump all the airport unions in together and blacken any opposition to the PD/FF Governments intent. Its part of the railroading strategy.
SIPTU are a weakening force, its IMPACT who are in the ascendancy - almost all the Cabin Crew and pilots are IMPACT members, and IMPACT have not blocked the sale....which I think is a mistake that will be realised later.

half the expected sales proceeds would go to sorting out your pension when the rest of us who live in the real world have to suck it up and hope for the best.You are a bitter man Bear11. Perhaps your own career has been unsuccesful, but instead of throwing tantrums over other peoples legally contracted entitlements, perhaps you'd have been better employed if you stayed in school longer, studied harder, and got a better qualification and found yourself a better job?

I think you'd have to be half-mental to invest in the aviation business with it's incredibly cyclical nature,Well, thats the best argument yet for leaving the company in State hands! Thank-you.

[MarkD]

maxalt - on the contrary. It is because I don't want to tar IMPACT, who appear to an outsider to be constructive in their dealings with EI management/DOT with the obstructionist SIPTU brush that I name the latter specifically and refrain from merely saying "d'unions".

Will IMPACT cross SIPTU pickets though?

[akerosid]

Come on, Maxalt, calm down!

Aren't you just getting a little bit personal? I didn't say or suggest for a moment that my view was any more important than anyone else's; the invitation went out and I responded to it; many others will and my view will carry no more or less validity than anyone else's. Yes, I'm Irish and I've been lobbying on aviation issues for many years - including my dear old stopover, since the early 1990s. Did I say I'd been consulted about govt plans? I didn't intend to; what I was talking about was the transport committee's consultation process.

At the end of the day, as I said earlier, the fundamental point is that a structure needs to be put in place whereby Aer Lingus is in just as good a position as FR to raise funds and react to market forces and changes, to exploit the opportunities out there. I just don't see the whole state holding company thing achieving that, which is why I see it as a risk. If it doesn't allow EI to raise funds as easily as FR, then it loses.

I don't want EI to be like FR - an "in your face", aggressive, cheap and nasty operation, BUT I do want it to be able to respond to opportunities and to have the same freedom FR has to grow its business. Why does FR have the attitude it has now? Because it can; there's no regulatory limits on its growth - it can fly wherever it wants and charge as much as it wants. To my mind, until EI has that same freedom, it will be under threat and I think it's tragic that people who abhor the way FR does business and its approach to labour relations generally, go about hamstringing EI's ability to compete. This isn't theoretical. From next month, FR is going to be growing rapidly at DUB; EI needs the resources to grow, short and long haul.

Any solution which obstructs EI's ability to do that is out; I don't care what ideology is involved or what economic theory; whatever does the job is what is needed; as old Deng Xiaoping used to say, "it doesn't matter what colour the cat is, as long as it catches mice". It just so happens that I believe the name of this cat is privatisation. It's a strange name for a cat, but as long as it keeps our favourite airline purring!

Tom, I'd love to see EI flying 777s and I know they were interested in them for a time, but I tend to think that EI will go for 787s, not least because the 350 is becoming more and more discredited by the day (I know you disagree with me on that, Mark D!). In order to prepare for the likelihood of Long Haul low cost, it needs the most cost efficient long hauler possible and that to my mind will be a combination of 787-9s and -10s.

[MarkD]

maxalt - (having deja vu here - seem to recall someone bringing NZ up elsewhere else) - NZ bought AN. D&G here reverberated with tales of NZ raiding AN spares and AN 767 pylons cracking and SQs machinations. NZ went down after AN.

Privatised NZ made a bad business decision in acquiring AN but failing to deal with a hugely diverse, aging fleet. NZ is far more remote than Ireland which sits in the middle of a huge aviation throughfare so alternatives were not as much of a possibility.

By contrast, BA was privatised and despite its rivals going Ch11 and dumping their debts has managed to make profits or at least stay afloat in even the toughest of times. Why not use BA as your example airline? Why not use AF which retains about 20% government stake even now post KLM?

[bear11]

Maxalt:

if you're wrong, you can't be right:

www.irishexaminer.com/pport/web/ireland/Full_Story/did-sgd4u-BlEXk32sgadLjt5C321I.asp

- latest information from the Public accounts committee, so if you add 700k a year for storage, it would take another 425 years of storage to come to your 350 million figure.
It would also help if you read what everyone else wrote apart from checking your facts before peddling your own agenda. MarkD didn't even start to debunk the comment I made on the state holding company, and neither did you, incidentally.

Listening to one of the SIPTU guys on the radio news last night, he said that the primary issue wasn't pensions, it was job security for the employees - shades of TEAM and letters of comfort again, perhaps? But then again, you say IMPACT are better, and in the next breath say they were wrong and they should have done what SIPTU did - are there 2 of you?

"You are a bitter man Bear11. Perhaps your own career has been unsuccesful, but instead of throwing tantrums over other peoples legally contracted entitlements, perhaps you'd have been better employed if you stayed in school longer, studied harder, and got a better qualification and found yourself a better job?"

- you truly have no idea, and if that's the best you can do rather than addressing the issue of where half the sales proceeds go, and that's your attitude to the outside Irish world who are paying your wages looking in, I'll leave you to fight with yourself.

[Desert Diner]

I don't see how changing the fleet to 777 or 787 and 737NG will save Aer Lingus. All it will do is give it debt or crappy lease payments.

Plenty of Airlines that went bust with that strategy.

What EI needs is LR planes to expand its business. THey can do that by adding more 330's and if required 340's. The reason being is that they are now an Airbus fleet so why incur additional costs for fleet transition.

They need to expand into the US as well as the ME. The 330 can do that for them at the lowest cost.

[akerosid]

No one said anything about 737NGs. I know EI will be doing (indeed, is doing) a pretty intensive evaluation of all the types available - 777, 787, A350 and A340, although the two key acft are the 787 and A350. The A340 is out because DUB's runway isn't long enough. The 777 is probably too big, so that leaves the two (other) twins.

Commonality is certainly an advantage with Airbus, there's no denying that, nor can one deny that the A350 will be a fine aircraft - an improvement of what is already a very good machine, BUT EI needs an aircraft which will be able to take advantage of new developments in the market - principally long haul low cost operations.

Currently, there has been a lot of dissent among key customers (ILFC particularly) about the 350; Airbus's John Leahy has said, in an "internal" memo, that the 350 is too narrow to compete effectively and that's where the key issue lies, I believe. When you get to the larger of the two types - the 787-10 (soon to be launched) and the A350-900, that could amount to an advantage of 30-40 seats over the 350; now, in a highly competitive market, that's almost a no-brainer and it certainly outweighs the advantages of commonality. Now, bear in mind also that other carriers - particularly low cost - will enter the long haul low cost market and they will seek the most economic acft available, with the lowest seat-mile costs; that won't be the 350; it is most likely to be the 787. Does EI want to hamstring itself in its ability to compete against these airlines by choosing a plane just because it has commonality with another aircraft in its fleet? I don't think so.

As for the recent 330 order, that's for "now" (well, next year) and really, it's the best plane for EI, but the new fleet choice is for the next decade (and beyond) - and for a whole new aviation environment.

[maxalt]

MarkD - Fair enough, I'm glad you aren't one of those who uses the shotgun blast approach to the unions. However, the problem is that many ignoramusses out there think the ONLY union at DAP is SIPTU and EVERYBODY is a member. Bear11 is typical of that element, he's on about SIPTU again. Don't underestimate the ignorance and gullibility of good old Irish begrudgery.

Speaking of which:

Bear11 - You seem to be missing the point somewhat. We can argue 'til the cows come home over the ammounts involved in any one specific case, but the litany of waste under Mr Ahern, Mr McCreevy, Mr Cowen, and their colleagues beggars belief. Electronic voting, Punchestown, Abbotstown, Eircom, the aquatic centre, the nursing homes scandal, the open-ended indemnity for the religious orders, the roads programme that has gone from less than €6 billion in 1999 to €17 billion.
Still - we can't 'waste' taxpayers money on the national airline!
half the expected sales proceeds would go to sorting out your pension when the rest of us who live in the real world have to suck it up and hope for the best.You lost any right to be treated with respect or seriousness with that remark. Its patently obvious from those comments that your fundamental motivation here is simple BEGRUDGERY. Nothing to do with the economics or strategic planning - just good old fashioned, bare faced, ignorant Paddy-Irish BEGRUDGERY. Ponder on that during your exile.

Akerosid - Good luck with your website, I'd support most of what you're trying to acheive, but unless there's a Brown Envelope involved you're unlikely to suceed anyhow. Nothing matters in this State any more besides back-scratching and pocket lining.

All that waste, yet they baulk at the idea of investment in ALT!
Fair enough, don't spend taxpayers money on it, but there is an alternative to simply throwing it to the wolves. And that alternative hasn't been given the time of day. I wonder why. They won't give the Holding Company idea a second hearing because they want their pay-day and it helps their buddies turn a quick buck. If it all f**ks up down the road there'll be somebody else to clean up the mess.

The State has introduced Tax Incentives for numerous worthy projects in the past. Section Reliefs in housing are one example - those reliefs turned around the buy-to-let market and provided an increased and better quality rental housing stock for those unable to afford their own homes. That was an example of the State succesfully encouraging private money into backing social/strategic policy.
Investment in a State Holding company could equally be given tax advantages which would make it one of the most attractive propositions in the market. All it takes is imagination and the will.