Wednesday, 31 March 2004
Seanad Eireann Debate
Acting Chairman (Mr. U. Burke): I remind Senators that a Senator may speak only once on Report Stage except in the case of a proposer of an amendment who may reply to the discussion on it. Each amendment must be seconded on Report Stage.
Minister of State at the Department of Transport (Dr. McDaid): I appreciate the Senator’s amendment. As I said on Committee Stage, I would like it if all the capital budget for an area of transport could be ring-fenced for capital benefits, but unfortunately the Department of Finance has informed me that the Senator’s amendment would not cover that in the first place, much as I would prefer to accept this type of amendment if it was to set a precedent. However, it is not acceptable in the long term. Such funds will be recorded as a capital asset, but I do not know where they will go after that.
The subject of this amendment deals with the main substance of the debate on Committee Stage, in which members of all parties participated. I wish to pick up on a few points the Minister of State made then. He indicated he would raise the matter with the Minister of Transport to enable him to discuss it with his Government colleagues. Have there been developments in that regard?
Provided that everything goes according to plan and the Bill is finalised today, I am sure it will be enacted quickly. The Minister said that the trustee is anxious that the Bill be enacted as soon as possible so that the ESOP can subscribe for the additional shares with a view to making allocations immediately thereafter, thereby ending the accumulation of levers without share allocations. Notwithstanding the above, the trustee has not formed any definitive view on whether a change of the rules is appropriate. Can the Minister of State specify a timeframe as to when the ESOP will subscribe for the additional shares once the Bill is passed?
Dr. McDaid: I can answer the Senator’s point by saying that once the Bill is passed the trustee can proceed without delay to the next step, if necessary. As regards my colleagues in the Department, we do not foresee any major objection in this regard. A problem that may arise is one of human nature in terms of whether people will want to go ahead with the share issue. That will be a matter for them and it will come under the previous legislation.
With regard to the Senator’s amendment, I had intended to repeat what I said on a previous occasion. I understand from what position the Senator and Fine Gael are coming. While it would not be a problem to proceed in this regard under the Companies Act, the Senator rightly pointed out that there is a provision under the Air Companies Act 1966 which we did not foresee could be a problem but which the Senator did. The purpose of this legislation is to clear the decks to ensure that we can proceed in this regard and to ensure that the 1966 Act will not impinge on that.
Minister of State at the Department of Transport (Dr. McDaid): I thank the Senators who spoke on this Bill. I welcome the amendments to it, whether tabled by Members in the other House or by Members in this House, as they gave rise to different debates. If an amendment is tabled in the other House, people may question why a similar amendment should be tabled here, but there is a different point of view in the Seanad. I respect the views of the Senators who spoke on the Bill and tabled amendments to it. I particularly want it to be recognised that we are trying to get this legislation through the House to ensure that a new dawn can begin in this area. I appreciate the co-operation of the Opposition parties in that regard.
Mr. Browne: I thank the Minister of State and his officials for their courtesy and help during the last few weeks when we debated this important Bill. Fine Gael accepts that the option of privatisation should exist for Aer Lingus. We must acknowledge that it almost went bankrupt in the past ten years. We must also accept the global realities in the airline industry and take account of other state airlines that have gone bankrupt in the last while. That does not necessarily mean that Fine Gael is telling the Minister to immediately privatise the airline. That would be an important decision and the Minister would have to weigh up all the options before doing so.
The Seanad proved its worth in the past few weeks. When this Bill was going through the Dáil, we raised the rights of the workers who left Aer Lingus in the period between December 2003 and March 2004. While we might not have solved that matter, we brought it to the attention of people and perhaps that will ensure those workers will get their full entitlements.
I hope Aer Lingus has a successful future. We have praised Willie Walsh in the past for the work he has done, but I am not happy with some recent developments, particularly in regard to pilots. I am aware that my colleague, Senator Dooley, is not happy about some developments in regard to Shannon. Perhaps we need to have a more balanced debate at this stage and to revisit the issue of the future of Aer Lingus on another day, although not necessarily in this context.
Mr. Dooley: I welcome the passing of the Bill. I recognise what Senator Browne said, particularly in regard to some of the issues raised. There were delays associated with the passage of the Bill, which have had an impact in terms of those who signed the letters of commitment and whether they would be part of the ESOP at a later stage. I refer to those who have taken voluntary redundancy or those who had retired as part of the natural progression. Those concerns were raised by Members on all sides of the House. The Minister’s comments on the last occasion were welcome.
The Minister and I met a group of workers from Aer Lingus last Friday while he was in Shannon. The issues he raised and the approach the Department has taken in terms of the resolution of this matter was widely accepted by the workforce. There is still some concern that because this is open to only those members who are now part of the company or who will ultimately be part of the ESOP that the natural element of greed has the capacity, if a ballot is taken by the trustee which in all likelihood it will be, to exclude at a later stage those who have accepted voluntary redundancy under some of the current programmes or who have retired. The Department and the Minister are anxious to see this issue resolved in a manner satisfactory to all parties and I hope the Department will continue to work with the trustee and the company to ensure a resolution.
The passage of this Bill will allow Aer Lingus to move forward with its plans. Senator Browne mentioned Aer Lingus’s commitment to Government policy in respect of balanced regional development and the necessity for the company to maintain a strong base at Shannon Airport. This should be not only a base but an access point, particularly for transatlantic flights. While this is tied up in many other issues in the context of the open skies programme, there is a huge awareness across the region, in evidence at a recent public meeting in Shannon, of the necessity of a transatlantic connection to the west. It provides the cornerstone for Government policy on regional development.
Despite the fact this Bill sets out certain measures and mechanisms through which the circumstances might change, Aer Lingus must recognise it is still a State company and must deliver on Government policy. The Government has taken a strong approach to decentralisation, which I hope Aer Lingus recognises. I also hope the centralised approach which appears to be the company’s policy will be halted. In that context, I welcome the Minister’s approach and involvement as shareholder. I will not elaborate on this issue because we are concerned with the passage of this Bill.
I thank the Minister of State for giving his time in the House and for his openness and assistance in our understanding the provisions of the Bill through his detailed explanations. I also thank the officials who have been most helpful in identifying and explaining to us the thought process behind different elements of the Bill. I thank my colleagues, Senators Browne and Wilson, for their assistance in this regard.
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