February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — Financial advisers examining the options for the future of Aer Lingus will present their report later this week, according to Public Enterprise Minister Mary O’Rourke
The minister said her own preference for the troubled airline was a stock market flotation, but only when the market improved.
"I think that that would be best way forward, but I readily acknowledge that the markets and timing may not be right now."
The government has decided the airline should no longer be publicly owned. The advisers have also been asked to examine the outlook for a "trade sale," involving another airline, or any other means of raising finance.
This year, the foot-and-mouth crisis and the international economic downturn have hit the airline’s revenues. But EU law forbids any state aid for the company.
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A series of labor disputes and the firing of its chief executive for alleged sexual harassment have added to the airline’s problems.
O’Rourke said the company would be reporting losses for this year.
"That rings alarm bells because none of us want to go back to the early ’90s when it was rescued at huge cost," she said.
The minister said the aviation industry is currently in a state of global decline and that despite its many problems, Aer Lingus is doing well compared to some European airlines.
Two years ago, the government rejected a possible purchase of a 10 percent stake by British Airways. Aer Lingus is a member of the Oneworld alliance with the British airline.
Aer Lingus needs at least £150 million to update its fleet and modernize its operation. It was originally believed that a flotation would raise about £500 million.
The minister accepted financial losses by 500,000 people who bought shares in the privatization of former state telecom company, Eircom, would make ordinary investors wary about an Aer Lingus share offer.