February 17, 2011
By Staff Reporter
Happily, however, the Irish government has finally managed to get some wind in its sails regarding Aer Lingus.
The upshot is that some, but not all, of the Irish flag carrier is going to be put up for sale.
The percentage on the block looks as if it will be at least fifty but, as has been the case in this saga all along, there could be one more final version of the plan lurking around the corner.
Still, it would appear certain now that as much as 60.1 percent of the carrier could be sold to a private investor or investors.
The latter route would appear more likely by way of a market flotation aimed at attracting both institutional and individual investors.
Under the proposal, the Irish government would retain 25 percent of the airline while 14.9 percent would be owned by Aer Lingus employees.
This is not a bold plan. It is, quite clearly, a compromise. But it may turn out to be feasible one both in a political and economic sense.
There’s a considerable variance in political opinion as to the future shape and direction of Ireland’s air links with North America and other regions of the globe.
It varies from outright privatization of Aer Lingus, and indeed parts of the country’s airports, to the retention of complete state control.
The latter course would appear a strange one to American eyes. Yes, the federal government does have an important role in U.S. aviation, but it is mostly confined to a safety and regulatory one.
The airline business here is a private affair.
As a result, some carriers thrive, some fail. Travelers enjoy the benefits of competition though they must also bear the burden of an airline’s inability to compete.
Ireland does not have nearly as many carriers flying in an out of its airspace.
Additionally, there are only two specifically Irish-owned airlines of any significant size, Aer Lingus and Ryanair. And of these two, only Aer Lingus covers the Atlantic.
Of course, it should be noted that the air routes to Ireland are now also flown by a number of major U.S. airlines — Continental, Delta, U.S. Airways and the latest arrival, American Airlines.
The growing interest of such global-reach carriers has been one of the most positive developments in recent years.
And their entry into the U.S./Ireland air corridor has resulted in a degree of competition that has been only good for Aer Lingus.
Regardless of their presence, however, a failure of Aer Lingus would remove any Irish say in the maintenance of this vital North Atlantic air bridge.
And that bridge, given the central role that U.S. companies have played in Ireland’s economic miracle, is in constant need of attention and improvement.
It has been stated before on this page that privatization of Aer Lingus does not mean evisceration of the airline.
Aer Lingus does indeed deserve its chance to fly free from overweening government control, if not yet the ultimate safety of a government guarantee.
So the Irish government’s move, late in the day though it has come, is indeed welcome.
Aer Lingus requires new aircraft. Fleet expansion will require top-class management, good industrial relations, high morale among employees and the freedom to fly any routes around the world that make economic sense.
The first step has been taken. A viable partnership between the private and public sectors is presumably the Irish government’s intended goal.
We have yet to see the final outcome. But at least a definite start has been made. The future Aer Lingus has made it to the runway. Next up, the take-off.