Who blinked first in Aer Arann dispute?

A few brows were probably wiped yesterday afternoon after the deal that looks like it will allow Aer Arann to avoid a strike next week was agreed. But it is probably fair to say the dispute was resolved more quickly than seasoned observers of industrial relations were predicting a few days ago, when news of the row first broke.

It is more common for disputes such as this to go a bit closer to the wire before somebody blinks and decides it is time to talk.

Aer Arann had until Tuesday – as a result most sources were forecasting that it would be the weekend before serious efforts to broker a settlement at the airline got under way.

Both sides were yesterday able to claim they got something. Aer Arann was quick to stress the deal enshrined its principle that core pay could not be reviewed until the company reaches profitability next year.

Impact and the Irish Airline Pilots Association, which represented the pilots, pointed out that they had clawed back some of the ground that their members were seeking to make up and had put in place a structure that opened the possibility making further progress in this regard next year.

The nuts and bolts of the compromise are said to be complicated, but a central element was the restoration of bonuses, the net effect of which will be to put something extra in the pilots’ pockets without compromising the company’s overall position on basic pay.

The deal did not take too long to broker. Talks began at about 5pm on Thursday and the two sides were known to be very close to agreement by mid- morning yesterday. Formal statements confirming the good news were issued shortly after lunch.

It all indicates that both sides were ready to do business, but one detail that no one would share yesterday was which of them actually did blink first .

Mortgage upturn figures don't add up
The Irish Banking Federation would have you believe there has been an upturn in the Irish mortgage market, with the number of new mortgages being issued on the rise. The latest IBF/PwC Mortgage Market Profile published yesterday pointed to a "significant increase" in new mortgage lending. The report also highlighted 0.1 per cent growth in the number of new mortgages issued in Q2 of this year compared to the second quarter of 2012. It said this is the first time year-on-year growth of any kind has been recorded in the second quarter since 2006.

The truth of the matter though is that while the number of mortgages issued grew by 0.1 per cent, the value of them declined by €6 million. What’s more, 0.1 per cent growth is on average just four mortgages. Thus, on this scale there were just four more mortgages issued in the second quarter of this year compared to the second quarter of last year. So in effect the mortgage market has really flat-lined.

The “significant increase” the report discusses is the rise in new mortgage lending between Q1 and Q2 of this year. Some 2,068 mortgages to the value of €331 million were issued in the first three months of this year, while 3,229 mortgages worth €518 million were issued in the second quarter. However, the first quarter of every year is always the weakest and even at the height of the boom fewer mortgages were issued during the first quarter compared to the other three, as accepted in the survey statement.

Finally, if all the figures are to be taken into account, the number of mortgages being issued seems to be declining. In the first half of 2009, when the downturn was in full-swing, 23,683 mortgages were issued.

This figure amounted to 14,781 in the first-half of 2010, 6,810 in the first-half of 2011 and 5,855 in the first-half of 2012. This year just 5,297 mortgages were issued in the first-half. Where is the significant increase and growth in that?

Is the worm turning for INM?
When Independent News & Media (INM) fought earlier this year to scupper a rights issue at APN, the Australian publisher in which it holds a 29 per cent stake, the conventional wisdom was that it was solely because the Irish group could not afford to participate. But had INM also seen something the rest of the market had missed?

The conventional wisdom seemed logical enough. Back in February, INM was labouring under more than €400 million of debt. The snap Aus$120 million (€82.6 million) rights issue proposed by APN’s board meant INM would have had to ferret down the back of the couch for cash it couldn’t afford to hand over, or face being almost wiped off the register.

INM, with the help of some other shareholders, set its face against the APN board and sank the fundraising. APN’s chairman and chief executive, along with three independent directors, walked the plank.

Since then, the new chief executive Michael Miller has cosied up to Denis O’Brien, INM’s biggest shareholder. They have even attended rugby matches together. The next time they meet, the conversation could well get even jollier.

APN, which has been struggling like all newspaper publishers, yesterday released a solid set of half-year results that stunned the market down under. Its revenues were up 5 per cent to $426 million, and it posted almost $13 million of pre-tax profits, against a $319 million loss the same time last year. Kangaroo-like, its share price bounced a hearty 21 per cent.

Market observers down under have been salivating since the results were released.

“Finally, I think the worm is turning,” Simon Marais of APN’s second biggest shareholder Allan Gray told a local newspaper.

“Should market conditions ever improve, earnings could really jump in APN and given its very low multiple, the share price could explode.”

If that happens, INM could be back in the clover. After having slashed its own debt pile to less than €120 million, the Irish company may now also be primed to cash in on its Australian investment. Is APN now the jewel in the INM crown?