Aer Lingus likely to report a loss this year - O'Rourke

Aer Lingus is likely to report a loss this year, even if there is a significant recovery in performance over the remainder of the year, according to the Minister for Public Enterprise, Ms O'Rourke.

Strong and resolute decisions are required to deal with the airline's future, she said and unless they are taken soon, "less palatable choices could emerge which would not be in the interest of the airline, its customers or its employees".

She was defending her role in dealing with the airline. Speaking during a Fine Gael Private Members' debate condemning her approach, Ms O'Rourke said she did not intend to preside over a "Cahill Plan Mark 2" which was why she was looking at all options for the national airline's future.

The Cahill plan involved widespread restructuring including cost savings, rationalisation, a Government injection of €175 million, more than 1,200 redundancies, changes in work practices and pay freezes "the consequences of which are still being felt by the airline".

Rejecting the Opposition's sharp criticisms, Ms O'Rourke said she had asked her advisers to look at alternative sale options for Aer Lingus, to take soundings from potential investors or buyers and to report back to her within a few weeks.

"This does not represent a U-turn by the Government nor does it mean that the IPO has been abandoned." Comprehensive talks had taken place with the unions and more talks were scheduled on increasing the employees' shareholding to 14.9 per cent from 5 per cent.

She pointed out the Government's commitment to the European Commission that no further State aid would be given to Aer Lingus on the approval of the State aid package in 1993.

She was determined to move the company to the private sector to ensure it has access to capital to fund new aircraft for profitable growth opportunities and to rebalance its fleet to ensure a more cost efficient mix between owned and leased aircraft.

Fine Gael's Public Enterprise spokesman, Mr Jim Higgins, who opened the debate, condemned the Minister's "total lack of vision as to the airline's role and future, her failure to protect or promote the welfare of the company over the past four years".

Selling it off did nothing to guarantee the future of Aer Lingus. "Indeed quite the reverse could well be the case." It could be reduced to a feeder airline, for transatlantic passengers through Heathrow.

Labour's Public enterprise spokesman, Mr Emmet Stagg said the lack of a coherent Government policy was posing as big a threat to the future of Aer Lingus as any of the other problems it faced. "Aer Lingus has served the nation well for more than 60 years and the prospect of Minister O'Rourke preparing to hawk the company around the world, like some Molly Malone of the midlands, has filled both staff and customers with dismay."