Aer Lingus will be in the "best possible condition" to float on the stock exchange later this year, its acting chief executive said yesterday. Mr Larry Stanley was speaking to the Oireachtas Joint Committee on Public Enterprise and Transport where a number of TDs questioned the merit of the proposed initial public offering.
Fine Gael's transport spokesman Mr Ivan Yates TD warned that the flotation might fail and said the airline might be sold "on the cheap" to ensure a successful stock market introduction. "It's inherently a strategy fraught with risks and dangers . . . There may be negative sentiment about it because of Eircom."
Labour Party TD Mr Emmet Stagg said he saw no reason for the proposed privatisation. "We'll stop this if we get into government," he said.
A Fianna Fail backbench TD, Mr Dick Roche, said there appeared to be no ideological reason for the flotation, adding that the State had little need of the money it would generate. Neither was it being driven by the airline's management.
Mr Stanley said Aer Lingus was seeking to float because it needed to invest about £1 billion (€1.27 billion) in the next five years. Borrowings and retained profit would generate £800 million of this and the State-owned airline hoped to secure the remaining £200 million in its proposed flotation.
"We have been told firmly by the Government that it will not put another penny into Aer Lingus," said Mr Stanley.
While acknowledging a degree of uncertainty in stock-market activities, he said analysts were expecting a turnaround in the world aviation industry in the second half of the year.
"The timing would be excellent in late 2000 or early 2001. We believe it would be in the best possible condition if it goes later this year," said Mr Stanley. He declined to speculate on the value of the company when floated. However, it has been estimated at between £400 million and £600 million.
The airline's chairman, Mr Bernie Cahill, said he expected a new chief executive, to replace Mr Garry Cullen who resigned last February, to be in place in June or July.
Mr Stanley said about 10 per cent of the airline's stock may be available to its staff in an employee share option plan (ESOP). The staff already holds 5 per cent of the company as part of arrangements introduced at the time of the Cahill recovery plan in the early 1990s. The employee share-option plan was likely to be administered by a trust, he said.
