The Government was warned six weeks ago that the senior management of Aer Lingus would leave if the company was not properly financed.
A confidential report on the future of the airline prepared by merchant bank Goldman Sachs - and delivered to the Government in the autumn - predicted that "the retention of the incumbent management is likely to be put at risk without access to new capital for the company".
The chief executive of Aer Lingus, Mr Willie Walsh, announced on Tuesday his intention to leave the airline next May along with the chief financial officer, Mr Brian Dunne and the chief operations officer, Mr Séamus Kearney. The three men gave no reason for their departure, but Mr Walsh subsequently said the funding of the airline was one of the issues involved.
According to Goldman Sachs, the management did not believe borrowing money to fund the expansion of the fleet in the absence of fresh capital was a viable strategy. Loading the balance sheet with debt to buy new planes would undermine the low- cost base that has allowed the airline to compete with Ryanair and other low-cost carriers, according to Goldman Sachs.
The bank also warned that the departure of the senior management would effectively rule out any partial sale or stock market flotation of Aer Lingus in the short to medium term "because investors would need a reasonable period to evaluate a new management team". Goldman Sachs does not specify a time frame, but Dublin stockbroking sources have ruled out any such move for a year at least.
The Goldman Sachs report also contradicts the view - voiced in the Dáil this week - that the three men were motivated by the desire for "personal enrichment".
The Taoiseach has linked their departure to the Government refusing their request to be allowed put together an investment proposal for the airline. Goldman argues that while "alternative ownership structures" would provide more attractive remuneration for the management, "the status quo in this regard is not seen as a material impediment".
