The Government is to press the European Union to approve national aid packages for airlines - including Aer Lingus - hit by the collapse in transatlantic air traffic, Government sources said last night.
The Cabinet has also set up a special subcommittee headed by the Taoiseach, Mr Ahern, to monitor the economic effects here of the terrorist attacks in the US.
The approach was agreed after the Minister for Public Enterprise, Ms O'Rourke, briefed her colleagues yesterday on the financial crisis facing the State airline. Its difficulties will be raised during next month's meeting of EU transport ministers but assistance for Aer Lingus will first require the company to agree a cost-cutting package with unions.
Senior figures in the European Commission's Competition and Transport Directorates-General strongly oppose new aid packages, despite the US government's decision last week to offer a $15 billion (€16 billion) aid package to its major airlines.
Ms O'Rourke will meet her Belgian counterpart, Ms Isabella Durant, in Brussels next Monday. As president of the EU council of transport ministers, Ms Durant is co-ordinating the response to the current crisis within European aviation.
Meanwhile, the Department of Public Enterprise has told airports that the State will provide them with cover for war risk. Last week, EU governments offered a similar concession to airlines after insurance companies increased premiums by a thousand-fold.
Ms O'Rourke will give Ms Durant an up-to-date report on developments within Aer Lingus, which has cut services by 25 per cent on the back of a 75 per cent fall-off in transatlantic business.
The Government, meanwhile, as the 95 per cent shareholder in Aer Lingus, is reviewing its options in the light of the financial injection made by the Treasury in Washington to stricken US airlines - including $5 billion in direct cash allocations. Against this background the two main unions in Aer Lingus, SIPTU and IMPACT, are insisting that EU rules do allow State intervention in times of national crises be lifted.
But there are clear differences between the two unions on overall policy affecting the State's position as shareholder. At Tuesday's seminar in Liberty Hall, SIPTU persuaded representatives of the political parties present ( all except the PDs sent a representative) to support a proposal calling for a moratorium of up to four years on Government plans to privatise the national airline.
TDs from Fianna Fβil, Fine Gael, Labour and the Green Party present were all in agreement.
IMPACT, however, in a letter to Ms O'Rourke on the day of the SIPTU seminar, noted: "We view the Government as reluctant owners and see the current Government policy as an intent to sell. We do not see the current crisis as an opportunity to undermine that policy."
IMPACT pointed out that a 1994 European Commission statement explicitly allowed State help "under exceptional circumstances, unforeseeable and external to the company".
