Aer Lingus believes a stock market flotation by the end of the year remains the best option for the airline despite comments from the Minister for Public Enterprise, Ms O'Rourke, that the planned IPO cannot now be expected until 2001. The minister conceded for the first time on Tuesday that Aer Lingus will not be floated this year.
Ms O'Rourke believes that difficulties in getting the necessary legislation through the Dail and other problems mean that it is unrealistic to expect the company to come to the market any earlier than next January, according to Department sources.
"She is hoping to get Dail time in early October, but realistically it could be late October which will delay things," said a source yesterday.
Officially the Department was sticking to its line that the time table for the Aer Lingus flotation had always been for late this year or early next year.
However, the Minister's view that 2000 is no longer an option has come as an unwelcome surprise to the company and its advisers who have made no secret of their ambition to float as soon as possible, preferably in the autumn. As recently as last week the company said it believed there was no reason why it should not make its debut on the Irish and London stock markets before the end of the year. A spokesman for the airline said yesterday that they still believed the "best possible time" to go to the market was later this year.
Support for the Aer Lingus float is only lukewarm in Government circles in the wake of the Eircom IPO which has seen more than 450,000 small investors nursing substantial losses. The company may now be concerned that any slippage in the IPO timetable could lead to it being shelved.
Aer Lingus is also keen to complete the IPO while the aviation industry remains healthy and the Irish and American economies - its main markets - continue to grow strongly.
A delay in the flotation will also set back the company's ambitious investment programme. Aer Lingus wants to invest £1 billion over the next five to seven years, the first £200 million of which is due to come from the proceeds of the £600 million flotation.
The Department of Public Enterprise stressed yesterday that the Minister's view that the Aer Lingus float will be delayed until next year was not influenced by the new inquiry into the Tuskar Rock air disaster. Last week Ms O'Rourke ordered an independent inquiry into the 1968 crash of an Air Lingus Viscount plane off the Tuskar Rock. It followed an internal investigation which found that the plane had been issued with an airworthiness certificate despite having a faulty maintenance record.
This fact was effectively covered up for 30 years and Aer Lingus did not disclose it when it reached settlements with the families of the 61 people who died on the flight. Legal action by the families could not be ruled out, according to Mrs Celine O'Donoghue, the spokeswoman for the relatives of the people killed in the crash. Although legal action was beyond the remit of the relative's pressure group, many of its members would be inclined to take independent legal action, she said.
A number of other issues are mitigating against an early IPO for the state carrier. Internecine strife between the company's trade unions has made the negotiation of an Employee Share Ownership Plan (ESOP) problematic. Up to 1,000 members of the Aer Lingus's cabin crew have indicated they want to defect from SIPTU to IMPACT which represent the airline's pilots.
The employees of the company are looking to substantially increase their 5 per cent stake in the company but Ms O'Rourke has said that they will only be offered an additional 9.9 per cent as part of the IPO process.
