Implications: The departure of Mr Willie Walsh and his top management team from Aer Lingus creates a major headache for the Taoiseach, Mr Ahern, as he wrestles with the strategic options for the State airline.
Only a day after Prof Aidan Halligan decided against taking on the mammoth task of reforming the health service, the news is unwelcome for a Government which had hoped to dominate headlines this week with a social-friendly Budget estimates package.
Uncertainty now pervades the Aer Lingus story, months after the Government put the decision on its ownership and strategic direction into the realm of a Cabinet sub-committee.
The sub-committee shows no sign of making its choice, a clear indication that the Government sees red warning lights in the airline's demand for hundreds of millions of euro in investment.
The process will be all the more difficult now that Mr Walsh is leaving. In a market already under pressure from rising oil prices, his departure will have only a downward impact on the price the Government could extract for Aer Lingus.
Yet, the management vacuum in Aer Lingus was not even discussed by the Cabinet at its weekly meeting yesterday.
If that suggests that the questions surrounding Aer Lingus are a long way from the top of the priority list, the Government spokeswoman said last night the issue would have been discussed if the Minister for Transport, Mr Cullen, had been in attendance.
Mr Cullen was in his office with Willie Walsh, Séamus Kearney and Brian Dunne when the Cabinet met. The Minister, only weeks into the portfolio, heard at that meeting that the resignations were definitive and not intended to be a ruse to trigger a decision from the Government.
It is understood that Mr Walsh and his colleagues chose to signal their exit from the airline now because they had a growing sense of "unease" in the Government at the pace and direction of their reform programme. The absence of a Government decision in the face of an immediate requirement for investment was another factor.
Whatever it was that triggered the final decision, the three men felt they had done as much as was possible at this time.
Their reform project, initiated in the crisis-ridden days that followed the September 11th attacks on the US in 2001, has brought about a remarkable turnaround in the fortunes of Aer Lingus.
But the progress came at a cost, with thousands of workers taking severance packages.
If residual unhappiness about the loss of jobs serves to pressurise Mr Ahern in north Co Dublin, the Taoiseach's claim to be a Socialist and the demotion of Mr Séamus Brennan from transport do not augur well for those who favour private investment in Aer Lingus.
While the resignations seemed inevitable from the moment the three men withdrew their investment proposal last month, they had picked up the message that Mr Ahern has no appetite for privatisation. According to some, the Eircom debacle still looms large in his mind.
For all that, Mr Ahern knows reluctance to sell off another prized asset must be measured against the airline's demand for capital.
If the Government is highly unlikely to spend money on planes when the hospital service seems in perpetual crisis, then the only option is to seek private money.
Given the poorly condition of airline industry generally, a strategic alliance with another player is not going to happen. This means the only other option is to sell a chunk of Aer Lingus to an investor.
This issue could well cause friction in the Coalition. The Tánaiste, Ms Harney, has made it clear that she sees this as a definite option. As ever, Mr Ahern's view is difficult to pin down. But if he had any realistic interest in choosing that route, he would have done so sooner.
Aer Lingus now faces a leadership vacuum of huge proportions. Its top management team is about to leave and its chairman, Mr John Sharman, is in the job on interim basis only.
Again, the failure to find a permanent chairman in the months since the departure of Mr Tom Mulcahy only serves to exacerbate the new difficulties prompted by Mr Walsh's decision to quit.
While uncertainty abounds, the positive outcome is that the Government now has no choice but to makes its decision.
Knowing Mr Ahern's penchant for indecision, some sources believe the Government will decide in principle to sell off part of the airline but wait until market conditions improve to do the deed.
A decision is expected by Christmas. The next election might not seem so far away then.
