Tuskar issue may cloud Aer Lingus flotation

Aer Lingus may have to flag a multi-million pound potential liability arising out of the 1968 Tuskar Rock crash when it goes to the stock market later this year.

A source close to the Initial Public Offering said that the directors of the company will have to address the issue of the airline being sued by relatives of the 61 people killed in the crash. "Any material risk will have to be disclosed in the flotation prospectus," he said.

It was revealed last Tuesday that key evidence about the airworthiness of the ill-fated Aer Lingus aircraft, the St Phelim, was inexplicably left out of a 1970 crash investigation report. The irregularities in the aircraft's maintenance record were not disclosed to the relatives of the crash victims when they negotiated compensation payments from the airline. A spokesman for the airline said yesterday that they were still studying the report but refused to comment on the possibility that the airline might be sued by relatives of the people killed in the crash.

Any actual or potential litigation will have to be disclosed by the airline in the run up to the flotation pencilled in for later this year, he said.

The report published last week concluded that there were serious errors in the maintenance operating plan of the aircraft and that "these errors originated with Aer Lingus".

A fresh investigation into the crash has been ordered by the Minister for Public Enterprise, Ms O'Rourke. It emerged that the plane, a Vickers Viscount, was issued with a airworthiness certificate by the Department of Transport and Power three weeks before the crash despite the absence of key documentation about its level of maintenance. On March 24th 1968 the plane was on a flight from Cork to London when it plunged 17,000 feet into the sea near the Tuskar Rock off the Wexford coast. The Department may also face legal action as a result of its decision to issue the certificate despite the irregularities with the Aer Lingus paper work.

The Minister said last week that she was deeply disturbed about the revelations which raised serious matters requiring further investigation. The new investigation, being carried out by two independent international experts, is due to be completed in November, at which stage the IPO process should be well under way.

Relatives of the passengers and crew killed in the crash plan to meet in the next two weeks to discuss their response to the report published by Ms O'Rourke this week. Combined legal action by the relatives' group is unlikely as the purpose of their campaign was only to seek information about the cause of the crash, according to Mr David O'Beirne, the son of the plane's pilot, Mr Barney O'Beirne. `It was not about money,' he said.

It was impossible to rule out legal action being taken by individual relatives. "They all have their own solicitors," he said.

Aer Lingus hopes to have completed its IPO by the end of the year. The Dail is due to pass the enabling legislation when it returns in October, which will allow the process to get under way in earnest.