Unions at Aer Lingus have said there is no legal impediment to the State investing in Aer Lingus if the airline requires fresh capital.

Several senior trade unionists yesterday told the Joint Oireachtas Committee on Transport it was wrong to suggest that Government investment amounted to a form of State aid.

Mr Liam Berney of the Irish Congress of Trade Unions said: "Congress sees no reason why the State should not invest directly in what is a hugely successful company."

"There are those who argue that such an investment is illegal and against the state aid rules of the EU. Of course this is untrue, there is no legal impediment preventing the State investing in the airline," he said.

His comments were echoed by Mr Michael Halpenny, national industrial secretary of SIPTU, who said that while aid to "ailing companies" was prohibited, investing in a viable company was "entirely in conformity with EU competition rules".

"It is necessary to re-state this because there has been some confusion - some inadvertent and some deliberate," he claimed.

Mr Shay Coady, a senior official from Impact, said the industrial relations climate at the company was very poor and about 30 pilots had not been given any work to do, while others were getting extra money for doing extra work.

He said Aer Lingus could become an "industrial relations flashpoint" in the period ahead.

Ms Olivia Mitchell, the Fine Gael transport spokesman, questioned whether investors were interested in airlines in the current climate. She said the unions did not seem to be suggesting new forms of thinking at the airline. But she agreed it must be frustrating for the unions and staff to be waiting for a decision from Government.

Sen Tom Morrissey, Progressive Democrats, said the consumer barely featured in the union submissions. "Aer Lingus is not about employment, it is about a service," he said.

Ms Róisín Shorthall TD, Labour Party transport spokeswoman, said the airline had not handled the recent announcement about job losses well.