Government refuses Aer Lingus intervention

The Government has said it is "inappropriate" for it to intervene in the decision-making process of Aer Lingus and that to do so would "ultimately be damaging to the company and its customers".

In a statement issued this evening, the Government said it remains committed to the Shannon region following the decision taken by Aer Lingus last week to move its Shannon to London-Heathrow slots to Belfast.

Speaking on behalf of the Government, Minister for Education Mary Hanafin said the decision to float Aer Lingus on the stock market was taken "in order to enable the airline to grow and compete effectively in a highly competitive aviation market".

"Ireland's interests are best served by dynamic competition, with Aer Lingus as a strong player," she said.

The Minister said, however, that the Government "is particularly disappointed with the recent decision of Aer Lingus given the company's long commitment to the mid west region".

"We remain committed to ensuring the connectivity of Shannon and we will continue to promote the business and tourism interests of the mid-west through targeted investment in education, infrastructure, industry and tourism promotion."

The statement said the Government's priority "is to keep the mid-western region connected with key international business and tourism markets".

"In 2005 the Government took the decision to float Aer Lingus. This decision was taken in order to enable the airline to grow and compete effectively in a highly competitive aviation market. Ireland's interests are best served by dynamic competition, with Aer Lingus as a strong player."

Ms Hanafin said that as a listed plc "Aer Lingus has to take it own decisions".

"It is inappropriate for the Government to intervene in the decision making of a private company. To do so would ultimately be damaging to the company and its customers."

The statement said Ireland has been "well served by having open competition between airlines in a fully liberalised environment".

"Fares have fallen over the years as a result of increased competition and the travelling public now enjoy a broad range of air services to the UK, Europe and beyond from all three State Airports as well as the country's network of regional airports.

"These benefits are clearly evident at Shannon which now has an extensive range of direct services to European destinations along side its traditional trans Atlantic services."

The lobby group of business and tourism interests set up this week to campaign against the Aer Lingus decision to cut the Heathrow routes from Shannon said it was disappointed with the Government statement.

Atlantic Connectivity Alliance said it "reaffirms its intention to have this decision overturned in the best interests of Government policy for balanced development across all regions".

"We will continue to work vigorously to ensure an early and successful resolution is achieved by whatever means possible," the group said.

Fine Gael said Ms Hanafin's comments this evening "completely contradicted" remarks by her Cabinet colleague Willie O'Dea.

Limerick East TD Kieran O'Donnell said: "As Mary Hanafin's statement this evening shows, the Cabinet is completely at sea on Shannon with Ministers giving opposing statements and nobody taking responsibility for this crisis."

"It is clear that the Minister is standing full-square behind the Aer Lingus board decision to pull the plug on the Shannon-Heathrow route. She also stated that she is confident Shannon will find alternative routes but this flies in the face of Willie O'Dea's attack on Noel Dempsey when he claimed the new Transport Minister has not been fully briefed."

The Labour Party said the Government statement "will cause real anger all over the country".

Labour's deputy leader Liz McManus said: "The government has exactly the same rights and entitlements as all other shareholders in Aer Lingus. The original decision to privatise Aer Lingus was a political one. The decision not to exercise their rights is similarly a political decision. There is no legal or other obstacle to the government voting at the planned extraordinary general meeting to have the Shannon decision overturned."

Ms McManus said it was "extraordinary" that the government should continue to wash its hands and ignore the warnings from business, industry, tourism and the trade unions of the potential damage that she said would be caused if the Aer Lingus decision is allowed to go ahead.

Separately today, the Aer Lingus employee share-ownership trust (Esot) said it will seek a meeting with the airline's management to discuss the withdrawal of its Shannon-to-Heathrow flights from next January.

Esot said it had met to consider the Aer Lingus decision, and that the company's articles of association require an EGM to authorise the disposal of the Heathrow slot.

Ryanair, a 25 per cent shareholder in the rival airline, has already called for such an EGM with a view to forcing Aer Lingus to reverse its decision.

Ryanair chief executive Michael O'Leary said this week that a vote by the Government, as a 25 per cent shareholder in Aer Lingus, along with the Esot, could force such a change in any vote and that Ryanair would be happy to abstain.

In its statement, the Esot said it "is very concerned" at the Shannon-Heathrow decision and "is conscious of the need to protect the value of the Aer Lingus brand".

A spokeswoman for Aer Lingus said: "We are agreeable to meet with the ESOT, once we receive formal notification from them."

The board of the Shannon Airport Authority also said this evening it has written to the Minister for Transport Noel Dempsey asking him to intervene in the "crisis" to expedite a solution to the issue "as a matter of urgency".

The Impact trade union said tonight that Aer Lingus has rejected an offer from its pilots to stand down their 48-hour strike scheduled for next Tuesday and Wednesday if the airline reciprocated by standing down its moves to recruit pilots for its Belfast base on lower pay and conditions than their Dublin counterparts.