After years of dithering the Government has given the final go-ahead for the privatisation of Aer Lingus. Barring some last-minute hiccup the airline should debut on the Dublin and London stock markets next month.
Over the coming weeks the Government's advisers will test the waters before making a recommendation on the price at which the shares should be sold. The guidance being given at the moment is that the company will be worth somewhere between €800 million and €900 million. Achieving a valuation at the higher end of this range will require some luck and a great deal of persuasion. The Government must keep its fingers crossed that we do not see a repeat of the recent terror scare at Heathrow before the flotation is safely away.
Investors will also require some convincing that the airline's strong performance in recent years will be replicated in the future. A number of factors militate against this, not least the spiralling price of oil. Others include the two-edged sword that is the liberalisation of passenger aviation markets. An open skies agreement in the near future may open up new markets for Aer Lingus in the United States, but it also gives US airlines more access to Ireland.
The credibility of the company's management will also come in for scrutiny. In many ways Aer Lingus goes to the market riding on a reputation built under former chief executive Willy Walsh and his team. The current team led by Dermot Mannion must convince investors they can fill their shoes.
The extent of these challenges has led some to question the wisdom of a sale at this point. And indeed it does look a little dogmatic given the deterioration in sentiment in the aviation industry in the last 18 months.
They argue that the taxpayers, who are the ultimate owners of the airline are not going to get the good value if they sell now. And they are probably right if you look merely at the valuation that might have been achieved under the previous management and a more benign backdrop last year or the year before.
It is really a case of better late than never. The main arguments for selling the airline remain compelling. It needs access to fresh capital and that in reality can only come through the introduction of new shareholders.
It also needs, and arguably deserves, the commercial freedom that will come about through the end of State ownership. The Government will retain a sufficiently large stake to block any significant moves, such as a takeover, but will not be able to intervene in the day-to-day running of the company. A number of other outstanding issues such as the deficit in the company's pension scheme will also be addressed.
The sale of our national airline marks a key day in our national history. Taxpayers may not do as well as they hoped, but they still stand to reap the significant long-term dividends that will come from an independent and well-financed Aer Lingus. How times have changed.