The prospects for a successful flotation of Aer Lingus are fading. A combination of factors now mean that if it happens at all, it will most likely be in September.
The original target of a summer stock market debut for the national airline now looks at best fanciful. The company and the Government have failed to make progress on a number of fronts, the most significant of which is resolving outstanding industrial relations issues, such as the deficit in the company pension scheme and a mechanism that will allow staff keep their 14.9 per cent stake after flotation.
Without clarity over these issues, the company is simply not a credible investment prospect. Other preconditions set by the Government for a sale, such as protecting direct flights from Dublin to Heathrow have not been addressed either. External factors, notably soaring oil prices have also had a bearing, with investors now decidedly nervous about the prospects for airlines, including established low-cost carriers such as Ryanair.
The final nail in the coffin of a summer flotation was the initial public offering of shares in German carrier Air Berlin earlier this month. The German airline - which has some similarities to Aer Lingus - was forced to cut the price of its shares dramatically in order to ensure that its flotation went ahead. Aer Lingus's advisers are pressing ahead with the preparatory work for an autumn flotation, but there is no assurance that market conditions will have improved by then. In addition, Aer Lingus may also have to produce up-to-date accounts which will reflect the effect on profits of higher fuel prices. Add to this further foot dragging on the pensions and related issues by Siptu, the company's largest union, which is resolutely opposed to the sale, and there are few grounds to be optimistic about the prospect for a successful flotation in the autumn.
Many would not be displeased by such a turn of events, including some at the Cabinet table. It might be giving them too much credit to assume that they engineered this state of affairs, but without a doubt the airline has been failed by its major shareholder. If Aer Lingus is to prosper it needs fresh investment and commercial freedom. The overwhelming consensus is that the sale of the airline is the most viable route to this objective, and when this was first mooted over two years ago by former chief executive Willie Walsh the company would have got an enthusiastic reception from the market.
Instead we have had two years of prevarication and the abdication of responsibility which has led to the current sorry pass and once again put the airline's future in peril.