Madam, - Aer Lingus is one of the most profitable airlines in the world. It is valued at around €1 billion, and made an operating profit of €107 million in 2004. In spite of increased costs, it is expected to return a healthy profit in 2005.
It is a publicly owned company with a remarkable performance in recent years in the cut-throat world of aviation. Now the Government proposes to sell off a majority share in the airline.
Unfortunately, there will be little if any capital investment generated by the transaction as private investors will want a big discount to compensate for buying into a company where staff have a considerable shareholding and where the Government intends retaining a "controlling" share (whatever that means).
What will happen is simply that Aer Lingus, having been largely sold off at a knock down price to venture capitalists, will still have to go and borrow the money it needs for fleet renewal.
There is nothing under EU law to stop the Government investing in Aer Lingus as a highly viable company (which it clearly is). Astonishingly, it already invests in several other airlines through the National Treasury Management Agency (including Ryanair, American Airlines and Cathay Pacific).
The last time the Government did something like this was with Eircom. The Exchequer made a short term profit on the backs of 400,000 small investors. It is unlikely this time around that the Exchequer (i.e. us) will make any gain out of it. When the venture capitalists take over will this country's strategic and business interests be in safe hands? If you look at the Eircom and Irish Ferries experience, it doesn't look likely.
It is time for the Government to think again before it is too late. - Yours, etc,
DAVE O'CONNOR, Ennafort Drive, Raheny, Dublin 5.