Madam, - Brian Geoghegan (September 6th) criticises my letter of August 30th for "economic stupidity" and refers to my "outdated mindset" (whatever that might be). But his letter is factually wrong on almost all points.
His suggestion that the pension deficit facing Aer Lingus is a result of the "incompetent financial management of this semi-state dinosaur" may sound convincing, but it ignores the fact that pension deficits are an international problem faced by very many large companies (including British Airways, which was privatised 20 years ago).
His claim that any business leader in the private sector who presided over such irresponsibility would be jettisoned by shareholders is also wide of the mark, since the reaction of most of these companies has been to simply, cancel or curtail the pension benefits owed to their workers. I know of no company that has sacked its senior management as a result of its pension deficit. The idea that Aer Lingus has been financially mismanaged is very odd, particularly in view of its success in recent years when it generated large profits and expanded its route network while many other airlines were suffering massive losses.
The truth is that pension deficits are a result of poor stock market performance since that is where pensions are invested. Whether they have been invested there by a private or a state-owned company is irrelevant.
Mr Geoghegan calls for my "mindset" to be challenged as the "reality is that privatisation works" and "delivers value and efficiency for the average man on the street". Does it really? What example of the privatisation of a large national asset by our Government has done that? Need we be reminded of the disaster of Eircom? Surely nobody could consider that a success for Ireland. Its lack of investment in infrastructure - a direct result of putting shareholder value ahead of the country's strategic interest - has resulted in us having one the lowest broadband uptake levels in the EU along with some of the highest charges for basic phone service.
It is not I who am "wedded to an ideology" but Mr Geoghegan, who believes that everything except the services that he decides are essential should be privatised. I believe that the possible merits of any privatisation need to be examined individually for each semi-state organisation so that each decision can be made on a sound economic and strategic basis, not an ideological one.
Mr Geoghegan's claim that "the only other countries involved in the state ownership of airlines are Cuba and China" is simply untrue. State ownership of airlines is still widespread, ranging from 100 per cent ownership of companies such as Dermot Mannion's previous employer Emirates Airlines to smaller holdings in companies such as Air France-KLM.
Selling Aer Lingus for a few hundred million euro would be a foolish move and one which I believe, like the sale of Eircom, would be deeply regretted in coming years.
- Yours, etc,
DIARMAID MAC AONGHUSA, Shankill, Co Dublin.