The Government has confirmed that it is to sell a majority shareholding in Aer Lingus, and that the state will retain a significant stake in the company to protect what the statement called 'key strategic interest in the national airline'. It is estimated by stockbrokers that Aer Lingus could be worth €700m.
The Minister for Transport, speaking on the RTE nine o'clock news this evening, said the Government will retain a blocking share of at least 25% in Aer Lingus.
That would mean the Government could block any take over of the company. The other major shareholders will be the staff who hold almost 15% of the company.
The aviation action plan, published tonight, also confirms that a new pier at the airport will be built within two years. This will be followed by Terminal Two in 2009, which will be built and owned by the Dublin Airport Authority (DAA). The selection of operator of the new terminal will be decided by an open competition.
Planning work will begin immediately on a third terminal which will be independently owned and operated.
John Sharman, Chairman of Aer Lingus, welcomed the decision of the Government to sell their majority stake, saying that it will allow the airline to secure more diverse sources of funding needed to develop and build on its low cost model.
'Minister Martin Cullen and his officials in the Department of Transport have had difficult issues to resolve in air transport and we welcome today's announcements as a significant step forward. It is good news for the future development of the airline', he said.
'We now need to build on progress made to date with the unions and agree the implementation of productivity measures which can build upon the platform for profitable growth which we have established', he said,
He said there has been a capacity constraint at Dublin airport for some time and there is a need for immediate and rapid development of capacity. He added that temporary construction measures may be necessary to minimise disruption during the development stage.
In a statement, the Government said the decision will allow Aer Lingus to secure funding for new aircraft and in turn compete and win new routes.
Final specifications and costings for the second terminal will also be independently verified by a panel of experts . The aviation statement said there would be an examination of the legal framework to make the necessary changes to facilitate a third terminal which could be brought on stream when needed.
The statement says that terminal 3 would be delivered by what it called 'an open competitive process'.
The Irish Tourist Industry Confederation (ITIC) said that with additional investment Aer Lingus can upgrade and extend their fleet which will enable Ireland to compete more effectively in North America and other emerging long-haul markets.
The ITIC said the decisions made today will have very benefical results for the tourist industry - but action must be quick .
The ITIC also urged the Government to press ahead to conclude the re-negotiation of the Bi-Lateral Air Agreement with the US which limits the number of cities from which services can operate to Ireland.
