Aer Lingus Gatwick hub and Mannon's parachute proves opponents of privatisation right

Just 3 years ago the Irish taxpayer was sold a line on Aer Lingus that privatistion was in the interest of Irish consumers. We were told that as a small island having 2 airlines competing would be in our interests. A private airline could develop more routes out of Ireland. The slots at Heathrow were ring fenced for Ireland. We know that when Aer Lingus set up in Belfast that the argument was that it would have benefits for Donegal and the North West. I’m pleased that Aer Lingus have recognised the madness of the decision to end the Shannon Heathrow flights and that they have re-opened that route. The argument made at the time that the Irish public would benefit from privitisation is begingin now to be seen for the ruse that it was, it was all about the company being profitable regardless. As a result the board does what it sees fit to be profitable.
So maybe Minister Dempsey may be able to tell me how does the economy benefit by having aircraft based on Gatwick to serve Dublin and Knock among other routes to be served from the British hub. These aircraft it seems were bought with money raised by the company after privatisation and now crewed by workers based outside the country. One wonders whether the customary cuplá focal will be spoken to the passengers anymore on flights inward onto Ireland from Gatwick. I remember predicting on local radio at the time of privatisation that soon the only thing original about the company would be the shamrock on the tail and unfortunately it seems I’m proved right again. I believe that many tickets on these new routes out of Gatwick are being off loaded below cost so as to compete with Easy Jet.
Aer Lingus’s history of setting up routes based on UK to European traffic hasn’t been good. In the 90’s they exploited a relaxation in rules on third country carriers by opening routes from Birmingham and Bristol to the low countries and got badly burnt. Gatwick is a huge gamble that the Irish travelling public does not have to subsidise but may suffer the consequences should the company lose significantly while attempting to expand during a recession. While Aer Lingus sits on a significant cash reserve, one more significant than many other airlines, money is no defence against bad business decisions. It already has to fund a redundancy deal and has bought more long haul aircraft than it uses. The CEO who should have understood the Middle East better lost heavily on a route to Dubai. Why did they not link with another airline flying onward to Australia through here? how does investing in Gatwick benefit the Irish economy right now?
While the popular view is that privatisation allows management take decisions in line with the market, who takes the decisions in the interest of our economy? The government have already admitted that their 25% stake holding couldn’t protect the Shannon route, so how can they influence a whole board as it sets out into the wider market? This morning's decision by Dermot Mannion to resign and take wiht him a golden handshake at a time when workers are being shed is a smack in the face for those workers who took a hit. The golden parachute has opened. Who'll miss him? Turbulent times and tears may well be ahead.

O'Leary's Aer Lingus move flies in the face of competition

You learn something new every day. I always thought Michael O’Leary supported competition. Competition or so the text books suggest is in the interest of consumers. Now however that is not the case. No one can deny that the arrival of Ryanair on the market brought development of the aviation industry out of Ireland. There is a negative side to Ryanair, anti-union, anti-disability, publicity seeking CEO, routes landing at airports remote from cities they claimed to fly to. I’ve never flown Ryanair. I choose not to fly with an airline that broke a strike but I hope that my principles don’t influence my wider view of the aviation industry given that Aer Lingus coined the phrase “enviromentaal push factors” when it was a state company to get rid experienced workers so as to get its wages bill down. Your choice if you want to fly off this island is between a strike breaker and an ageist bully. To complicate the matter one owns 25% of the other!

I don’t believe that this move is in the interest of consumers, Seamus Brennan famously saved Ryanair by awarding them Stansted at the expense of Aer Lingus. This move if it goes through will see a virtual monopoly on one of the ‘worlds busiest corridors between Dublin & London in favour of Ryanair. This plan may be in the interest of Ryanair’s shareholders many of them who live outside the state but its not in the interest of Ireland nor the consumer.

However Michael O’Leary is smart to the wider reality. The reality is that Brian Cowen’s disastrous tenure in Finance has seen tax revenues plummet and that the government needs money. There is a chance that the €175M price tag on the government 25% share would now tempt the government into selling leaving O’Leary owning over 50% before he buys shares on the open market. The ESOP will then be isolated and marginalised. If that happens I expect that Michael will immediately restore Heathrow flights out of Shannon.

I remember being on South East Radio when FF went for privatisation and I forecast that within a few years Aer Lingus would end up being a shamrock on the tail of an aircraft. It seems that Michael O’Leary the well known taxi-driver from Mullingar was listening and now the wheels have been set in motion!

I hope that Ryanair’s plan is shot down. When Ryaniar outgrew our local regional airport here in the south east they weren’t long upping sticks and leaving the region high and dry because it was in the interest of the shareholders. Nothing that has happened in the 20 years since has changed Ryanair’s priorities. Competition is just a fanciful ploy used by a company to boost sales. They’re only interested in themselves. Replacing a state monopoly with a private monopoly is a waste of time and exposes the neo-liberal economic view for the sham it is.