Buy-out proposal adds to long week in transport for Brennan

If a week is a long time in politics, it is an extremely long time in the life of the Minister for Transport, Mr Brennan.

If a week is a long time in politics, it is an extremely long time in the life of the Minister for Transport, Mr Brennan.

News last night that top managers in Aer Lingus are seeking his consent to develop a bid for the State airline came not long after the NBRU threatened to cripple CIE's bus and rail services in a strike over his reform plan.

On Thursday, he saw off a threatened revolt on the Fianna Fáil backbenches over his controversial plan to break up Aer Rianta, which is also opposed by trade unions.

A day earlier, while launching Luas, he was on the defensive over the spiralling cost of the national roads programme. If that was not enough, he introduced new measures on Sunday to compel taxi drivers to wear safety belts in their cars.

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Now he is faced with a surprise approach for Aer Lingus, which will only up the ante with the NBRU. The prospect of a semi-State boss making his own company private epitomises all that the union sees as unacceptable in Mr Brennan's plans to privatise bus routes in Dublin Bus. It is the appalling vista.

For Mr Brennan, this presents a knotty industrial relations problem made worse by the Government's dithering on Aer Lingus.

It is more than a month since Mr Tom Mulcahy stood down as chairman of the airline but no replacement has been found. This left Mr Brennan with no option last night but to indicate that one of the existing directors will act as interim chairman.

This is a result of the Government's steady-as-she-goes approach to the airline since its recovery, which sees Aer Lingus having nowhere near the commercial freedom it says it needs. It is far too slow for Mr Walsh, who wants to seize his moment now, in advance of any downturn.

The ball now falls to Mr Brennan and his colleagues in Government, who are faced with a novel proposal from a management team that has done all and more than the Government asked of it.

If Mr Walsh's excellent record at the helm of the company means it will be difficult to disagree with his proposal, it will also be difficult to agree with it.

"What we're talking about here is three public servants making a bid for a State asset. We're in unchartered water here," said one senior person in Government circles.

The Eircom example proved that flotations of State companies can be politically dangerous, with small time investors the big losers. Even in the absence of an established process, an MBO seems more perilous than that because the management will inevitably be cast as the biggest beneficiaries.

State investment in Aer Lingus is ruled out by EU law, but is it appropriate to give managers the first shout in the auction?

Two questions for Mr Brennan: Is an MBO at Aer Lingus in the airline's interest? If so, is this in the public interest?

If he finds for Mr Walsh, it will be a diffult case to make. More long weeks ahead.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times