Business Opinion:Shareholders in Aer Lingus should be pleased to see the emergence of what appears to be some steel at the company. And it cannot have come a moment too soon. The events of the next few weeks will answer a number of questions that have dogged the company since its flotation.
The first is the true mettle of its chief executive Dermot Mannion. He has, perhaps unfairly, been dismissed as a colourless technocrat drafted in from the middle management of a middle eastern airline backed by the bottomless pockets of some oil sheikh.
And his behaviour to date has done little to dispel this perception. But it must be said in his defence that keeping a low profile was not necessarily a bad thing when trying to coax the Government into selling Aer Lingus.
But, as they say, that was then and this is now. It is important that Mannion sends a signal to the market that he can lead Aer Lingus and not just manage it. Taking and seeing through a decision that has proved as controversial as abandoning flights from Shannon to Heathrow is a good place to start.
Successfully resolving the pilot strike due this week as a consequence of the shifting of the Shannon service to Belfast, will be a bigger test. His decision to use Ryanair planes to break the strike may delight a certain class of investor, but ultimately Mannion must show mastery of the Aer Lingus industrial relations environment as it exists, not as some might want it to be.
In many ways Mannion's chances of succeeding in this endeavour are bound up in the other big question that will be answered over the next few weeks as well. And that is exactly what sort of shareholder does the Irish Government plan to be?
Investors who bought into Aer Lingus at its flotation and subsequently should be able to rely on the statements made by the Government at the time, and more pertinently the contents of the prospectus which detailed the Government's position regarding the airline's slots at Heathrow.
The prospectus makes it clear that the Government will use its shareholding to prevent any disposal of the slots at Heathrow if it feels it would be detrimental for services to destinations such as Shannon. But, that is it. The prospectus is effectively silent on what happens in the current situation, where the slots are retained, but the service taken away. And given the money spent on lawyers' fees by the Government when selling Aer Lingus, we can assume this is no happy accident. If the Government was to do as many would wish and intervene to try and stop the transfer of Heathrow services from Shannon to Belfast, it would be breaking faith with those who bought shares at the flotation. But more significantly, it would be sending a message that it sees its writ at Aer Lingus running far beyond the narrow grounds set out when it sold the airline. It would at a stroke undermine the management - almost certainly forcing Mannion's departure - and cripple the company in the eyes of the stockmarket.
Anyone considering investing in Aer Lingus would have to presume that if the Government is prepared to intervene in this issue on behalf of those citizens concerned about the loss of the service to Shannon, what is to stop it, and indeed how can it not intervene the next time the airline does something that proves unpopular with a significant portion of the electorate?
Indeed, it is surprising that nobody has yet made the argument that the people of the North and northwest are as entitled to convenient connections to Heathrow and further afield as anyone else, and the Government is duty bound to intervene on their behalf and ensure the move to Belfast goes through.
The case for the Government staying out of the controversy - in its role as shareholder at least - is thus quite strong and easily made.
What is a more complex question, is whether or not it should actively back the management and thus sanction what is proving a deeply unpopular move?
It also appears, from reports over the weekend, that it's a question that the Government may have to face up to as the voting at the extraordinary general meeting on the issue forced by Ryanair may be very tight. Abstaining from the vote under these circumstances would be tantamount to voting with Ryanair and those who oppose the move from Shannon to Belfast.
It is a difficult position for the Government, but the good news is that there is only one responsible course of action. As shareholders in the company, they must vote in a manner consistent with maintaining the value of the investment they hold on behalf of the taxpayer, all the taxpayers and not just the angry taxpayers in Shannon.
Forcing the resignation of the management and indicating to the world at large that Aer Lingus is still seen as an instrument of State policy, is not the way to do that.
