THE GOVERNMENT should sell its 25 per cent stake in Aer Lingus to Ryanair or face the risk that Aer Lingus’s major assets will be sold off in time by foreign competitors, Ryanair’s chief executive Michael O’Leary has declared.
Five years ago, he said, Ryanair had offered the government “almost three times what they say today they would accept” for the State’s stake in Aer Lingus – a bid that eventually ran foul of the European Commission.
“If the Irish Government had any sense they would sit down and ask what is the best for Ireland Inc going forward. It is clearly to merge the two Irish airlines. We are the only people who can run Aer Lingus successfully.
“The Irish should sell its stake immediately, it should be sold to the highest bidder, along with a whole series of underperforming State assets, which have all been run badly over recent years,” the outspoken executive went on.
“If it is not sold to Ryanair, if it is sold to anybody else, it is inevitable that Aer Lingus will be broken up because everybody else only wants certain bits: the Heathrow slots and maybe the long-haul. Nobody wants the short-haul, because they will have to compete with Ryanair,” he said.
He warned Aer Lingus management not to make any further contribution to the company’s pension scheme. “[They have] no further obligation to increase contributions and the board and management should tell the trustees, ‘Tough, on your bike’.”
The Aer Lingus IPO document in 2006 and “every document since is absolutely unambiguous”, he said. “It is a defined contribution pension scheme. To take some of its €800 million cash-mountain and give another gift to the employees for the fourth time in four years is ludicrous.”
“We will be very unhappy if they put money in.
“If they do that, we think they are in breach of their fiduciary duty to shareholders and we are already working on a legal action against the board and the company to protect the interests of shareholders,” he went on.
He also labelled proposals backed by London’s mayor, Boris Johnson, to build a new airport in the Thames Estuary as “complete and utter bloody lunacy”.
A third runway should be built at Heathrow and a second at Gatwick, he said.
