Aer Lingus and Ryanair are the only two airlines in the world, and especially in Europe, making profits, according to the Taoiseach.
Mr Ahern, who told the Dáil he did not believe a management buyout of Aer Lingus was appropriate for the national airline, said the staff of Aer Lingus had worked hard and "Alitalia, Sabena and all of the other airlines are gone, going or are drastically cutting back on their operations".
Responding to the Socialist Party TD, Mr Joe Higgins (Dublin West), who pressed him on the issue of a conflict of interest in a buyout, the Taoiseach said: "I do not think that is a solution." He reiterated that the Government could not give State aid to the national airline, and added: "I do not believe it is compatible with the mandate of Aer Lingus to have a management buyout."
Later the chief executive of Aer Lingus, Mr Willie Walsh, told the Oireachtas Transport Committee that the buyout offer had been withdrawn on Monday.
In the Dáil, Mr Higgins said there was a "credibility chasm" between media condemnation of the €9,000 watches presented to departing Aer Rianta board members at public expense and "the deafening silence about a critical strategic public asset, our national airline, which is worth €500 million, being speculated with by those charged with its protection and the protection of the taxpayer".
Mr Higgins asked why the three senior Aer Lingus executives in the proposed buyout had not been sacked for their "stunning conflict of interest", in which they sought to privatise the airline and "make an obscene financial killing".
The Socialist TD said that if a private company was looking for 200 jobs cuts, "the air would be thick with gloom and the creation of task forces would be mooted", but a publicly-owned company that would make €90 million profit this year was proposing to "savage 1,300 jobs and the political establishment and most of the media have not raised even a murmur".
He claimed the executives, charged with "protecting a crucial asset" were "sitting in their offices and plotting how they can make it their private property".
When Mr Ahern said the redundancies, though regrettable, were voluntary, the Dublin West TD retorted that they were not voluntary and "decent Aer Lingus workers are being hounded out of their jobs".
But the Taoiseach said that the aviation industry faced severe difficulties, and pointed out that Alitalia this week announced a workforce reduction of 3,000 and it was "in considerable difficulty of going under altogether".
He said that the trade unions, management and staff had tried to retain the greatest number of jobs and, in addition, to expand and not reduce the business "in these difficult times".
Stressing that a buyout was not "compatible with the mandate of Aer Lingus", Mr Ahern said he wanted to see a strong Aer Lingus in the future. He insisted that the State would not be allowed to finance Aer Lingus again because of EU legislation, but the former Labour leader, Mr Ruairí Quinn, said that "if venture capitalists can invest, the State can too".
