Our national airline has survived a number of crises - despite, rather than because of, the policies of successive governments, writes Garret FitzGerald.
For political reasons connected with a single marginal Dáil seat in Clare, successive governments of all complexions have over many decades persistently denied Aer Lingus the opportunity to fly directly from Dublin to a wide range of points in North America. But for this inhibition, Dublin could have become a significant northwest European hub.
Moreover, far too often over the years governments have weakened Aer Lingus by making inadequate political appointments to its board; membership of which has been the most sought-after of all public positions, because of the travel privileges members and their spouses enjoyed.
For some important periods in its life boards weakened in this way have failed in their primary duty of ensuring effective management of the airline's affairs. More than once these failures have endangered Aer Lingus's existence, bringing it close to the brink of insolvency.
Some trade unions represented on the Aer Lingus board have in turn contributed to the airline's problems through short-sighted and self-defeating attempts to protect employment, at the risk of endangering the airline's viability.
Some at least of their actions have seemed to reflect ideological attitudes rather than concern for the long-term interests of the company's staff; the survival of which in a highly cyclical and often only marginally viable industry requires exceptional efficiency.
Only in recurrent crises - to which their actions, or at times their inactions, have contributed - have the unions moved to collaborate in saving the company.
A few years ago, after a series of unfortunate management crises, Aer Lingus had the good fortune to boast an exceptionally gifted management team from within its own ranks.
One had to recognise the team's exceptional quality, even if one did not agree with all of their ideas. (At one stage they seemed to be contemplating abandoning inter-lining arrangements at Heathrow, where 1½ million passengers to and from Ireland have to make connections each year.
They do so partly because less than 10 per cent of the almost 100 cities with which Dublin is now connected are served by five or more flights a day, but also because the restrictive nature of Irish governments' policy has limited Aer Lingus to only half-a-dozen US cities).
The remarkable team that turned around the fortunes of Aer Lingus has now been lost to us, and its leader has been snapped up by a major airline, British Airways.
This happened because of a highly idiosyncratic reaction by Taoiseach Bertie Ahern to the management team's frustration with persistent and potentially damaging Government delays on financing the equipment needed for the company's development.
These seemingly endless delays led the management team to propose a buyout, which was immediately misrepresented by elements hostile to them as a "get-rich-quick" scheme for management's personal benefit. This seems to have destabilised the Taoiseach.
At the present stage the Government seems divided between a Taoiseach in thrall to narrow trade union attitudes and a Tánaiste with an ideological commitment to privatisation, and there is talk of a half-baked deal linking the fate of Aer Lingus to the Dublin Airport expansion issue.
We should forget all about ideology, for the issues of State ownership and monopoly can be irrelevant in a situation where a much more powerful factor is at work, namely the need to survive against the odds.
In the 1980s Aer Lingus had the shortest routes of any international airline; it had the most extreme peak-valley traffic ratio; and the surface transport fares with which it was competing were 50 per cent lower than those across the English Channel.
Even one of these three problems on its own would have tested the efficiency of any airline. Despite being State-owned and monopolistic, Aer Lingus made itself efficient enough to overcome all three, and was adjudged by an independent agency that reported on the performance of European airlines to be the most efficient such company on our continent.
Leaving ideological prejudice on one side, there are, however, three strong practical arguments in favour of the introduction of some form of private capital into Aer Lingus.
First, the fairly disastrous record of persistent government political interference with the airline has inhibited its growth and has repeatedly prevented its management from doing its job effectively. In the absence of any mechanism to control such political interference with an Irish company in State ownership, some kind of private-sector involvement would be desirable.
Second, the State has been a hopelessly inadequate shareholder. Ever since the airline's earliest period, successive governments have persistently failed to invest in its future development, confining themselves to bailing it out on a couple of occasions after it had been allowed close to bankruptcy.
Finally, so long as Aer Lingus remains in State ownership, it will be completely vulnerable to any future downturn in commercial aviation because, following several EU-approved State bail-outs, our Government no longer has freedom to help the company in any future crisis. If Aer Lingus got into financial difficulties again, it would simply have to be sold off to whatever interested party might be prepared to buy it cheap.
I'm afraid that, however reluctantly, one is forced to the conclusion that the case for an injection of private capital into Aer Lingus is very strong. But certainly not at a moment like the present when the loss of the airline's strong management team, which has yet to be replaced, has temporarily devalued it.
To sell any part of it at this point would be a grave dereliction of duty on the part of the Government. Instead, the Minister for Finance should not hesitate to use the increased leeway for borrowing provided by the recent revision of the Stability and Growth Pact in order to invest in Aer Lingus whatever sum may currently be needed to expand its fleet and thus ensure its future growth.
If, in a couple of years, when the value of Aer Lingus shares has been enhanced by a period of successful operation under new management, the Government still feels that, for the reasons given above, private capital should be introduced, it would then be able to more than recoup this investment.
It could sell a smaller share of the company than it would need to dispose of if it were irresponsibly to dispose of part of it now, when its value has been temporarily reduced by Government mismanagement.
The logic of such an injection of State capital at this stage (which was recommended a week ago by Paul Sweeney of Ictu, albeit presumably as a way of avoiding rather than postponing the introduction of private capital) should commend itself to Brian Cowen as a prudent Minister for Finance, as well as to a Taoiseach concerned about trade union reactions to a pre-election privatisation - and even, perhaps, to the Tánaiste, if she takes a longer view of the privatisation issue.