The departure of Mr Gary McGann from Aer Lingus raises, not for the first time, the issue of recruiting and retaining people of talent in the semi-State sector. It would not have been possible to recruit Mr McGann from the private sector in the first place without the creation of a special contract which overrode normal guidelines. These guidelines were set down in the Gleeson report on public sector pay. Consultants are now examining the appropriate levels for the pay of commercial semi-State chief executives, as part of the Government's response to the Buckley report - drawn up by a committee chaired by Mr Michael Buckley and designed to replace the Gleeson guidelines.
The old Gleeson guidelines were essentially unworkable, as the case of Mr McGann demonstrates. They assumed that salaries can be set in an almost arbitrary way. Clearly, some semi-State bodies are more important than others and their chief executives carry a correspondingly greater responsibility, which needs to be recognised in the remuneration offered.
Hopefully, the consultants now studying the issue for the Government will reflect this in their recommendations and also ensure that significant flexibility is left with the boards of the semi-State organisations themselves to set performance-related bonus structures. Indeed, there is a strong argument that the Government should have accepted the original Buckley recommendation, which was that the boards of the commercial semi-States should have been allowed to determine the pay and conditions of their chief executives, taking into account private sector norms.
Mr McGann obviously has a generous offer from his new employer, the Smurfit Group. Two of Smurfit's most senior executives serve on the Aer Lingus board and have been in a position to judge Mr McGann's qualities at first hand. They will also have observed that Mr McGann was never appointed to the Aer Lingus board - something that should be an automatic entitlement for a man in his position.
Mr McGann has presided over the change in Aer Lingus's fortunes made possible by chairman Bernie Cahill's survival plan. The airline now has a strong emphasis on service to its customers and concentrates on its core business without the distraction of running hotels and computer companies. And yet Aer Lingus's freedom of commercial manoeuvre is still seriously constrained by its link to the shareholder - the State. The timing of Mr McGann's decision was unfortunate coming just as TEAM Aer Lingus employees decide on the sale of the aircraft maintenance company. Mr McGann inherited the TEAM Aer Lingus problem and he has had a frustrating time trying to resolve it. A Danish company has bid for TEAM Aer Lingus but the future of the company was effectively put on hold pending the outcome of the by-election in Dublin North. This kind of political intrusion must have been deeply repugnant to a professional hands-on manager like Mr McGann. The TEAM workers, who are buttressed by their "letters of comfort" guaranteeing them employment with Aer Lingus have been offered £50 million to relinquish this right. The £50 million offer is the equivalent of one full year's profits at the troubled airline, which has worked assiduously to return to profitability. Mr McGann's successor will hope that the TEAM issue will shortly be resolved and that the airline can build on the progress already achieved.