Letter to the Minister for Transport

Dear Leo
I am writing to you about the proposed sell-off of the remainder of Aer Lingus. In particular I am writing to emphasise the critical importance of retaining effective State control over the landing slots currently in Aer Lingus' posession.

In my view, the part-privatisation of Aer Lingus with its slots was a mistake. The slots should have been removed from the company (decoupled) prior to the part-sale of the airline. We now face a difficulty in selling off the remainder of the company without endangering these vital assets of national importance.

Unlike the review group on State Assets, I do not believe we should trust blindly to the market to deliver high quality flight connections to Ireland. Indeed, our flight connections are currently the envy of other countries, primarily because, as an island state, we identified the crucial value of air travel at any early stage and developed it aggressively over the last century. If the market alone had dictated our flight connections we would have far fewer and far less high quality connections than at present. But as an industry of national importance we have actively collected high quality flight connections.

I read that it is the Department's intention to insert clauses into the sale of the State's shares to safeguard the landing slots. However, clauses such as this are ripe for failure: companies are liquidated, dismembered, they surrender assets -there are myriad ways in which such clauses can lose their effect.

Rather, I urge you, prior to any sale of Aer Lingus, to devise a "Sale-and-leaseback" agreement with Aer Lingus so that the state can regain ownership of the slots. Such an agreement will not be cheap, but it will be more than paid for by the subsequent sale and is the only way to guarantee our control over the foreign landing slots that successive governments have gathered. Frankly, they are vital to tourism, business and our globally integrated economy and their worth to the country far exceeds their market worth to the airline.

Otherwise, I guarantee you that the chinese or the oil sheikhs, or some such investor, with lots of money and poor flight connections will snap them up and deprive us of these vital assets. Countries that are less well endowed with flight connections, are better placed to appreciate their true worth. We have become complacent when we think we can simply sell our principle connections to the outside world.