Transport Minister Paschal Donohue

How sound is the Aer Lingus IAG deal regarding jobs and slots?

Some lack of clarity via a plane crash encounter between Paschal Donohue and Gavin Jennings of RTÉ Radio One’s Morning Ireland earlier.

Please place all loose items in the container provided.

Gavin Jennings: “Once Aer Lingus is sold, how can we be certain that all of the promises on Heathrow slots will be kept?”

Paschal Donohue: “Well, they fall into two different areas in relation to connectivity and we have secured a set of guarantees that the State does not have at the moment, we’ll now move to the situation where we ill be the only people, the only stakeholder that will have a role in the disposal of slots and we will also oversee a seven year guarantee in relation to slot usage that does not exist at the moment. These guarantees will be enshrined into the Articles of Association of the company, therefore giving them legal robustness in relation to job growth, 635 new jobs by 2020, 150 new jobs next year, we have looked at the plans that are there for 4 new transatlantic services and to grow different airports, we’re confident that we can deliver those…”

Jennings: “Do those guarantees hold if IAG is sold or taken over?”

Donohue: “Well, we’re dealing with the future here of Aer Lingus and the guarantees that I have secured will be written into the articles of association of the company.”

Jennings: “If IAG is taken over and if more shares are being bought by other different companies, if it’s sold or taken over in the next 7 years do your guarantees hold?

Donohue: “Yes they do.

Jennings: “How?”

Donohue: “Because they’re written into the Articles of Association of Aer Lingus.”

Jennings: “So you have a veto, yes?”

Donohue: “To be very clear we have a guarantee in relation to the indefinite sale of the existing slots.”

Jennings: “But not the use, the use of them is only in place for 7 years.”

Donohue: “And that is a guarantee which we do not have at all at the moment, so it’s a 7 year guarantee in relation to the use of slots which is not in place now, it will begin when the transaction is complete and the use of slots is defined by the summer and winter schedules, so specifically, Gavin, we’re looking at the current frequency of use that will be maintained across the seven year period.”

Jennings: “This veto or guarantee, are you sure that EU laws allow you to exercise that?”

Donohue: “We have had contact already over a period time with the European Commission in relation to the legal mechanisms.”

Jennings: “Do they say it’s legit?”

Donohue: “We have indications that they will not oppose those guarantees.”

Jennings: “Have they said it’s legitimate?”

Donohue: “Well, Gavin, we would not be going ahead or asking for the support of Cabinet for this if I wasn’t sure that these guarantees were robust, and furthermore the fact that all of the airports that are involved in the operation of these slots, all of them, have now come out and welcomed this deal is an indication of the confidence that the airports themselves have in the operation of a guarantee which does not exist at the moment.”

Jennings: “The letter that was sent to you yesterday by Stephen Kavanagh, the CEO of Aer Lingus where he says we do not foresee a likelihood of either a compulsory redundancy or a indirect employment, we spoke to Patricia King from SIPTU earlier on, will it be written into this register of employment agreements that are also mentioned in the letter, will it be written into this that there will be no outsourcing no indirect employment and no compulsory redundancies?”

Donohue: “That is a matter for contact between the unions and the representatives of Aer Lingus but I would draw everyone’s attention to one line that is included in the letter that we received, where Mr Kavanagh said they would look at the scope of REAs and they would also look at extending the registered employment agreements to govern more employees.”

Jennings: “Will those Registered Employment Agreements rule out outsourcing and compulsory redundancies?”

Donohue: “Gavin, you’re asking me a question that Aer Lingus themselves will be able to answer, we have secured the…”

Jennings: “These are two questions that the union wanted assurances on, I’m just asking you, can you give me those assurances.”

Donohue: “And I’m directly answering your question, we have a commitment here to expanding the scope of REAs and expanding the number of employees that will be covered and we’re also dealing with a company that has managed to respond to huge challenges in recent years with the consent of employees…”

Jennings: “Minister, I’m sorry to harp on the point, but will extending the scope mean that it would include outruling, outsourcing and compulsory redundancies?”

Donohue: “And you’re asking me to make a prediction in relation to discussions that will happen.”

Jennings: “You don’t know, then.”

Donohue: “And what I’m doing, I’m emphasising that we have received a commitment from Stephen Kavanagh and from Aer Lingus that they do not foresee the use of compulsory redundancies or indirect employment..”

Jennings: “I’m not a worker at Aer Lingus and neither are you. ‘Do not foresee’ would not fill me with much assurance, would it?”

Donohue: “And indeed, and what I would point out in relation to those who are concerned by it are the commitments we have received in relation to the maintenance of jobs we also have a commitment in relation to the creation of new jobs we have commitments here in relation to the creation of 613 new jobs…”

Jennings: “A target, yes.”

Donohue: “We’re doing all this more broadly because the government believes this the best prospect for the long term growth of Aer Lingus.”

Jennings: “Do you expect there will be job losses in the short term?”

Donohue: “Well, Willie Walsh in the initial stage of this bid said that next year he believed there could be approximately 50 people affected…”

Listen back here

(Sam Boal/Photocall Ireland)