FG backbenchers ‘unconvinced’ by IAG assurances on Shannon

Mike Dwane

Reporter:

Mike Dwane

Deputy Kieran O'Donnell: 'I still have reservations and remain to be convinced'
FINE Gael backbenchers in Limerick “remain unconvinced” by IAG boss Willie Walsh’s charm offensive but have not gone as far as Clare-based senator Tony Mulcahy, who has threatened to resign the party whip if the government agrees to the takeover of Aer Lingus.

FINE Gael backbenchers in Limerick “remain unconvinced” by IAG boss Willie Walsh’s charm offensive but have not gone as far as Clare-based senator Tony Mulcahy, who has threatened to resign the party whip if the government agrees to the takeover of Aer Lingus.

Both Deputy Kieran O’Donnell and Deputy Patrick O’Donovan were present for Mr Walsh’s appearance before the Oireachtas transport committee last week.

It was questioning from Deputy O’Donovan that elicited from Mr Walsh a fresh commitment that IAG would legally guarantee Shannon’s existing three daily flights to Heathrow for at least five years.

But this does not go far enough for either of the Limerick TDs, while Deputy O’Donnell was also unimpressed by Mr Walsh’s failure to give adequate assurances on transatlantic services. “Five years is a very short period in the business and tourism cycle. I also asked him about transatlantic and he could give no real, firm commitment in terms of Shannon,” said Deputy O’Donnell.

“I didn’t get the assurances I would have liked in respect of Shannon. I think the risks are very high for us. We have such a large foreign direct investment and indigenous business and tourism base here in the Mid-West. I still have reservations and I remain to be fully convinced,” he said.

Deputy O’Donovan is also not satisfied that the guarantees on Heathrow are of long enough duration.

“Willie Walsh has provided us with detail on his plans for Aer Lingus and how he believes it can fit into IAG. I was glad that when he answered me that he gave specific guarantees to Shannon and Cork, however I would like to see these guarantees for longer than what’s currently on the table,” he said.

But Deputy O’Donovan accepted a key point made by Mr Walsh to the committee, that the five-year guarantee is better than what Shannon currently has.

“It is clear that under the current ownership structure there is no protection for Shannon. We know from when the first 75% of the airline was sold, that Heathrow slots can be moved so if there are guarantees that can be given we need to examine them closely,” he said.

“Aer Lingus tomorrow morning could decide they were going to operate a New York-Heathrow or a Sydney-Heathrow route and there is absolutely nothing anybody can do about it, as we saw before in 2007 when they took them out of Shannon. So the government position in this is very weak and it is about making sure that however weak that position is, that it is maximised to best effect for the economy and the region,” Deputy O’Donovan said.

During the hearing, Mr Walsh repeatedly stressed his belief that Aer Lingus’ Shannon-Heathrow route was turning a profit. Around one in every four passengers passing through Shannon is on the Heathrow route, which carried 425,000 people last year and is expected to grow to 450,000 in 2015.

“I am a business person,” said Mr Walsh, “I believe the fundamental benefit one gets is from operating those in a profitable way. I believe they [Shannon and Cork]are profitable today and will continue to be profitable and continue to provide valuable feed [traffic].

“I see no reason why we would not operate services from Shannon and Cork to Heathrow, maintaining the four daily services from Cork and the three daily services from Shannon.”

Amid fears that IAG could reallocate Shannon’s Heathrow slots to busier airports in its global network, Mr Walsh stressed that over 70% of IAG’s Heathrow slots were short-haul and that the company was already in a position to reallocate slots to long haul destinations.

But his efforts to assuage the fears of politicians in the Mid-West have not convinced Senator Mulcahy, who is based in Shannon. He has warned Fine Gael that they cannot rely on his vote if they accept an offer Mr Walsh has promised he will not improve. “I cannot support any proposed sale of Aer Lingus to IAG as the risks are far too great for Shannon Airport, the regional economy, and the people of Clare and the west of Ireland. Should the Government sell its shares to IAG I will resign the party whip,” said Senator Mulcahy.

On his colleague’s threat to quit the party, Deputy O’Donovan said: “I can understand the concern and it is a concern for me myself as I’m from the region. But I think there is a bit to play out in this yet and I don’t think we are anywhere near a handshake.”

Deputy O’Donnell said he had been raising the matter in the Dail, within the parliamentary party and directly with Minister for Transport Paschal Donohoe and he hoped that the government decision would ultimately be informed by the concerns articulated by those representing the Mid-West and the other regions.