The prospect of an initial public offering of Aer Lingus shares this summer or autumn appears to have moved a step closer after the Taoiseach Bertie Ahern said there would be no change to the Government's policy of privatising the State airline. However, Mr Ahern gave no indication on the likely timing of a sale.
As SIPTU members in the airline begin a ballot this week for industrial action in the event of changes being imposed in the airline's ownership without agreement, Mr Ahern went on the offensive to describe the privatisation policy as settled.
"We've gone on with the Aer Lingus decision; the decision is made now, it's not going to be reversed," he said in an interview with The Sunday Business Post.
Considerable doubt has surrounded the Taoiseach's willingness to go ahead with privatisation in advance of the next general election, which much take place by May 2007.
Despite that, senior Government sources said yesterday that Minister for Transport Martin Cullen will "within weeks" seek a Cabinet decision on the timing and method of a sale.
With most Ministers leaving Ireland for a series of St Patrick's meetings abroad, the earliest opportunity for such a decision will come next week. It was unclear last night whether a decision then was likely.
Those with knowledge of the process say that a stock market flotation is the most likely sale option, although there is still some debate around whether the airline should go the market in June or September.
While the airline moved in the last 10 days to appoint the management team that will take it through its sale, a potential solution to the multi-million-euro shortfall in the company's pension plan has emerged.
According to Government sources, the likely solution to the pension issue will embrace the setting aside of some €200 million of the flotation proceeds to establish a back-up fund that could be drawn upon if there was not enough money in the existing scheme to meet pension obligations to retired staff.
In this scenario, the pension fund trustees would have the power to decide whether and when money should be drawn from the new fund.
To protect the airline's valuable landing slots at Heathrow airport in London, the Government is likely to retain a minority stake in the airline of a little above 25 per cent while changing its articles of association to ensure that no slots can be sold without the consent of more than 75 per cent of shareholders.
