From Socialist Voice, October 2004

Aer Lingus rip-off

The drive to privatise every state asset continues unabated. The next asset to be handed over to private owners is Aer Lingus. Recently the management put in a proposal to buy out the state and take ownership of the company.
     Aer Lingus has returned a significant profit to the state, expected to be in the region of €100 million this year. These profits, if retained by the state, could be used for reinvesting both in the company and in other projects that need investment, such as schools and hospitals. It is very likely that the airline will expand in the near future and bring much-needed revenue.
     This return to profitability has been brought about by Aer Lingus workers making huge sacrifices, forgoing pay increases, by changes in working conditions, and by more than three thousand redundancies since 2001. Working conditions have been reduced to match those of Ryanair and other low-cost airlines. The state has also invested millions of pounds of taxpayers’ money over the decades in building the national airline. It is true that it was used by a minority, and that the low-cost airlines have made travel available to many more people who would not have been able to afford it. But, like most things, there is a heavy price to pay.
     Not alone have the management put forward their plan to buy out the state but they have come up with new cost-cutting measures to make the airline “more efficient,” that is, even more profitable for themselves. They want the company to eliminate 1,325 jobs—nearly half the work force—and the rest to accept further changes in working conditions. The Government is waiting on a report it commissioned on the future of Aer Lingus from Goldman Sachs in London. Its main concerns are in relation to the trans-Atlantic use of Shannon Airport and retaining the company name.
     The management are using the offer of a 14.9 per cent employee share option as leverage on the workers. These options are one of the main planks by which employers and governments have sweetened the pill of privatisation and reduced working conditions. Telecom Éireann, now Eircom, is a case in point. They have adopted a two-pronged approach: firstly, above-average redundancy payments to secure the agreement of older workers, then shares for younger employees, creating a situation of divide and rule, with those being made redundant hoping to be brought back as part-time contract workers or self-employed. So the very management that wants to buy out the state also wants the Government to pay for the redundancy package to the workers, which they will be the clear beneficiaries of in the future. Workers should pick up the bill for making half the work force redundant, and then sell it to them at a knock-down price.
     The management of Aer Lingus have been floating the idea of withdrawing from the One-World Alliance, which is made up of a number of airlines with which they have shared ticketing arrangements and other areas of co-operation. They are arguing that they are no longer an airline that provides business-class seats but are a “no frills” airline, not in a position to reciprocate ticketing arrangements. British Airways is also a member of the OWA, and it is believed that if there is a management buy-out this will be only a short-term position and that British Airways is most likely to buy it up quickly, with Aer Lingus becoming its low-fares division. It has been reported that Willie Walsh, chief executive of Aer Lingus, has already had talks with British Airways.
     And so the drive to privatise all state assets continues. The Government, in the person of Séamus Brennan, has succeeded in breaking up Aer Rianta into three separate units, which will be sold off in due course. Next in line will be the Electricity Supply Board.
     Share options for workers are the sweetener that the Government, employers and media, as well as some leading elements in the labour movement, will put forward as the option for those employed in organisations to be privatised, in order to win workers’ support.
     But the fact is that the workers in any state or state-sponsored company have no right to sell or acquiesce in the sale of public companies. They are not theirs to sell in the first place. Irish workers have worked hard over many decades and governments have invested billions of our money in building up these companies when private investors had neither the capacity nor, in most cases, the will to invest in these necessary and strategically important cornerstones of the Irish economy.
     Irish capitalists, like their counterparts globally, do not think strategically: they think only of the immediate “bottom line.” They have always claimed that their interests are the same as the national interest, and vice versa. We have to continue to struggle and to make the case for public ownership of important sectors of industry as the only reliable means of building a sustainable and viable economy and country.

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