Selling off state assets (Aer Lingus)

tvbrat

I'm not sure if this post is in the right forum, so it may need to be moved.

With the sale of Aer Lingus in the media at the moment, I was wondering what people think about the selling, of state assets.

When a company is privatised or sold on the stock exchange, I think that the companies main objective is to their owner, stock holders as opposed to their customers.

With a state asset in theory its main focus should be to the people , ie customers and not the paymasters.

Just wondering if were selling off all the family silver and what will happen a few years down the road when we have no say in how our assets are managed.

mikemac

Fair enough if this was a drain on public resources but didn't this company make a big profit last year?

As an island nation, I believe we should retain Aer Lingus. I'm no fan of public sector unions but to sell off Aer Lingus is madness.

tvbrat

micmclo wrote:

Fair enough if this was a drain on public resources but didn't this company make a big profit last year?

As an island nation, I believe we should retain Aer Lingus. I'm no fan of public sector unions but to sell off Aer Lingus is madness.

Yea Aer Lingus is doing well now and I think you are right
we should not sell it off as we are an Island nation.

I'm also not a fan of public sector unions, I dont think
they should tell the rest of us what to do, as in Eircom,
when the workers rights were put above the rest of the
taxpayers rights, because they would get X amount
of shares.

netwhizkid

Absolutely not. Aer Lingus should not be privatised nor should any state owned business for that matter. It won't be long before the Heathrow slots are sold and we hear of a Air Crash involving an Aer Lingus jet if the are privatised. This is completely thatchery from the Government and is Progressive Democrat driven policy. The government knows they in trouble and I hope the electorate kicks them out. Enda Kenny and Fine Gael are hardly any better in terms of privatisation, but at least if they are in power Labour will keep them under control. Privatisation has a touch of death for anything it touches, prime examples in this country include Eircom, Irish Ferries, The Health system, Great Southern Hotels etc. Eircom has been destroyed and prime economists have called for it's re-nationalisation in last Sunday's Sunday Business post. Irish ferries having marched myself in cork with thousands more need I say more. Harney is trying every trick in her book to assassinate the Health System in favour of an American type system where the wealthy will have access to health while the poor can sell a kidney to afford the operation or else maybe die. This government especially the Progressive Democrats are the greatest threat to the Irish People since Oliver Cromwell set foot here 4 centuries ago. There is a hidden agenda in this government to sell off Aer Lingus, the ESB, Privatise CIE, the health system and the motorways of Ireland. I acknowledge this thread is not really after hours suited, Seeming it is considering Privatisation and Business I think the Business forum is much more suited.

Anyway if Aer Lingus is privatised it is the end of the Airline. The Government could invest our money (which I would be happy for them to do) but they are such neoliberal capitalists they won't budge. Aerlingus will soon be like Vomit Airlines aka Ryanair when this happens. A thundering disgrace if ever there was one.

BuffyBot

I'm not sure if this post is in the right forum..

Do people even bother looking anymore?

http://www.boards.ie/vbulletin/forumdisplay.php?f=99

tvbrat

BuffyBot wrote:

Do people even bother looking anymore?

http://www.boards.ie/vbulletin/forumdisplay.php?f=99

I did search but I mispelled Aer Lingus as Air Lingus
so I thought here would be the right place

tvbrat

netwhizkid wrote:

Absolutely not. Aer Lingus should not be privatised nor should any state owned business for that matter. It won't be long before the Heathrow slots are sold and we hear of a Air Crash involving an Aer Lingus jet if the are privatised. This is completely thatchery from the Government and is Progressive Democrat driven policy. The government knows they in trouble and I hope the electorate kicks them out. Enda Kenny and Fine Gael are hardly any better in terms of privatisation, but at least if they are in power Labour will keep them under control. Privatisation has a touch of death for anything it touches, prime examples in this country include Eircom, Irish Ferries, The Health system, Great Southern Hotels etc. Eircom has been destroyed and prime economists have called for it's re-nationalisation in last Sunday's Sunday Business post. Irish ferries having marched myself in cork with thousands more need I say more. Harney is trying every trick in her book to assassinate the Health System in favour of an American type system where the wealthy will have access to health while the poor can sell a kidney to afford the operation or else maybe die. This government especially the Progressive Democrats are the greatest threat to the Irish People since Oliver Cromwell set foot here 4 centuries ago. There is a hidden agenda in this government to sell off Aer Lingus, the ESB, Privatise CIE, the health system and the motorways of Ireland. I acknowledge this thread is not really after hours suited, Seeming it is considering Privatisation and Business I think the Business forum is much more suited.

Anyway if Aer Lingus is privatised it is the end of the Airline. The Government could invest our money (which I would be happy for them to do) but they are such neoliberal capitalists they won't budge. Aerlingus will soon be like Vomit Airlines aka Ryanair when this happens. A thundering disgrace if ever there was one.

Yea I agree with you said, The PD's do seem intent on selling off
all that we own as a nation

coolhandluke

tvbrat wrote:

Yea I agree with you said, The PD's do seem intent on selling off
all that we own as a nation

Yea the greedy shower,don't see them reducing tax rates with all this money there making/saving though.More putting it into incentives for all their builder/developer mates,to further screw the young people of ireland.With the FF'ers as bad as well.

daveirl

This post has been deleted.

ronbyrne2005

the state has no reason to be in the airline business. state owned companies are nearly always less efficient than a private sector competitor. im not pro privatisation for the sake of it,if theres a reason not to privatise then i would be against priavtisation but all the evidence i've seen and read indicates that aer lingus will do better in private sector. everyone saw how well ryanair has done in bringing down costs for customers and increasing efficiency in the industry,you will never see a state owned company achieving that.
the island nation argument is completley spurious.if there a demand for flights from people here then ryanair aer lingus and all other airlines will provide the services.
in 2000 aer lingus had twice as many staff but was doing less business than it is now, 9/11 occured and they were forced to change by the market and let workers go but have still done more business since.this shows that they were highly inefficent back in 2000 and that wouldnt have happened in a private company.if we want to compete on a global stage efficeny is the key.
aer lingus will become wven more efficient in private hands as there is massive incentive to improve company which isnt there in state owned companies.
to take the unions argument to its logical conclusion the state should run all large companies/organisation in the country which we all know means we would become an economic disaster like so many other countries doing this have.

BuffyBot

netwhizkid wrote:

It won't be long before the Heathrow slots are sold

They aren't Aer Lingus' to sell, as such.

and we hear of a Air Crash involving an Aer Lingus jet if the are privatised.

Yes. Because you see BA, and other private airlines, dropping out of the sky everyday.

The Health system

Must of missed them floating that one! Would have been a good investment. Hospitals are always in demand..

Great Southern Hotels etc

Do tell us why the Government needs to own a chain of hotels, even if it is indirectly. Whatever about other concerns of national interest, such as telecoms infrastructure etc, a hotel chain is something probably best left to private hands.

Irish ferries having marched myself in cork with thousands more need I say more.

While it's probably best not to encourage you, yes you do.

Harney is trying every trick in her book to assassinate the Health System in favour of an American type system where the wealthy will have access to health while the poor can sell a kidney to afford the operation or else maybe die.

Really? Hyperbole much?

Anyway if Aer Lingus is privatised it is the end of the Airline.

So you've said, but you've provided no evidence to back up your claim.

Aerlingus will soon be like Vomit Airlines aka Ryanair when this happens.

Perhaps you haven't noticed, but that's who they are already emulating.

Blackjack

BuffyBot wrote:

They aren't Aer Lingus' to sell, as such.

Yes. Because you see BA, and other private airlines, dropping out of the sky everyday.

Must of missed them floating that one! Would have been a good investment. Hospitals are always in demand..

Do tell us why the Government needs to own a chain of hotels, even if it is indirectly. Whatever about other concerns of national interest, such as telecoms infrastructure etc, a hotel chain is something probably best left to private hands.

While it's probably best not to encourage you, yes you do.

Really? Hyperbole much?

So you've said, but you've provided no evidence to back up your claim.

Perhaps you haven't noticed, but that's who they are already emulating.

You've saved me a whole load of typing, and have put it much more eloquently than I could ever have done. Thank you.

MrPudding

tvbrat wrote:

When a company is privatised or sold on the stock exchange, I think that the companies main objective is to their owner, stock holders as opposed to their customers.

With a state asset in theory its main focus should be to the people , ie customers and not the paymasters.

Semi states don't give a flying fcuk at a rolling donut about their custiomers. All they care about is extracting every last cent they can from them to pay their workers more than they possibly deserve for doing less work than a proper company could do with less people.

Great Southern Hotels? Don't make me laugh. They pull in thousands per room per year and can't make a profit. Why am I paying to keep a hotel afloat? I don't want to. I don't really care if the workers won't get paid as much or have to start paying for their own pensions or don't have jobs for life anymore. Sorry. Welcome to the real world. They made a killing out of the taxpayer in companies which are / were criminally inefficient.

I have no problem paying tax. I do have a problem when it is used to shore up companies which the government have no business being involved in simply so a bunch of people that had a cosy deal continue to have a cosy deal.

As for airplanes falling out of the sky? Cop yourself on.

MrP

RainyDay

Seems strange that one side of the Govt is rushing to sell off a profitable company with strategic importance while another side of Govt - the National Treasury Management Agency, which manages the state's pension fund - is scouring the earth seeking profitable companies to invest in! Does the right hand know what the left hand is doing?

ronbyrne2005

RainyDay wrote:

Seems strange that one side of the Govt is rushing to sell off a profitable company with strategic importance while another side of Govt - the National Treasury Management Agency, which manages the state's pension fund - is scouring the earth seeking profitable companies to invest in! Does the right hand know what the left hand is doing?

may be profitable but the industry in cyclical and could be losing money a afew years, how much more profitable would it be if it was privatised like ryanair? maybe it should be bought by the state pension fund and run as a completley private company but once the governement ultimately owns its the political interfereence from politicans and unions will prevent it maximising its potential .

RainyDay

ronbyrne2005 wrote:

may be profitable but the industry in cyclical and could be losing money a afew years, how much more profitable would it be if it was privatised like ryanair?

Isn't this a contradiction? Why are you only concerned about the cyclical industry for AL and not for Ryanair? Why would privatising it make it inherently more profitable?

ronbyrne2005

RainyDay wrote:

Isn't this a contradiction? Why are you only concerned about the cyclical industry for AL and not for Ryanair? Why would privatising it make it inherently more profitable?

private companies are more profitable than state run ones the vast vast majority of times.
aer lingus is now profitable becasue the industry is doing well at moment so even less efficient operators like aer lingus can be profitable in such circumstances.ryanair makes profit even in tough times.

RainyDay

ronbyrne2005 wrote:

private companies are more profitable than state run ones the vast vast majority of times.
aer lingus is now profitable becasue the industry is doing well at moment so even less efficient operators like aer lingus can be profitable in such circumstances.ryanair makes profit even in tough times.

And I guess you haven't shared this wisdom with the potential buyers of AL? Why would anyone buy the company if it is not going to continue to be profitable?

ronbyrne2005

RainyDay wrote:

And I guess you haven't shared this wisdom with the potential buyers of AL? Why would anyone buy the company if it is not going to continue to be profitable?

the potential buyers will beleive they can make it more efficient and therfore more profitable over the long term and not just ride the waves of global economic cycles like aer lingus did till 9/11

RainyDay

Don't see how they can make it more efficient, unless they are planning to do an Irish Ferries-trick and replace all the Irish staff with yellow-pack cheap labour. Is that really what we want to do with our national airline.

Blackjack

RainyDay wrote:

Don't see how they can make it more efficient, unless they are planning to do an Irish Ferries-trick and replace all the Irish staff with yellow-pack cheap labour. Is that really what we want to do with our national airline.

I don't think that's really the intention. Unfortunately when it's a semi-state, there's always the noose of votes to throw towards the government if they decide to do anything with it, in order to keep the company a viable entity.

There are 2 things you have to think about - it being the National Airline, and this being an Island Nation, the Airline industry is an important factor in the Economy of a country as regards the accessibility.

There is however, the fact the issue of Government investment into the company, and what is allowed - I do believe it is limited under EU laws - and also the threat from "open skies". If the company cannot expand without a large amount of investment, then why should the Government not seek other means of investment?. The best potential area of Growth for the Airline is Long Haul - this involves a whole pile of cash, and I don't see why the Taxpayer should be expected to foot the bill. The Company will either be comercially viable on it's own, or it will need to work itself into a way that it does. If it's owned by the Government, it will always be expected to be bailed out by the Government.

Let's face it - prior to 9/11, EI was making SFA, and was literally only kept afloat by continuous Government intervention, and stayed alive because of the seismic changes that HAD to take place post 9/11 for an Airline to survive.

Personally, and simply because of Loyalty more that anything else, I will always try to Fly EI ,before Ryanair, however when you're delayed due to strikes, work to rule, or whatever, the loyalty wanes somewhat. Whether a Publically owned company can weed this out (Ryanair seems to do OK) would remain to be seen. Incidentally, Ryanair are a damn sight more Punctual, and you know what to expect.

daveirl

This post has been deleted.

ronbyrne2005

even with the improvements in productivity in aer lingus since it was forced to change on 9/11 (unions would never have agreed to the changes otherwise) ryanair is still more than twice as profitable as aer lingus and is growing much faster,aer lingus could have grown much quicker if not held back by state ownership.

RainyDay

ronbyrne2005 wrote:

even with the improvements in productivity in aer lingus since it was forced to change on 9/11 (unions would never have agreed to the changes otherwise) ryanair is still more than twice as profitable as aer lingus and is growing much faster,aer lingus could have grown much quicker if not held back by state ownership.

Please stop speaking in generalities - Give us some specifics. What specifically can a new management do to make it more profitable.

ronbyrne2005

RainyDay wrote:

Please stop speaking in generalities - Give us some specifics. What specifically can a new management do to make it more profitable.

being free from shackles of state ownership allows a private enterprise to move quicker in the market without undue impediments from the resistant to change unions.
aer lingus could/will increase profitability by outsourcing non essential activities such as catering cleaning maintenance etc.
wages/benefits/pensions will be set in the market and not by unions pressuring government.
and similar things to the more profitable airlines will be done.in this booming economy its not hard to make money which makes the profits aer lingus is making look paltry.

Peanut

ronbyrne2005 wrote:

even with the improvements in productivity in aer lingus since it was forced to change on 9/11 (unions would never have agreed to the changes otherwise) ryanair is still more than twice as profitable as aer lingus and is growing much faster,aer lingus could have grown much quicker if not held back by state ownership.

Maybe that wasn't their plan (to grow quickly). Would you like all companies to follow the 'ryanair-style' industrial relations etc.? 60 pilots are bringing a high court case against them. http://www.rte.ie/news/2006/0406/ryanair.html

RainyDay

Blackjack wrote:

There is however, the fact the issue of Government investment into the company, and what is allowed - I do believe it is limited under EU laws - and also the threat from "open skies". If the company cannot expand without a large amount of investment, then why should the Government not seek other means of investment?. The best potential area of Growth for the Airline is Long Haul - this involves a whole pile of cash, and I don't see why the Taxpayer should be expected to foot the bill. The Company will either be comercially viable on it's own, or it will need to work itself into a way that it does. If it's owned by the Government, it will always be expected to be bailed out by the Government.

You may have missed my point about about the NTMA and the state pension fund. The NTMA is actively seeking investment opportunities, and is investing in a broad range of local and international companies. It is not a case of the taxpayer 'footing the bill' - it is a case of simply redirecting to Aer Lingus investment that is already being made. There is no blanket ban on Govt investment in airlines or other bodies. Once this investment is made on a commercial basis and doesn't distort the market, the EU has no problem.

ronbyrne2005 wrote:

aer lingus could/will increase profitability by outsourcing non essential activities such as catering cleaning maintenance etc.
wages/benefits/pensions will be set in the market and not by unions pressuring government.

They already considered this outsourcing under Walsh, and the new CEO has opted not to proceed with this. See http://www.timesonline.co.uk/article/0,,2095-2103466,00.html - Privatisation won't make outsourcing any easier or any harder, and it is not a good reason to proceed with privatisation. Benefits are already set by the free market. Union involvement is simply one dimension of that free market. Employees are free to organise, appoint representatives, lobby and negotiate. Or is it only the free market dimensions that favour employers which you want?

The big risks with privatisation are;

1) Dublin will become a hub of Heathrow/Paris/Frankfort, so there will be fewer direct long-haul flights from Dublin. Instead, we will be feeding long-haul flights from the parentcompany instead of flying direct from Dublin. Most transatlantic flights will now take 12 hours, including a 2 hour flight to Europe and 2-3 hours passing through a hub terminal.

2) The buyer will sell off some/all of the highly valuable AL slots at Heathrow, so we'll have fewer flights to Heathrow and more to Standsted & Luton.

Blackjack

RainyDay wrote:

You may have missed my point about about the NTMA and the state pension fund. The NTMA is actively seeking investment opportunities, and is investing in a broad range of local and international companies. It is not a case of the taxpayer 'footing the bill' - it is a case of simply redirecting to Aer Lingus investment that is already being made. There is no blanket ban on Govt investment in airlines or other bodies. Once this investment is made on a commercial basis and doesn't distort the market, the EU has no problem.

I think there is a big distinction between the State Pension Fund and the Government of the country. The Trustees of the pension fund will ensure that all investments are in the best interest of the fund, I doubt somehow that the would allow this for Political reason - if its a good investment, yes, however any other reason would surely be ruled out.

RainyDay

Blackjack wrote:

I think there is a big distinction between the State Pension Fund and the Government of the country. The Trustees of the pension fund will ensure that all investments are in the best interest of the fund, I doubt somehow that the would allow this for Political reason - if its a good investment, yes, however any other reason would surely be ruled out.

If it's not a good investment, the private buyers won't be lining up to hand over their cash. Strange that FF/PD won't consider the NTMA option....

Blackjack

RainyDay wrote:

If it's not a good investment, the private buyers won't be lining up to hand over their cash. Strange that FF/PD won't consider the NTMA option....

Perhaps the NTMA is planning to purhase a holding - who knows, apart from the NTMA?.

Schuhart

RainyDay wrote:

2) The buyer will sell off some/all of the highly valuable AL slots at Heathrow, so we'll have fewer flights to Heathrow and more to Standsted & Luton.

I'd say this is the real risk - and EU law would seem to prevent the Government from requiring any new owners to retain the Heathrow slots.