Irish confident state aid to Aer Lingus will be cleared

Date: 02/11/1995

THE Irish government is confident that the European Commission will clear the last 60-million-ecu helping of subsidies due to state-owned airline Aer Lingus by the end of the year.

After delivering a report on progress made in restructuring the company on 27 October, the government was optimistic that the final tranche of a 213-million-ecu rescue bail-out would be cleared.

“We are confident that the successful implementation of Aer Lingus Group's restructuring programme means the conditions are in place to enable the payment of the final tranche to be made,” said a spokesman for the transport ministry.

This would be certain to upset Ryanair, a privately owned 11-aircraft operator which competes with Aer Lingus on nine of its routes.

The company has already filed a complaint with the European Court of Justice over the payment of the last tranche of aid.

This was cleared by the Commission even though Aer Lingus had failed to meet its targets for 1994, on the grounds that the pick-up in the airline business throughout the world should allow the company to reach the targets soon.

The overall aid package was agreed in December 1993 to turn around a company which had lost 144 million ecu in 1993.

“They've done everything that could be expected of them,” said an industry official. “I think it's a formality.”

While Aer Lingus continues to have problems with its Team Aer Lingus maintenance subsidiary, it has performed a major asset sale this year in line with Commission demands when it off-loaded its Copthorne Hotel Group in August for a higher-than-expected 260 million ecu.