AER ARANN owner Pádraig Ó Céidigh says he has held “preliminary” discussions with potential investors and would be prepared to relinquish majority control of the company if he considered it to be in the airline’s best interests.
This followed reports that Aer Arann was seeking to raise €10 million in fresh capital in a bid to survive the economic turmoil buffeting the aviation industry.
Earlier this year, Aer Arann made 57 staff redundant, while pay cuts averaging 7 per cent have been introduced across the airline.
“We would welcome investment in the company,” Mr Ó Céidigh said yesterday, adding that no specific sum had been discussed with the interested parties.
“We have been contacted in relation to a possible investment in the company and have talked to some people but it’s a long way from any deal being done.
“It’s very preliminary. People haven’t even got our business plan yet.”
Mr Ó Céidigh said talks had been held with two groups about an equity investment, both Irish. He would not name the groups but said one was a private-equity investor.
Mr Ó Céidigh said he was open-minded about relinquishing control of the airline, of which he took control in 1994 and which wholly owns. “I don’t mind, that’s never been an issue for me,” he said. “It’s not about control for me at all. Money has never been my driver.”
Aer Arann is an unlimited company, which means it does not have to file financial information and makes Mr Ó Céidigh liable for any debts if the business fails.
Asked if this weighed on him given the difficult economic backdrop and steep decline in air travel, Mr Ó Céidigh said: “Of course it does, absolutely. I went and took a chance and a risk . . . I won’t have any regrets if it doesn’t work. I believe I could turn my hand to something else.”
Mr Ó Céidigh said Aer Arann’s business was down about 20 per cent this year and the airline was considering further restructuring of its operations.
He said management would present a “strategic document” to him at a board meeting on Wednesday.
Economist Colm McCarthy, in his recent report to the Government on how savings might be achieved in the public service, recommended that public-service obligation (PSO) air routes should be abolished.
These routes account for about 16 per cent of Aer Arann’s estimated €90 million annual revenues. “Our strategy is to reduce our dependency on PSOs,” Mr Ó Céidigh said.
The airline has also faced significant competitive pressure from Ryanair on the Dublin to Cork route.
Mr Ó Céidigh has previously accused Ryanair of trying to run him off the route, a claim dismissed by Ryanair chief executive Michael O’Leary.
Mr Ó Céidigh said the airline would look at this route in the context of the latest restructuring.
“I know the lads [management] will be looking at it carefully,” he said. “We don’t back down to bullying . . . but we can’t be stupid about things.”
