The Minister for Public Enterprise, Ms O'Rourke, has told trade unions at Aer Lingus that she believes an employee share option plan (ESOP) at the State-owned carrier could be agreed by the end of the month.
But people close to the process have acknowledged that an internal dispute at its largest union, SIPTU, over cabin crew staff who want to defect to the pilots' union IMPACT, will complicate the negotiation.
The ESOP is crucial to the planned flotation of the airline and formal discussions between trade unions and the Departments of Public Enterprise and Finance are expected to begin next week.
But there is still no resolution to a dispute between cabin crew and SIPTU. Some cabin staff want to defect to IMPACT because of the failure of SIPTU to provide them with their own branch and secretary, although IMPACT wants the dispute resolved within SIPTU.
ICTU has proposed establishing a tribunal, chaired independently, to resolve the issue. But in a letter yesterday to IMPACT's general secretary Mr Peter McLoone, ICTU's industrial officer, Mr Fergus Whelan, said this was rejected by a delegation representing cabin crew. Seen by The Irish Times, the letter said: "We also explained to the delegation that persisting with their current course could result in cabin crew workers being without effective trade union representation for some considerable time."
SIPTU is to meet ICTU early next week to discuss the matter again, it is understood.
People familiar with the situation concede that the difficulty comes at an inopportune time for the airline's trade unions.
The issue will complicate negotiations on the proposed ESOP and the unions also expect to engage in separate discussions on the future of Aer Lingus's joint pension scheme with Aer Rianta. Workers and pensioners want the fund's provisions improved, claiming that it is out of line with pensions at other State organisations.
A further complicating factor is that the unions are seeking pay rises that exceed the provisions of the Partnership for Prosperity and Fairness.
Ms O'Rourke met the Central Representative Council (CRC), the co-ordinating body for the carrier's trade unions, last Wednesday. In a statement yesterday, the CRC said it had advised the Minister that while pay and pensions were not directly linked to the flotation, the outcome of discussions on the matters would "clearly determine" workers' attitude to the process.
Ms O'Rourke also met the Government's global co-ordinators for the flotation, AIB Capital Markets and Saloman Smith Barney. This was the first formal meeting with the advisers, her spokesman said yesterday. The issue of possible change to the airline's board of directors was raised. If sought, the Minister would consider and ultimately act on the advice of the co-ordinators, he said. This would enable her to replace political appointees with successors who have greater experience of the private sector as the airline faced privatisation.
The Minister also indicated that the two current vacancies on the airline's board would be filled by its chief financial officer, Mr John O'Donovan, and whoever was appointed to the vacant position of chief executive. These will replace the former Fianna Fail minister, Ms Maire Geoghegan-Quinn, and the economist, Mr Jim O'Leary, whose terms lapsed earlier this year.
There is still no indication as to who will be appointed chief executive although a person familiar with the process said it was entering its final phase. Aer Lingus's former chief executive, Mr Garry Cullen, resigned last February.
