On a related matter but a different company, the news of the management buy-out proposal from Aer Lingus management is of immense interest and not a little concern to the 4,100 remaining Aer Lingus employees, given that 3,000 have already been sacrificed following the downturn after 11 September 2001. Given that the airline stands to make profits of €90 million this year, will the Taoiseach indicate to the House when he or the Minister for Transport became aware of this proposal? There is a widely held view that the Government was aware of this going back some time and that it only came into the public domain at the weekend.

Can the Taoiseach confirm that a management buy-out proposal would usually come about when a company was in some trouble and needed radical or emergency action to be taken? Where does that sit in regard to Aer Lingus which we all thought was doing very well? Is the Taoiseach considering the ethical issue of management putting forward a buy-out proposal having been the same people that have engaged in so many of the cuts? Is there not a case to be answered ethically as to whether those people should then, effectively, benefit from having made those cuts themselves?

Many people also want to know about the pension arrangements. When it considers this matter, will the Government honour the Pensions Act, considering the €120 million shortfall from the superannuation scheme? In other words, is the taxpayer to take on that matter outside the management buy-out terms?

The Deputy's two minutes has concluded.

Despite the fact that British Airways is experiencing a fall in share price due to fuel costs, there is no reference to this with regard to Aer Lingus. It seems strange that this matter would not be taken into account when the Government is considering it. When did the Government know about the management buy-out proposal and is it as recent as the newspapers indicate?

The Deputy has raised a number of points. The Government discussed this matter today and will respond in due course to the request in the context of the ongoing consideration of the ownership issue, which has been under way for several months. It will not be considered separately. A Cabinet sub-committee which consists of myself, the Tánaiste, the Ministers for Finance, Transport, and Arts, Sport and Tourism is examining all the issues on this matter and will report back to Government. We have advised Aer Lingus senior management that in the interim there was to be no further activity as regards the requests for consent to develop a proposal until the Government has had time to consider the matter in detail. So it cannot proceed any further with its proposal.

We will also consider the request in the context of the point the Deputy made on the need for openness and transparency, and avoidance of conflict of interest in consultation with the stake holders. This is an important point as these people form the company's management and as the Deputy said, the governance issue is important in this matter and must be protected. Legal advice on that issue was sought. The new interim chairman, Mr. John Sharman, as an existing director acting in that position, has sought legal advice on the roles and corporate governance arrangements they need to put in place for the specific and unique circumstances that have arisen, where management has requested permission to develop a proposal but no such proposal currently exists or has been tabled, which is the position.

On 2 July, the chief executive formally wrote to the Minister and the company's secretary advising of the request and submitting a briefing document. The Department of Transport immediately requested that no further activity take place on the proposal until that matter had been considered from a corporate governance process and policy perspective. The appropriate legal and financial advice was then sought and the Government reiterated that today.

As I understand the Deputy's first question, Aer Lingus senior management has requested permission to develop investment proposals for the company and in the absence of a company chairman, the chief executive advised the Secretary General of this request at a meeting on 24 June. This was the first time the matter was raised and it was followed by a letter on 2 July.

The Taoiseach said this was raised for the first time on 24 June. However, my question was whether this matter was discussed at Cabinet prior to that? Is there truth in the reports I have heard that the Cabinet was thinking along these lines and that effectively the management has been acting on what was unofficial Cabinet policy? The Taoiseach did not answer my final question about fuel costs. I have raised this issue in the House before and will continue to do so because fuel reserves here are limited to about three days. I understand that most of our fuel reserves are in the UK. If British Airways is concerned about this matter, I would be surprised if a company like Aer Lingus is not concerned.

The Retired Aviation Staff Association is certainly very concerned about this proposal. I did not get an answer to my question about the Pensions Act and honouring the superannuation scheme, which is at a cost of approximately €120 million as far as I am aware. Will this be honoured by the taxpayer or what will happen to the retired staff who are concerned about their pensions?

No management buy-out proposal was put on the table in any form. As the Deputy knows, for some time the Government has been considering the future ownership of the airports. That process has been under way and that matter has been in the public domain for a long time. However, this was a new proposal that was not discussed and the Government was not aware of it. Today was the first time the Government discussed it. Most Ministers would have heard nothing of this until 2 July because the other meeting was with the Secretary General of the Department. It was only when the letter came in that the matter was made public.

Obviously if there is a change in the future, issues concerning pensions, governance etc. would have to be examined in detail. At this stage it is preliminary to say that. The ownership issue and the ongoing consideration of these issues are at an early enough stage.