But when all are weighed up, it is hard to avoid the conclusion that keeping the carrier in state hands is the least bad option.

Privatisation makes for more efficient firms, lower prices for consumers and, by taking ownership out of the hands of politicians, less patronage and corruption.

When the sale of state-owned assets began in earnest internationally in the 1980s, all these benefits were presented as reasons for lifting the dead hand of the state and freeing management to manage on strictly commercial lines.

After more than two decades, there is an abundance of evidence from across the world to draw solid conclusions about what happens when corporate ownership moves from public to private. On the big picture, there is little disagreement: the net gains have unquestionably been positive, but these have not been as great as originally trumpeted.

There are two reasons for the benefits being somewhat less than anticipated.

First, a small minority of sales have been failures, mostly in networked industries where natural monopolies can exist.

Second, the importance of ownership was over-stated. Corporate behaviour is determined more by external market conditions than internal structural arrangements. (It is for this reason, among others, that EU-level liberalisation has focused on prizing open markets, not reducing state ownership. ) Where does the seemingly interminable saga of what to do with Aer Lingus, which continued to drag on last week with unions fighting for further pre-privatisation concessions, fit in to the wider ownership picture? At first glance, the privatisation of the national carrier makes sense because aviation is highly competitive and not prone to monopolisation. But the government's proposal to sell-off only a part of the airline muddies the waters.

If the state retains a shareholding, potential investors know they can expect efforts to exert political influence over commercial decisions in the future. This will result in the discounting of the share price at time of sale, meaning less cash raised to reinvest in the company. Also likely to reduce the attractiveness of the offer to investors is the extent to which existing work practices are being locked in as ongoing talks with trade unions see many concessions being granted.

Leaving even less to plough back in to modernise the carrier's fleet will be the allocation of a chunk of the receipts from the sale to fill the hole in the airline's shotup pension fund. In short, the proposed sell-off will do little to achieve its stated aim of allowing for significantly greater investment.

But the flaws in the current plan don't end there. The government is determined to give the staff 15% of the firm though an Employee Share Ownership Plan (ESOP).

Whenever publicly-owned assets are handed over to private interests free of charge, the reasons need to be compelling.

They are far from compelling in this case.

Internationally, ESOPs are designed to bring the interests of management and staff into closer alignment, usually in the hope of getting employee buy-in for restructuring when firms are ailing. But in the case of Aer Lingus, painful change has already been implemented. Willie Walsh trimmed the fat and the carrier is now profitable.

Advocates of giving the staff such a big stake could argue that over the longer term it will make managers and managed closer in their views, making tough decisions easier. This is unlikely. International evidence shows that ESOPs have only limited effects on curbing adversarialism.

Closer to home, the case of Eircom merely adds to that body of evidence . . . few would argue that bosses and staff are closer to seeing eye to eye since the Eircom ESOP was launched.

The current proposal is flawed on several levels. So, of the alternatives . . . full privatisation or retaining the status quo . . .

which is better?

Though advocates of the status quo include those who are prejudiced against free enterprise and ideologically committed to statist solutions, one of the points made about the strategic risks of full privatisation is valid.

There is a danger that direct connections to the US could conceivably be reduced, or worse still, ended altogether. To see how it could happen, consider how the aviation industry is evolving. The effects of liberalisation in Europe are still working their way through the sector. Eventually, the structure of the industry will look as it does in the only other comparable market, the US. This can be expected to result in four to six large carriers becoming dominant by swallowing up the smaller fry and replacing existing routing structures with the hub-and-spoke model. Because this model cuts the number of point to point flights, routing most trips through a central hub, it could happen that travelling to the US from Ireland would mean a first leg to London, Amsterdam or Paris before crossing the Atlantic.

Given Ireland's dependence on US investment, such an outcome would be seriously damaging. And all the more so at a time when US firms are warning that Ireland is losing some of the advantages that made it so attractive in the past and when other locations are becoming increasingly attractive.

Full privatisation is the best and most straightforward option, but it carries risk.

Although the probability is small, the cost of losing direct transatlantic links would be great. Such risks are usually worth insuring against. The cost of keeping Aer Lingus in state hands is a premium worth paying.