The rehabilitation of Aer Arann chairman Padraig O Ceidigh appears complete. The airline he founded formally exited examinership last week after coming to an agreement to repay the Revenue Commissioners a tax bill of €1.1m, lifting the threat of a wind up of the little airline that could.

Aer Arann had entered examinership after booking huge losses during the recession years. Its creditors, including AIB, were owed almost €30m.

With fresh investment on the way and the promise of €2.5m in promotional spending from UK transport group Stobart, the airline looks set to chug along for a while longer.

As O Ceidigh tells it, Aer Arann was cruising until the recession and the Iceland volcano put the company into a spiral from which it couldn't recover under its own power.

And O Ceidigh gets to tell the story of Aer Arann because he is much in demand as a high-profile Irish entrepreneur. The founder of the airline is a frequent conference speaker, doling out advice to hopeful start-ups and venture capitalists. He sits on awards judging panels and is frequently invited to contribute his wisdom in the national media.

But O Ceidigh is a particular type of entrepreneur – the kind who seeks to capture income not through market transactions or wealth creation, but by exploiting political spending and subsidies. He is a political entrepreneur. The impolite term is rent-seeker.

A political entrepreneur tries to secure a slice of public expenditure – grants, subsidies, regulatory protections – to extract an economic rent. By contrast a market entrepreneur tries to overtake competition by offering a better product or by doing business more efficiently.

It is well known that Aer Arann survived on the millions each year it received in subsidies for flying routes too unpopular for the major commercial carriers. The airline served a need, but the need was not great enough to sustain a market. It was, however, great enough for politicians to serve. Seeing this opportunity and taking advantage of it is not the same as creating wealth where none existed before. The truth about Aer Arann's business model has been ruthlessly exposed by the tough market conditions of the recession. It is worth noting the comparative strength of Aer Lingus and Ryanair at the moment.

O Ceidigh hasn't done anything wrong. He's not a bad person or even a bad businessman. But on the basis of what he's done with Aer Arann we should be cautious about lauding him as a great example of indigenous entrepreneurship.

Securing the spoils of public spending, which is driven by political demand, is not the same as creating and delivering a product or service that people demand in the marketplace. One consumes wealth while the other creates it. Promoters of rent-seeking du jour in the green, smart and knowledge economies should take note.

Neil Callanan is away