ATW Daily News

Aer Lingus to cut routes, 1,000-plus jobs after talks with unions fail

Thursday December 3, 2009

Aer Lingus will "resort to other measures" in its pursuit of its required cost savings, with capacity reductions and immediate and "compulsory" redundancies in the pipeline, CEO Christoph Mueller said after negotiations with several unions broke down late Tuesday.

"We have narrowed the gap with most union groups. . .and this has brought us very close to signature with them," Mueller said, adding that the Irish Airline Pilots Assn. and, "to a lesser extent," cabin crew represented by Impact are the exception. IALPA offered "only temporary savings over a short few years" and "asked for very high compensation in return," he said yesterday. Although a "majority" of EI staff "understands [the need] for significant and urgent change," the company said it now will "take whatever actions are necessary to stabilize the business" in the absence of an agreement.

EI announced a €97 million ($146 million) savings program in October and launched the "first phase" last month, when it announced a 9.7% year-over-year drop in third-quarter revenue and a 17.6% decline in average fare (ATWOnline, Nov. 10). Now, "in the absence of real cost savings being delivered from all employee groups," it said it will "have to resort to other measures."

The airline will "move to" eliminate additional loss-making routes, resulting in operation of fewer aircraft and requiring a manpower reduction "beyond those included in the [October] Transformation Plan." It did not specify which routes or aircraft will be cut. The number of redundancies could exceed 1,000, according to press reports. Another EI board meeting is scheduled for Friday.

Mueller said he "remain[s] confident that Aer Lingus can pursue an independent future," but Impact was not nearly as optimistic. The union called EI's decision "radical and severe" and said its proposal includes a "significant" number of job cuts it called "deeply unfair and devastating." It said EI has "returned to staff repeatedly looking for savings" over the past eight years and Impact members delivered €15 million in the spring. "As we predicted then, the company have come back looking for more with no regard to existing agreements."

Impact Assistant General Secretary Christina Carney told RTE Radio that employees wanted a stake in the company in exchange for concessions. "If [workers are] investing in the airline by contributing money in terms of pay cuts or productivity, I think there should be recognition for that investment," she said. IALPA had not commented as of late yesterday.

by Brian Straus

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