Aer Lingus chairman Mr Tom Mulcahy is expected to meet senior union officials over the weekend in an effort to achieve a consensus approach to restructuring the airline. Talks on proposed cutbacks, including 2,026 redundancies and changes in work practices expected to save £148 million (€188 million) on operating costs, have made little progress to date.
Mr Mulcahy is also expected to strengthen the company's industrial relations team. Mr Brian Patterson, who helped restructure Waterford Crystal, has been mentioned as a possible candidate to head negotiations. His involvement would also reassure potential investors that the airline has a credible strategy for dealing with its unions.
Meanwhile, the Government will explore the possibility of the European Commission agreeing extra compensation for Aer Lingus.
The Commission has only allowed member-states to compensate airlines for the first four days' loss of business following the September 11th attacks in the US.
The amounts involved would not be large - Aer Lingus received about £6 million in the four-day compensation package - but it might buy extra time to fund an investment package.
The French government has already sought an extension of compensation for losses to its airlines, to September 18th. The Irish Government is expected to argue that the $500 million (€560 million) given in aid by the US federal authorities to Continental and Delta was equivalent to compensating them for lost business up until the beginning of December.
As 60 per cent of Aer Lingus profits were generated on routes where it competes with these airlines, officials will seek permission from Brussels to extend compensation by a similar period. A spokesman for the Minister for Public Enterprise, Ms O'Rourke, said yesterday it was part of a continuing policy of lobbying for extra aid to the company.
The Competition Commissioner, Mr Mario Monti, appeared to soften the commission's line on direct aid yesterday. After a meeting of the Council of Industrial Ministers in Brussels on aid for small businesses, he accepted the EU response to the crisis had resulted in "more limited compensation" to the EU aviation industry than that provided in the US.
The Government will need to put detailed proposals on state aid to the commission, to have any hope of success. These are unlikely to emerge until negotiations at the airline itself make progress.
So far, unions have resisted entering detailed negotiations. This is partly because they are awaiting a detailed report from their financial advisers, Mr Greg Sparks and Mr Paul Sweeney. But they also say management has failed to put a price tag on redundancies or the increased productivity of staff who stay.
