There will be significant job losses at Aer Lingus if Ryanair acquires the company, chief executive Michael O'Leary acknowledged yesterday.
Aer Lingus is currently employing approximately 3,475 people, but Mr O'Leary said while he did not envisage this falling by 50 per cent, it would fall considerably in the short term.
He identified the catering section, sales and marketing in the US and clerical jobs in Dublin as the main areas likely to be scrutinised if Ryanair's takeover goes ahead.
"There will be significant job losses in Aer Lingus, because that's how we'll reduce costs," he told a press briefing in Dublin.
He also said that Ryanair would not be disappointed if it could not get control of Aer Lingus. "Even if the Ryanair bid doesn't succeed and the share price falls back, frankly Ryanair bought this stuff so, well, we'll probably still be in the money".
With Ryanair attempting to woo the 4,900 members of the Aer Lingus Employee Share Ownership Trust (Esot), Mr O'Leary was questioned about whether his plan to make job cuts could harm his attempts to win over this group. "We won't go down on bended knee for the Esot," he replied.
"The Esot trustees must act in the best interests of all their members and a significant proportion of the Esot's members are not current Aer Lingus employees. They may be former Aer Lingus employees. So the board of the trust of the Esot have a fiduciary duty to act in the best interest of all".
He added if the Ryanair offer lapsed the liquidity in the shares would be seriously reduced.
"There will be a lot of Aer Lingus stock out there in the market for sale".
Mr O'Leary said Aer Lingus had its own plans to lower costs and an earlier business plan by former Aer Lingus chief executive Willie Walsh envisaged a major rationalisation. Mr O'Leary said Aer Lingus remained over-staffed considering it was carrying just over eight million passengers a year.
Mr O'Leary said he did not know what the Aer Lingus catering department did every day, with most meals on board supplied by firms outside the airline. He said there were 100 people working in sales and marketing in the US for Aer Lingus and 600 clerical staff back in Dublin. He said these numbers seemed to him puzzling when Ryanair had fewer numbers but carried more passengers.
Despite this, he said, pilots, cabin crew and engineers were needed for the future.
"There are vast swathes of people in Aer Lingus not in danger of losing their jobs".
He said while job reductions would occur, the first thing Ryanair would tell Aer Lingus management to do, post takeover, was to drop their fuel surcharge.
Mr O'Leary acknowledged that while the proposed job cuts might stop some Esot members from voting against his bid, a large number of Esot members were no longer working at the airline and might look at things differently. Ultimately, Mr O'Leary said, the Esot would be crucial.
"If they say no, its unlikely we'll get to the point we want," he admitted.
Mr O'Leary strongly rejected suggestions his own investors were questioning the Aer Lingus bid. "Everyone is very happy with the strategy," he said.
