Aer Lingus restructuring to proceed as planned

The three-year plan to restructure Aer Lingus is to proceed as already outlined, despite the resignation of the airline's top…

The three-year plan to restructure Aer Lingus is to proceed as already outlined, despite the resignation of the airline's top three executives earlier this week.

The plan provides for more than 1,300 redundancies and radical overhauling of its operations.

It had been thought in some circles that there could be a softening of the restructuring plan, given the Taoiseach, Mr Ahern's, forceful support of the unions' and employees' dissatisfaction over elements of the restructuring in the Dáil this week.

The Government will move to fill the vacancies over the coming weeks, according to a spokesman for the Minister for Transport, Mr Cullen. He also confirmed that the three executives - chief executive Mr Willie Walsh, chief operations officer Mr Séamus Kearney and chief financial officer Mr Brian Dunne - are fully prepared to remain at the airline until May.

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The three resigned their posts on Tuesday, giving the Government, which is the main shareholder, six months notice. It is understood that key among their concerns was Government inaction on deciding how to raise new investment for the airline.

The acting Aer Lingus chairman, Mr John Sharman, met Mr Cullen on Thursday to discuss the week's events. A spokesman for the Minister said it was agreed that it was important "to move on and recruit a new management team".

He said Mr Cullen gave a clear commitment that the Government wanted the company to push ahead with the restructuring plan.

The spokesman also said that the three men had given strong indications that they were committed to remaining in the company until their departures next May. "The Government is happy to work with them until then," said the spokesman.

He said initiating the search to find replacements for them was now a matter for the board.

Unions at the airline remain opposed to the restructuring plan. "The fact that three of the authors of the plan have walked off the pitch raises major credibility issues about that plan," said Mr Michael Halpenny, SIPTU national industrial secretary.

He maintained that their impending departure would make implementing changes more difficult for the company.

He said there was "a lot of guff" being talked by "people who should know better" regarding the need for fresh equity.

Mr Halpenny said the equity was needed for the transatlantic fleet, should the company expand its routes. This, in turn, would depend on changes in the bilateral agreement with the US, which limits the amount of flights from Ireland to America. Mr Halpenny said Aer Lingus could always lease planes, rather than purchase them, and could meet current replacement fleet requirements from its own reserves.