The staff in Aer Lingus are seeking up to 30 per cent of the company as the price of agreeing the radical restructuring being sought by management. Talks with the Government on a Employee Share Ownership Plan (ESOP) got underway last week and the unions representing the 6,226 staff have made it clear that they will not accept the 14.9 per cent shareholding that the Government has offered. This includes 5 per cent that has already been granted to the staff.
"We are going to be looking for more than 14.9 per cent. If you capitalise what they [the Aer Lingus management] want out there, it would be worth much more than 14.9 per cent," said Mr Noel Dowling the National Industrial Secretary of SIPTU, the largest union in Aer Lingus. He would not comment on the size of the stake that the unions would be seeking, but informed sources said the recent takeover of Eircom, which has seen the staff acquire 30 per cent of the company, was now the benchmark.
The Department of Public Enterprise, which is responsible for Aer Lingus, was quick to try to kill off the prospect of the staff getting anything more than 14.9 per cent. "The Government's policy on ESOPs is well known. There is 5 per cent for restructuring and up to another 9.9 per cent for other savings and for purchasing," a spokesman said.
Aer Lingus staff already have a 5 per cent stake in the company, which was granted at the time of the last restructuring in 1991. The company's management are now looking for 2,026 redundancies and significant increases in productivity. Talks on the scheme are due to conclude by the end of this month and any proposals that emerge will be balloted on by December 7th. Airline sources said the Government would need to have reached agreement with the staff on the ESOP before the ballot.
The Government has already signalled that it would be prepared to give the unions an additional 9.9 per cent of the company if they agree to the restructuring. Another 35 per cent has been earmarked for sale to a private investor. The State wants to retain a majority stake in Aer Lingus and any increase in the staff shareholding over 14.9 per cent would have to come out of the stake being offered to outside investors. Not only would it reduce the amount of cash that could be raised, it would also erode the value of the stake. "There is no question of the stake going beyond 14.9 per cent. The matter does not arise," said a Government source yesterday. Eircom staff have acquired a 30 per cent stake in the former State phone company through its takeover by Valentia Telecommunications. The Employee Share Ownership Trust held 14.9 per cent of the company as a result of a deal done with the Government at the time of its flotation in 1999. They used the pivotal position that this put them in to extract a 30 per cent stake from Valentia as the price of supporting their bid over that of rival eIsland. Government sources said last night that something similar - a complete takeover - would have to happen at Aer Lingus before the staff could expect a 30 per cent stake.
The European Commission said yesterday that it would approve the creation of an internet travel agency firm set up by nine airlines, as it would not gain a dominant market position. The Opodo joint venture includes Aer Lingus, along with Air France, Alitalia, Austrian Airlines, British Airways, Lufthansa, Finnair, Iberia and KLM.
