Aer Lingus revealed yesterday that it spent €16.2 million last year defending Michael O'Leary's audacious approach in October, which is the subject of a competition investigation by the European Commission.

While the costs of defending the approach held back 2006 profits, it gave the company an excuse to tackle its cost base.

The current restructuring plan, known as PCI-07, is projected to deliver annual savings of €20 million on staff costs alone.

No breakdown of these costs was available from the airline.

Arthur Cox in Dublin and Linklaters in the UK are known to have provided legal advice.

Goldman Sachs, Goodbody Stockbrokers and Merrion Capital were the financial advisers, while Drury Communications, Powerscourt and K Capital Source provided public relations and investor relations support. Others are involved on the fringes.

Further costs will be incurred in 2007, although nothing like the €16.2 million racked up to date, the airline said. Ciarán Hancock