Aer Lingus has offered its staff lump sum payments of between €400 and €4,400 each for agreeing to new targets in the company's business plan. The company has forwarded its proposal to unions for consideration, although the early reaction from Siptu and Impact has been negative, writes Emmet Oliver

The offer, which is the first made by the airline in several years, could cost up to €7.7 million. This is based on staff of 3,500 and an average payment of €2,200.

However, the total cost could be lower depending on the age breakdown of staff. Because the offer does not apply to the airline's approximately 400 pilots, the overall bill would also be reduced. Pilots are involved in a separate pay review chaired by Gerry Durcan SC. The company is currently putting the finishing touches to a new business plan, which is likely to concentrate heavily on long-haul destinations. The company is seeking greater flexibilities from cabin crew and other staff.

According to a staff notice the payments increase are based on length of service. An employee with two years service, for example, would get €1,200, while an employee with five years would get €2,400. The highest payment would be open to those with 25 years service and up. However, due to the rationalistations over recent years the number of long-serving staff at the airline is relatively small.

While an official staff notice does not refer to the precise nature of the payments, it is understood they are a once-off and not superannuated.

An internal letter sent to Siptu members makes it clear the union regards the offer as inadequate. "It is already obvious to us even at this stage that the company's proposal cannot be viewed as remotely sufficient to address the level of reward and recognition that is needed," it states.

According to the last Aer Lingus annual report the airline employs 3,906 staff, but this week chief executive Dermot Mannion revealed that this figure is going to fall to about 3,500 for 2005.

Based on the 2004 annual report the average salary at Aer Lingus was about €53,000. While this is lower than other State-owned companies, it is higher than several other airlines like Ryanair. However this week Mr Mannion stressed that Aer Lingus did not regard itself as identical to carriers like Ryanair.