Aer Lingus will tell staff at its TEAM aircraft maintenance company today that it is to sell the company to Danish aerospace company, FLS. The airline group will also outline how it proposes to deal with the letters of guarantee held by 1,200 employees.
TEAM will tell workers that FLS Aerospace has emerged as the favoured bidder. It is understood that the deal, worth around £25 million, is quite complex and will not be question of a straight cash payment from FLS.
Part of the deal will also involve Aer Lingus leaving the maintenance contract for its own aircraft with TEAM. This contract is said to be worth £15 million-£20 million a year. TEAM also has several other contracts, including ones with Virgin and Lauda Air.
It is expected that a Memorandum of Understanding will be signed by Aer Lingus and FLS this morning. The whole deal will be subject to due diligence by FLS and could take up to three months to complete.
Today's meeting, at 3 p.m. is expected to be told how Aer Lingus expects to deal with the letters of guarantee. These are letters which were given to staff by Aer Lingus when it was setting up TEAM. The letters guarantee that employees can return to the airline if anything happens TEAM.
Aer Lingus has offered employees £25 million to buy out the letters. Around 1,200 of the 1,500 staff have these letters. It is expected that Aer Lingus will improve the offer over the coming days.
Other issues include pay parity with Aer Lingus and the treatment of pension entitlements. FLS is the largest independently owned aircraft maintenance company operating in Britain. It has aircraft and repair facilities at Stansted, Manchester and Gatwick. Its customers include Continental Airlines and British Airways, which is currently being tipped as a strategic alliance partner for Aer Lingus. FLS also carries out some work for Ryanair.
Other bidders interested in TEAM, included US groups BF Goodrich, the giant chemicals to aerospace firm and Allied Signals, a leading supplier of aircraft landing systems, repair and overhaul services. It is thought the letters of guarantee were a major stumbling block in the negotiations, especially with BF Goodrich.
Today's meeting takes place after two deferments. Both Aer Lingus and FLS declined to comment last night.
