ONE MORE THING:THERE WAS some brave talk yesterday from Aer Lingus chairman Colm Barrington about the airline's likely exposure to the large pension deficit from a scheme jointly operated with the Dublin Airport Authority and SR Technics.
The deficit has grown to “significantly more” than €500 million, according to a letter written by Brian Duncan, the chairman of its trust.
The Pensions Board wants the matter to be resolved by the end of the year.
Aer Lingus, the DAA and SRT are trying to distance themselves from having to plug this gaping hole. Yet it’s hard to see how it will be resolved without them meeting at least some of the bill.
Aer Lingus acknowledged as much in its recent half-year results when it flagged that this issue could result in industrial unrest.
Barrington was somewhat more strident yesterday in his letter to Ryanair chief executive Michael O’Leary, in which he addressed a number of criticisms from his rival.
“As regards the pension schemes, our position is and has been quite clear: Aer Lingus has met all of its obligations to those schemes,” Barrington said.
“We are working with the pension trustees and employee groups to attempt to find solutions to the pension issues, but have made it quite clear that Aer Lingus has given assurances about the defined contribution nature of the pension schemes.”
Fighting talk – but it seems highly unlikely Aer Lingus will be able to turn its back on the pension deficit.
Common sense suggests either the benefits are reduced or the schemes’ members and/or employers pay more into them.
This won’t sit well with the workers or even the pensioners.
Minister for Transport Leo Varadkar has signalled that the Government wants to sell its 25 per cent stake in Aer Lingus. Ryanair said it might follow suit.
Aer Lingus would welcome this, in the hope a British Airways, Air France or Lufthansa might buy into its business.
That won’t be possible until the pensions issue is sorted out. Aer Lingus will probably have to bite the bullet on the pensions issue if it is to secure a new owner and free itself of Ryanair. This could be a long and painful process.
