Aer Lingus has told staff that it will halt all pay increases, including the payment of increments, until the dispute at the airline over pensions is resolved.
The payment of increments and other pay increases has been on hold at the company for the past three years under a cost-containment programme. However, payment of increments was scheduled to resume in April.
A process to deal with a deficit in the Irish Aviation Superannuation Scheme, which covers staff in Aer Lingus and the Dublin Airport Authority, has been under way for some time. At the end of last year the deficit stood at €789 million.
An interim Labour Court recommendation last month suggested unions and management at the airline meet to try tease out their differences. However, sources yesterday said the parties were “miles apart” on the level of capital investment required. Unions are seeking an investment of €130 million by Aer Lingus.
The company has said that, to facilitate investing in the pension scheme, a cost-stabilisation and moderation programme would be necessary. Unions have rejected any such requirement.
In a letter to unions yesterday Aer Lingus said it would seek to put in place a pay-stabilisation programme through the moderation of pay increases rather than through pay cuts.
“To this end the Aer Lingus proposal is that, for a four-year period, normal incremental progression would be replaced by an annual stabilisation payment amounting to approximately €16 million over the four-year period.”
The company suggested this could be structured either through a “gain-sharing-type arrangement” or moderate weighted annual pay increases which would be weighted towards those on relatively lower pay scales.
