Job losses at Aer Lingus could exceed the 2,500 permanent posts and 700 temporary positions already flagged by the company. Well-informed industry sources believe the company is underestimating cutbacks needed to maintain the national airline's commercial viability.
This makes it increasingly likely that, if the Government obtains EU sanction for State aid, it will require full trade union co-operation with job cuts in return for reason-able redundancy payments.
At present the company can afford only the statutory minimum, which would leave employees with around a fifth of what was offered under the Cahill plan of the mid-1990s.
Last night teams of senior executives and technical staff were finalising details of the report that Aer Lingus chairman Mr Tom Mul-cahy is due to give the Minister for Public Enterprise this morning, before she flies to Luxembourg for the EU council of transport ministers tomorrow.
Mr Mulcahy was to brief Ms O'Rourke by Friday. The delays are due to the need to match the cuts required in spending with minimum staffing requirements.
Staff cuts account for £90 million of the £130 million a year cutback in operational costs. A workload reduced by 25 per cent will have to be done by a workforce reduced by at least 40 per cent. Late last night the company was still examining how far staff could be cut in a detailed examination of operations.
While speculation has concentrated on outsourcing areas such as catering and ground handling, it is understood all levels, from senior management down, are under the microscope. As one company source put it, "no area is sancrosanct from this exercise".
IMPACT is still questioning the validity of the company's claim that it is losing £2 million a day, because this figure fails to take account of the seasonal slump in business, but none of the Aer Lingus unions is now debating the need for drastic cutbacks to maintain commercial viability.
It is understood initial feedback from their own advisers suggests Aer Lingus is "not gilding the lily", to quote one senior trade unionist.
This will not make it any easier for unions and management to reach agreement. Competitors such as Ryanair have already said they will oppose any discriminatory State aid to Aer Lingus.
However, the Taoiseach, Mr Ahern, indicated at the weekend that Aer Lingus would be saved, with a slimmed down workforce of no more than 4,000. Government sources indicated last night that trade union co-operation with cost cuts would be a major precondition for financial assistance.
The obvious area for a quid pro quo would be support for a generous redundancy package.
Under the Cahill plan the formula used was six weeks' pay per year of service for the first 10 years and four weeks' pay for each year after that. The average amount paid was 2.5 years' salary. Given that the current average salary is £38,000, lump sums would be worth well over £90,000 per person. Statutory minimum payments, which is all the company can afford, would be worth less than £10,000 for many workers with long service.
A Cahill plan model would mean a package of around £200 million, far more than the £130 million so far flagged as the maximum figure the Government might provide.
Whether it is allowed to do so by tomorrow's council of ministers meeting is doubtful. A more likely scenario is some temporary measures will be agreed and the issue will be raised at Friday's summit, when the Taoiseach can make a case to leaders of other EU member-states. Ironically, the blacker the picture he paints for Aer Lingus, the better his case for having EU competition rules changed.
Ryanair set for battle on State aid; US urged to block cut-price airline tickets: page 18