Aer Lingus is facing the most serious threat to its survival it has ever encountered according to chief executive Mr Larry Stanley.
In a letter to Aer Lingus staff Mr Stanley said: "The losses we face are truely staggering."
He said: "They exceed anything we ever anticipated in Aer Lingus and right now it is survival that is our challenge."
The company, he said, was in the process of putting together a survival plan which calls for savings in costs of £130 million annually.
Mr Stanley confirmed the company was targeting job cuts of 2,500 in its permanent staff.
He said: "Before the tragic events of September 11 in the US we were facing severe problems. The foot-and-mouth situation in the early part of the year had hurt us and the downturn in the world economies compounded things."
"The fall off in business traffic, in particular, had a severe impact on what is the most profitable part of our business," he said.
Mr Stanley said: "It is now painfully obvious that customer demand which is already on the decline will take a considerable time to get back to even the reduced level which prevailed before September 11th."
He said the company had taken initial steps to adjust its schedules to the fall in demand. "We have had to cut our schedules by 25 per cent and we have taken unneeded aircraft out of the fleet."
Cost saving measures already announced by the company include the non-payment of the PPF 5.5 per cent pay increase, release of temporary staff, the canceling of cadet and apprenticeship programmes and the termination of capital projects.
