Aer Lingus chairman Colm Barrington has confirmed that the airline will be seeking pay cuts by the end of the year to address “legacy” practices.
Mr Barrington refused to be drawn on job cuts but said Aer Lingus "has probably got more people than it needs” given the airline is cutting a quarter of its transatlantic flights.
The Irish Timesreported today that the airline is likely to seek about 500 redundancies among its 3,879-strong workforce as part of its latest restructuring plan in a bit to remove €130 million from its cost base.
Aer Lingus yesterday reported a record half-year operating loss of €93 million for the first six months of the year.
Mr Barrington also criticised the imposition of the €10 departure tax, calling it “a rather misguided tax”.
“Unfortunately, in the current market conditions Aer Lingus has had to bear a lot of that ourselves, we have not been able to pass that tax on because our passengers have been unprepared to pay it,” he told RTÉ radio this afternoon.
He described the shareholding structure of the airline as unusual; with the Government and employees holding just under 45 per cent, Ryanair just under 30 per cent with institutional shareholders in control of the remainer.
Mr Barrington said is was “outrageous that your biggest competitor can be a 30 per cent shareholder and can balk you at every turn”.
Aer Lingus is before the European courts trying to have Ryanair removed from its shareholder register.
“I think Ryanair has done a lot to damage Aer Lingus and damaged the share value of Aer Lingus and it makes it much more difficult for us to plot a future," Mr Barrington said.
Aer Lingus’s new chief executive Christoph Mueller takes up his role next Tuesday and will be involved in the development of the restructuring plan.
Mr Barrington said staff had to realise that as Aer Lingus was a private company, the State was no longer available to support it.
He said the airline had not “actually had significant pay cuts” and that if staff failed to “work at market conditions and market rates we won’t survive”.
