Despite opposition from unions and some worker directors, the Aer Lingus board has approved a cost-cutting plan that will result in 1,300 job losses across virtually every section of the airline, writes Emmet Oliver.
The plan envisages reduced staff numbers not just in areas such as baggage handling, cargo and catering, but also in ticketing, reservations and among pilots. The airline said such reductions were needed to help the airline open new routes and drive down fares.
Unions are expected to meet management today to discuss the details of the plan which Aer Lingus has declined to release because it contains commercially sensitive material.
It is understood the plan suggests several functions at the airline can easily be done by private companies on an outsourcing basis. For example, the German company Servisair Globeground already provides baggage handling to several airlines at Dublin Airport.
The Minister for Transport, Mr Brennan, yesterday said he did not object to the plan, although he emphasised he did not want to see compulsory redundancies. This view was supported by unions SIPTU and IMPACT who promised to strongly resist any compulsory lay-offs.
A company statement said Aer Lingus was performing well and on course to achieve operating profits of €95 million for 2004. It said the plan was needed to "ensure the continuing viability and growth of the business in the highly competitive, low-fares environment".
Some worker directors registered their concern at the four- hour board meeting and some are believed to want clarifications on some elements of the plan. Some staff are concerned about a link between the job cuts and plans to sell the airline either to private institutions or a management-led group.
However the airline's chief executive, Mr Willie Walsh, has said Aer Lingus needs to cut its costs regardless of who its ultimate owner might be. Mr Walsh has long pointed out that the airline's costs remain out of line with low-cost operators like Ryanair and EasyJet.
A Government sub-committee is currently studying what to do with Aer Lingus in the long term. The Minister for Arts, Sport and Tourism, Mr O'Donoghue, has already indicated his concern about plans to sell the airline.
Staff are due to shortly acquire a 14.9 per cent shareholding in the airline via an Employee Share Ownership Trust. The airline's pilots are also interested in putting together a staff-led consortium if the airline is put on the market. This option or a management-led buyout would have to gain support from the Taoiseach, Mr Ahern, and the Minister for Transport, Mr Brennan.
The Labour Party meanwhile last night said it found the airline's plans "hard to understand".
Its transport spokeswoman Ms Róisín Shortall questioned why such job losses were necessary when the company's recent results were so "exceptional". However, Mr Brennan said when things were going right was often the best time for change.
Ms Shortall said staff had already made sacrifices. "It appears quite unjust given the exceptional sacrifices the staff have already made to ask them to accept further substantial job losses, especially when the company is expected to report profits of close to €100 million in the current year."
"This is not just another company: it is a national asset that is of strategic importance to this country as an island nation, heavily dependent on tourism and one of the few member-states without a land link to the European mainland. Is Aer Lingus to continue to be our national airline or is it simply to be turned into yet another low-cost carrier?" she asked.