Aer Lingus is to cut its operation by 25 per cent and shed at least 600 temporary jobs it was revealed today.
The airline’s management told the unions at a meeting that cost savings of at least 25 per cent will be immediately sought. The airline claimed its losses which were expected to be £23.63 million before last week's events, are now heading towards £70 million for the year.
The job losses will come the airlines operational sectors, including baggage handlers, clerical staff and cabin crew. All of the company’s 40 cadet pilots are also due to be let go.
As a result, seven aircraft will be taken out of the fleet and transatlantic services to Newark and Washington will be terminated from October. Leased aircraft which have break clauses will be the first ones to be taken out of service.
Although transatlantic passengers make up only one-seventh of the airline's seven million annual passengers, they make a proportionately higher contribution to profits. These routes lost five days business last week.
The frequency of services to London, Glasgow, Paris and Amsterdam will also be reduced, while the airline’s Dublin to Stockholm route will be terminated.
The company was unable to confirm whether there will be further job cuts among the company’s 6,300 permanent staff. A spokesperson added there were many options with regard to cost savings including reducing overtime.
When asked by one of the union representatives if money existed for a redundancy programme - the airline replied no funds were available.
The unions are due to resume talks with the airline tomorrow. The company is also expected to conclude a thorough review of its business - amended to take account of last week’s events - by September 27th. A company spokesman said: "The impact of the events last week necessitate the immediate and sustained change of approach on route structures and their cost implications in he context of the significantly reduced revenues which will be available in a greatly suppressed marketplace".
A spokesman for the IMPACT union which represents 2,500 Aer Lingus workers said "We are taking the attitude that the company is in crisis and needs to respond to that but we want to ensure that no action is taken which is unnecessary," he added.
An urgent meeting with the Minister for Public Enterprise Mrs O’Rouke to discuss possible supports for the industry was being sought, he added.
However, Mr O'Rourke, said yesterday the Government could not bail out the State-owned airline due to new EU regulations.
But the unions today expressed hope that she would follow the lead of US transportation secretary Mr Norman Mineta and British Transport Secretary Mr Stephen Byers who both met with top airline executives over a possible bail-out for the industry this afternoon.
Airline shares plummeted following the terrorist attacks in New York and Washington due to fears of falling passenger numbers and higher security costs.
Aer Lingus’s move mirrors that of other airlines with Continental saying it will "furlong" 12,000 of its 56,000 staff while Virgin Atlantic announced it is to shed 1,200 staff and ground five Boeing 747-200 jets.
US Airways announced it is to cut 11,000 jobs and slash its schedule by 23 per cent; Belgium's Sabena has warned it will collapse by the end of the year of it doesn’t restructure and Delta; Air Canada; American Airlines and American Air Trans all cut schedules by 20 per cent.
To complete a bleak day for Aer Lingus the company confirmed that acting chief executive Mr John O'Donovan will return to Bank of Ireland to take up the role of chief financial officer.
Mr O'Donovan has been acting chief executive at the airline since the departure of Mr Michael Foley in June.
