The flotation of Aer Lingus has run into a major obstacle just weeks before the sale, with 600 staff from the old Team Aer Lingus aircraft maintenance operation threatening legal action in pursuit of pension entitlements they claim the airline must grant them.
Legal documents received yesterday by management and unions shows that some 600 SR Technics staff (formerly known as Team Aer Lingus) are not to be included in a new supplementary pension fund to be set up as part of the flotation. The advice was from Dublin solicitors firm Eugene F Collins.
Siptu, which represents the staff in question, responded last night by saying that Aer Lingus had a liability of about €30 million to these staff which it was ignoring. The union said it wanted the airline's sale prospectus to be changed immediately to reflect this liability.
It had been thought that all issues had been resolved with the main unions at the company, Siptu and Impact, but the outstanding issue of the SR Technics staff threatens to embroil management and unions in fresh disagreements. SR Technics is an aircraft maintenance firm based at Dublin airport. It was once part of Aer Lingus itself, but was sold off during the 1990s.
Meanwhile, it also emerged yesterday that Sky Europe, an airline listed on the Vienna and Warsaw stock exchanges, will be seeking to attract investor interest in September, the same time as Aer Lingus. It was announced yesterday that it would be undertaking a rights issue, with investors to be offered the chance to subscribe for 10 million new shares. Last night Aer Lingus said this would not affect its own attempts to raise funds from institutional investors.
Dermot O'Loughlin of the Siptu civil aviation branch said SR Technics staff were concerned their pension entitlements were set to "fall between two stools". He said neither Aer Lingus nor SR Technics were prepared or able to address the issue. He said the union was prepared to resort to legal means to ensure the staff were not disadvantaged.
Michael Halpenny, the national industrial secretary of Siptu, said it was clear there were "unresolved pension issues" concerning SR Technics.
Christy McQuillian, who represents Aer Lingus staff on behalf of Siptu, said that as a "bare minimum" the prospectus would have to be changed to take account of liabilities attaching to SR Technics staff. He said if this protection was not given, the unions would not sign off on any pension arrangements, and legal options might have to be considered.
The supplementary fund is designed to guarantee past and present Aer Lingus staff inflation-linked pension rises in the years ahead. But most SR Technics staff are not included in this, even though many of them previously worked at Aer Lingus.
Many of these workers also have what are known as "letters of comfort", granted to them when they left Aer Lingus many years ago. These letters stipulate that former Team Aer Lingus workers must be treated on the same basis as comparable Aer Lingus staff who remained at the airline.
The Supreme Court decided last year that rights provided for in these letters could not be time-limited. The letters specifically mention retirement conditions.
Aer Lingus last night said the new supplementary fund was entirely discretionary. It said the main pension fund at the airport, to which many SR Technics staff belong, was continuing to operate as normal.
The airline said preparations for the sale were continuing as normal. The airline is expected to be worth between €840 million and €940 million when it comes to market.