Industrial action by Aer Lingus pilots now looks more likely than not, with their union, Ialpa, announcing an indefinite work to rule starting on June 26th. This follows an almost unanimous vote in favour of industrial action in pursuit of a 20 per cent-plus pay claim.
The stakes are high. The summer months are when Aer Lingus makes the bulk of its profits. Last year it made €196 million of its annual operating profit of €236 million between July and September
The impact of the work to rule on passengers will be significant. The airline flew an average of 36,000 people a day during the peak summer months last year and this year it is estimated the number could be closer to 40,000. Holiday plans will be upended. The costs of compensating, refunding or rerouting discommoded passengers would run into the millions.
Aer Lingus is part of the International Airlines Group (IAG) which includes British Airways and Iberia. Its parent’s €37 billion balance sheet means it can absorb some losses. The airline can also draw on group resources – in particular planes and crews – to replace some of its scheduled flights and can also hire in planes and crews from other airlines.
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All this puts Aer Lingus in a strong position to withstand a prolonged period of industrial action by its pilots. It will lose business, though arguably in an era of low-cost flights this will quickly return when the dispute is over.
IAG’s strength is, however, also something of a double-edged sword. The pilots know that their strike action is unlikely to imperil their jobs, in the short term at least. IAG has, however, signalled it will lead to less investment in the airline with new planes already being diverted to other airlines in the group.
This situation has led to the current standoff with the pilots refusing to budge from their demand for a pay rise that is nearly double what is on offer. As many are already well paid, they are unlikely to attract great public sympathy.
Aer Lingus offered an 8.5 per cent increase and the Labour Court has proposed 9.25 per cent. Ialpa says increases of more than 20 per cent are warranted because of the rise in the cost of living among other issues.
Bridging the gap will require concessions from both sides and IAG is wary of the knock on for the wider group of giving in to the Irish pilots. But both sides know that in the end they will have to give ground and reach an agreement. The only question now is whether the real talking happens before or after the industrial action commences.
Sometimes industrial disputes are only settled after an initial industrial action brings everyone to the table. But the scale of the disruption now threatened obliges both sides to talk first and avert huge inconvenience to the travelling public.