Airline to shed 676 jobs by 2011
Aer Lingus has today (October 7) announced a €97m cost cutting plan to include job cuts, changes to its staff pension scheme and a reduced flight schedule.
The Irish airline said its two-stage "transformational restructuring plan" would allow it to compete "more effectively" with rivals operating with lower costs.
Aer Lingus plans to cut pay and shed jobs from both operational and support staff areas including 40% of its head office workforce.
The airline said at least 489 operational staff would be "surplus" and faced redundancy following cuts in its flight schedule.
Changes to other business segments could result in a further 187 job losses saving it a total of €74m by 2011, Aer Lingus said.
Aer Lingus said it hoped many of the redundancies would be voluntary but that compulsory job cuts could be necessary if it does not achieve its savings target.
A further €23m in savings will come from non-staff costs including airport charges, distribution, and maintenance and operating costs.
"Our plan to reduce our operating cost base and change work practices will secure Aer Lingus' future as a viable and strong airline that can prosper in one of the most competitive travel markets in the world," Aer Lingus' ceo Christoph Mueller said.
"We regret the impact that the proposed plan may have on our employees, however, we must transform the business."
Mr Mueller said Aer Lingus could not survive with a cost base "which is structurally uncompetitive when compared to that of its closest peers."
Aer Lingus also proposed to in future base its pension scheme contributions on a staff member's "past service".
The airline said it would consult the pension trustees on how to address the current deficits in both its pilot and general staff schemes.
Aer Lingus is also pinning its hopes on a new head office IT system which it said would improve revenue and cut costs from manual processes.
The airline estimated a 40% reduction in head quarter and support area staff numbers by 2011 as a result of "business improvements".
Ryanair has called on Aer Lingus to publish a list of people entitled to "inappropriate" free flights which it claimed includes former board members and directors.
"It is entirely wrong for Aer Lingus to be giving free flights entitlements to former Board Directors, including political appointees and possibly others at a time when the airline is losing money," Ryanair spokesperson Stephen McNamara said.
Ryanair, a 29% majority stakeholder in Aer Lingus, said such free flights were "unjustifiable" when the airline was considering widespread job and pay cuts.
Aer Lingus' cost cutting plan will now undergo a six week consultation with employees, trade unions and pension scheme trustees which is expected to end November 18.
www.aerlingus.com