Aer Lingus Cost-Cutting Questioned

Although a spokesperson was not available for comment at the weekend, it is reported that Tanaiste and Minister for Enterprise, Trade and Employment Mary Coughlan has been expressing her concerns about proposed cost-saving measures at national airline, Aer Lingus.

The news comes as the incoming Chairman of Aer Lingus said that the company's board is "unanimous" behind a plan to cut costs at the airline - by €100m next year - although union sources claimed the carrier's chiefs were "far from decided, let alone unanimous".

However, Colm Barrington - who takes over the top role soon - dismissed reports that the board was split over the controversial plan which is believed to include the outsourcing of as many as 1,500 jobs.

Mr Barrington said there was absolute unanimity at an eight hour board meeting on Friday "in support of management's decision to cut costs in Aer Lingus by up to €100 m in 2009".

Mr Barrington, who has worked in the aviation industry for 41 years, takes over from Colin Sharman in October.

The proposals being discussed are understood to include the outsourcing of ground operations in Shannon, Cork and Dublin.

Last week, Aer Lingus Chief Executive Dermot Mannion wrote to SIPTU, the largest union in the company, and said that he "cannot rule out any eventuality" regarding the cost cuts.

It is also understood that the company is in talks with outside ground handling operators and is negotiating for more favourable landing charges at Shannon Airport.

And when asked about reports that some air hostesses may be hired from America, Mr Barrington yesterday told RTE radio: "That is one of the options Aer Lingus has to look at. The management is looking for all sorts of options.

"Some of the staff in Aer Lingus have unfortunately inherited the work practices of when Aer Lingus was a state owned company," he added.

Mr Barrington said that 1,800 staff at the company were used to such practices, which are now "inappropriate".

But union sources sounded a sceptical note about the board's unanimity last night and maintained that if agreement had been achieved by the board, then management at the airline would have engaged with unions on the plan's implementation.

It is understood that the company had signalled on Friday that it was prepared to make a major announcement, but pulled back from doing so after the meeting failed to make a decision. Unions claim that that incident signifies the disagreement within the board of the company about the cost cutting proposals.

The next board meeting is due to take place in a fortnight's time.

The move to increase savings comes as the company announced a major shake up of its operations in the wake of half yearly losses of over €22 m and follows mounting pressures in the aviation industry in the wake of 50% rises in fuel costs.

(BMcC)