Fifty captains 'to be let go' in Aer Lingus deal
Published 12/01/2010 | 05:00
AER Lingus management and its 470 pilots are close to agreeing terms for a €30m reduction in operating costs by letting go 50 of its top captains and imposing pay cuts of 10pc on the others.
The Labour Relations Commission (LRC) said the results of arbitration involving the two sides represented a "significant statement of confidence" in the troubled airline's future.
The LRC has also recommended that Aer Lingus establish a fund of up to €30m to distribute bonuses to all the airline staff over a five-year period, once the company returns to profitability.
Aer Lingus said last week it had probably made a very small operating profit in the last half of 2009 as it slashed the amount of seats it offered for sale by axing routes and removing some aircraft from service.
LRC chief executive Kieran Mulvey said that taking account of the €97m in annual savings that Aer Lingus hopes to achieve as part of its rationalisation plan, the company could consider establishing a bonus fund of up to €30m for all staff.
It would be released over the life of the so-called Greenfield plan of five years, but "not before Aer Lingus has returned to profitability".
'Greenfield' is the name that Aer Lingus management have given the airline's efficiency being spearheaded by chief executive Christoph Mueller.
The LRC has estimated that the removal of 50 of the best paid Aer Lingus captain pilots from the payroll would result in annual savings of €15.2m, or an average of €304,000 per pilot.
A further 26 pilots have also expressed interest in leaving the airline. This could generate an additional €4.9m in annual savings.
The LRC has also recommended that pilots take a 10pc reduction in basic pay, a move originally resisted by them. This would save Aer Lingus about €6.2m a year.
The threshold at which pilots also receive a performance-related payment once they have flown a certain number of hours will be raised to save money. Other issues, including that related to the pilots' pension scheme, remain to be resolved.
Aer Lingus said it acknowledged the work done by Mr Mulvey and it would now consider his findings "fully and thoroughly".
The majority of the carrier's pilots are represented by the Irish Airline Pilots' Association. Its president, Evan Cullen, was not contactable yesterday.
The determination will have to be voted on and approved by pilots and approved by Aer Lingus before its findings can be implemented.