O'Leary to fight top-up of Aer Lingus pension fund
Published 04/02/2012 | 05:00
AER Lingus remained tight-lipped yesterday after Ryanair boss Michael O'Leary said his airline is initiating legal proceedings against its rival to prevent the injection of any fresh funds into a pension scheme deeply in deficit.
In an open letter to Aer Lingus shareholders, Mr O'Leary said Ryanair was "deeply worried" that management at the former state-owned carrier were engaging with unions and pension trustees regarding a massive deficit at a scheme.
The Irish Airlines Superannuation Scheme serves roughly 16,000 former and current members of Aer Lingus, the Dublin Airport Authority and the defunct Irish arm of SR Technics. The scheme may have a current deficit of €700m.
Aer Lingus and the DAA have been engaged in talks with unions at the Labour Relations Commission to try and thrash out some type of an arrangement to plug the deficit. Aer Lingus has engaged in those talks, despite asserting that it has no legal obligation to put any more money into the scheme to shore it up.
Ryanair has previously asked Aer Lingus executives to issue a statement assuring that no further funds would be put into the pension scheme without prior shareholder approval.
At an investor conference in London in September, Aer Lingus chief executive Christoph Mueller said the pension scheme "is not our issue" and shareholders would have to approve any decision to put fresh cash into it. Ryanair has previously sought to force Aer Lingus to call an EGM to ask the board to give its "unequivocal support" for his comments.
Mr O'Leary's letter said that, since such a statement from the board had not been forthcoming, Ryanair intended to initiate legal proceedings to prevent the company agreeing to additional contributions without shareholder approval.