Business Irish

Sunday 22 October 2017

Progress in Aer Lingus pay talks

Christoph Mueller: recent share award
Christoph Mueller: recent share award
John Mulligan

John Mulligan

AER LINGUS pilots have been told that talks with management aimed at solving a pay and pensions row are progressing well, with hopes that a conclusion could be reached in the next few weeks.

But there is understood to be bitter resentment at the scale of incentives and bonuses being awarded to senior managers and executives at the airline, including chief executive Christoph Mueller, at a time when increments for pilots have been cut.

Pilots were given a progress report on Tuesday evening on the ongoing pay dispute. More than 400 pilots at the profitable airline are seeking an 11pc pay rise, more than three years after they took a 12pc pay cut under the carrier's 'Project Greenfield' plan that took more than €100m in annual costs out of the airline.

However, while pay freezes under the Greenfield plan effectively came to an end at the beginning of this year, tensions between pilots and management intensified after an annual increment wasn't paid to them. The reintroduction of that increment is also being sought.

While pilots approved industrial action in principle following a May ballot, no date was set for strike action, and the latest talks mean none is currently on the horizon.

Under industrial relations rules, pilots would have to give two weeks' notice ahead of any strike.

Negotiations

Pilots are understood to have been told on Tuesday evening that talks between the Irish Airline Pilots' Association (IALPA) and management have been going well. Those negotiations are thought to have been ongoing this week. It's likely that both sides will seek to reach a resolution within the next two to three weeks.

However, it is understood that pilots vented their anger at the incentives and productivity bonuses being paid to senior management and directors.

Mr Mueller and the airline's chief financial officer, Andrew Macfarlane, were recently conditionally awarded a total of €1.2m worth of shares under the company's long-term incentive scheme. The shares don't vest until at least the end of 2015.

Mr Mueller was awarded 1.5 million share options when he joined the airline in 2009. The first tranche of 500,000 became exercisable last year at a price of €1.10 per share, while another batch of 500,000 becomes exercisable this September at €1.30 per share. Aer Lingus shares are currently trading at €1.59, having risen 57pc in the past year.

Mr Mueller was granted the share options on joining due to what Aer Lingus described as the "unusual circumstances" under which he had been recruited.

Aer Lingus makes the conditional share awards under its long-term incentive plan to directors using a company in the Isle of Man called ALG Trustees. That firm was established in 2007 "to manage the group's long-term incentive plan".

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