Sunday 4 December 2016

Secret Aer Lingus plan reveals 'aggressive' cuts

Philip Ryan and John Mulligan

Published 28/05/2015 | 02:30

IAG chief executive Willie Walsh outlines details of the take-over bid of Aer Lingus at the Westbury Hotel in Dublin.
IAG chief executive Willie Walsh outlines details of the take-over bid of Aer Lingus at the Westbury Hotel in Dublin.

Aer Lingus needs to make "aggressive" cuts of at least €60m if it hopes to compete internationally, according to a confidential presentation given to senior managers last month.

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A report commissioned by the airline recommends slashing cost with job cuts for pilots, cabin crew and catering staff.

The report also found Aer Lingus is at a disadvantage because the majority of its business is based in Dublin and Heathrow, where airport charges are higher.

The finding will raise concerns over the future of the crucial landing slots in Heathrow - which have been central to the decision to sell the State's stake in the airline to IAG.

The 'benchmarking study' was done by consultancy firm Nyras. It suggests a "leaner structure" at Aer Lingus, reducing handling costs by "restructuring labour agreements".

However, the Labour Party last night received a letter from Aer Lingus guaranteeing no compulsory redundancies or outsourcing of staff.

The letter from chief executive Stephen Kavanagh also commits to expanding registered employment agreements to new cohorts of staff.

Separately, IAG chief executive Willie Walsh said that while the Aer Lingus cost base was efficient, there was "always scope for improvement" at airlines.

The Irish Independent has learned that the average wage in Aer Lingus is €20,000 more than at BA.

And the annual profit generated per employee at the Irish carrier last year was €19,380, compared with €36,114 at BA.

Aer Lingus last night insisted the Nyras document was not a "blueprint for job cuts" and was not linked to the takeover.

Meanwhile, air fares will be monitored by the State's competition watchdog, the Competition and Consumer Protection Commission,

Irish Independent

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