Shares in Aer Lingus jump nearly 8pc
Published 27/05/2013 | 11:24
Shares in Aer Lingus jumped nearly 8pc this morning after the Labour Court recommended that it inject €110m into a troubled pension scheme – less than had been feared by investors.
The airline was told on Friday evening that it should put a one-off payment of €110m into the Irish Aviation Superannuation Scheme (IASS), which has an €800m-plus deficit.
The pension scheme serves thousands of former and current workers at the airline and the Dublin Airport Authority (DAA).
The Labour Court has also recommended another three-year pay freeze at the carrier in return for the contribution, giving the airline increased certainty over its wage bill.
Full-time staff who are members of the IASS are also set to receive a ‘stabilisation’ payment of €5,850, however.
The government, which owns just over 25pc of Aer Lingus, has seen the value of its stake steadily recover in recent months. The holding is worth €216m based on the current €1.63 share price.
“The recommendation is well within our €200m worst case scenario forecast,” said analyst Donal O’Neill at Goodbody Stockbrokers this morning in relation to the Labour Court recommendation.
He said resolution of the pension issue will “remove a major risk for the company and investors”.