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Saturday 10 December 2016

Lost posts just the latest saga in a tough business

Published 16/02/2010 | 05:00

RYANAIR's offer to create up to 500 aerospace engineering jobs is the latest saga in a chequered history for this business in Dublin.

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For two decades, aircraft-maintenance operations at the airport have been in a near-constant state of crisis, culminating in last year's decision by global maintenance group SR Technics to close its Dublin facility with the loss of more than 1,100 jobs.

So could Ryanair have created 500 maintenance jobs?

Its fleet of more than 200 aircraft, with more on the way, is certainly big enough.

Also, as the carrier drastically slows its acquisition of new aircraft, there's an argument that the average age of its fleet could start to increase, increasing the need for more intense overhauls and more extensive facilities to do that.

But Dublin's troubled history of high costs and disputes over work practices seems to make it an unlikely location for the ruthless low-cost carrier. Especially as the history of the maintenance operation is intimately entangled with Michael O'Leary's bete noire, Aer Lingus.

In 1993, less than four years after Aer Lingus had decided to hive off its maintenance activities to a new subsidiary, Team Aer Lingus, the then national carrier was in the throes of a major restructuring involving a €222m injection of taxpayer's money into the airline over two years -- as long as rationalisation targets were met.

Strike

The airline lost more than €1.4bn in 1994. In the same year, a major strike at Team Aer Lingus, which then employed close to 2,000, created even more havoc for the airline.

The strike resulted in major customers, such as Virgin Atlantic and Federal Express, taking their business elsewhere. Workers were effectively forced to accept a rescue plan or face the dole.

In 1998, a majority of Team Aer Lingus workers, after bitter arguments, accepted a takeover of the maintenance business by a Danish firm FLS. However, FLS was unable to make it profitable and in 2004 the company sold the Irish operation to SR Technics.

While aircraft maintenance is a tough business, it is possible to turn a profit. The Irish operations of SR Technics made a €4.7m operating profit in the six months to the end of last June.

But the international group was never satisfied with productivity at the Dublin operations. Soon after, the bulk of its activities were sold to Dublin Aerospace.

Bargain

Even this came after a row, with SR Technics first deciding to offload Dublin to a sister firm, Abu Dhabi Aircraft Technologies. Mary Coughlan was hailed for apparently persuading the Abu Dhabi foreign minister to have that decision reversed.

Instead, Dublin Aerospace, a consortium headed by former Ryanair executive Conor McCarthy, was invited to submit a significantly higher bid for the Dublin facility. It succeeded and secured investment from Enterprise Ireland.

It had plans to create 226 jobs over five years. And it seems certain that even if Ryanair did sign a deal to operate from Dublin, more rows would follow. Undoubtedly, Michael O'Leary would push a hard bargain with any maintenance workers for a Dublin operation. But Mr O'Leary enjoys making mischief. Trying to land the Government in hot water is one of his favourite pastimes, so it is impossible to know precisely how serious his overtures regarding the maintenance facility might have been.

Had his earlier demands been met, regarding the acquisition of a hangar, it is possible other significant obstacles to a deal might then have arisen.

The cost base that he would expect from his maintenance operation could pose problems for airport, government and workers. If they delivered, perhaps he would, but did he ever really expect it?

Irish Independent

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