Tuesday 24 April 2018

Aer Lingus hit by €80m pay claim from trade unions

Labour Court submission seeks a 5pc pay hike in each of the next three years

'The unions told the Labour Court that the company had
'The unions told the Labour Court that the company had "in the region of €1bn of free cash" and has "outperformed all its peers within the IAG Group".'

Fearghal O'Connor

Airport unions have hit Aer Lingus with a pay and profit-share claim of almost €80m, the Sunday Independent has learned.

Labour Court documents which have been seen by this newspaper reveal that airline staff are seeking a 5pc increase in pay each year for three years, which would cost the company €30m.

The unions are also demanding the introduction of an ongoing profit-share scheme, as well as the payment to staff, by way of a lump sum, of a share of the €233m profit reported by the company in 2016.

Based on the current level of profitability, a 5pc share would cost Aer Lingus €35m over the period.

The unions are also seeking €13m worth of double increment payments for two years to make up for increments that were not paid to staff between 2008 and 2016.

The pay claim follows the sizeable claim lodged by Siptu with Dublin Airport Authority, which was revealed by this newspaper last week.

"It is our contention that the exceptional financial performance of the company is in large measure due to the efforts of employees in Aer Lingus," said the submission from Siptu, Impact and Unite.

The unions told the Labour Court that the company had "in the region of €1bn of free cash" and has "outperformed all its peers within the IAG Group".

Aer Lingus had achieved a return on invested capital in 2016 of 23.1pc, well ahead of its annual target of 15pc, it said. A spokesman for the airline had no comment.

Meanwhile, this newspaper has also learned that despite its strong performance, the airline is deeply unhappy with DAA after a serious malfunction of baggage belts at Dublin Airport caused it delays last week.

A botched software update, that DAA said was caused by an external provider, forced Aer Lingus to resort to trolleys and so-called "bingo cards" to handle baggage in Dublin's Terminal 2.

In a memo, Aer Lingus chief operating office Mike Rutter described this as "a business process more suited to the 1970s".

The problems had caused hundreds of bags to go missing and thousands of passengers to be delayed last week, said Rutter.

"This week's service failures follow a number of other serious infrastructural issues at Dublin Airport and we continue to be very concerned about the DAA's lack of investment and failure to address these key issues," he wrote.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business