Wednesday 16 October 2019

No details yet on €30m Aer Lingus payout


John Mulligan

AN internal review at Aer Lingus into a controversial leave-and-return scheme that cost the airline nearly €30m more than expected has still not been completed -- more than five months after it began.

However, it is expected that the airline may be in a position to reveal the review's progress at the end of this month, when it releases half-year results.

Aer Lingus launched the probe back in February after it was forced to come to a €29.5m settlement with the Revenue Commissioners over the 2008 scheme that saw more than 700 staff being made redundant.

They received severance payments and were then rehired by the airline within a matter of weeks on lesser terms and conditions. The airline had expected to receive a rebate to the tune of millions of euro from the State after making the redundancy payments.

But both the Revenue Commissioners and the then Department of Enterprise, Trade and Employment had questioned the validity of the claim.

Aer Lingus later decided to settle with the Revenue Commissioners rather than engage in legal action and risk an even greater liability.

The airline has refused to say which firms provided it with the original advice that the scheme would be acceptable to the taxman and the Government, or whether it would pursue legal action against them.

In February, Aer Lingus hired law firm McCann Fitzgerald and consultancy firm Deloitte to undertake a review of the scheme's implementation. McCann Fitzgerald was tasked with examining the role of senior executives at the airline in 2008, and the oversight given to the scheme by both the Aer Lingus board and sub-committees.

It was also charged with probing internal and external auditors. Deloitte was hired to trace all the documentation related to the scheme.

Aer Lingus has declined to give any time frame within which it expects the review to be completed.

The airline's chairman Colm Barrington has previously refused to say whether the findings would be revealed to shareholders.

"We'll do what's in the best interest for Aer Lingus," he said at the company's AGM in May.

"The scheme was a very good one. It cost €29.5m more than expected, but it has been instrumental in the financial turnaround at Aer Lingus in the last two years," he maintained.

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