Business Irish

Monday 18 December 2017


What's all the fuss about?

Well it's quite serious actually. There is a massive €700m-plus black hole at a pension scheme designed to serve thousands of former and current workers at Aer Lingus and the Dublin Airport Authority (DAA), as well as former employees of the now defunct Irish arm of maintenance firm SR Technics.

That sounds like an awful lot of money.

It is and it means that the deficit has to be reduced and eventually eliminated or else employees facing retirement probably won't get the kind of pension they expected.

One way the deficit could be reduced would be by injecting cash into the scheme -- the Irish Aviation Superannuation Scheme.

But Aer Lingus and the DAA have insisted they've no legal obligation to do so. Aer Lingus has even warned that trying to force it to do so would most likely result in lengthy legal action.

So why are Aer Lingus workers planning to strike?

They are worried about their future pension entitlements. They want the airline to stump up money to help reduce the deficit. Siptu has claimed that Aer Lingus has failed to put forward "any meaningful initiatives or finances" during talks at the Labour Relations Commission to resolve the deficit crisis. Aer Lingus says it's still committed to securing a "fair outcome".

What's all this got to do with the High Court proceedings involving Aer Lingus?

Well, Aer Lingus has managed to turn a profit and this year announced it would pay its first ever dividend to shareholders -- albeit a small one. But to pay any bigger dividends (the State, for example, expects a bit of a windfall dividend payment before it eventually sells its 25.1pc stake in the airline), Aer Lingus needs to reduce its so-called capital reserves through a formal High Court process so it can release €500m in capital to pay further dividends.

Okay, and what's the High Court saying?

During the summer, High Court Judge Roderick Murphy refused to approve the move unless Aer Lingus made a provision for possible legal claims against it arising from the pension dispute.

So where's this all heading?

Unions have been threatening strike action for weeks now. With a two-hour work stoppage now planned for November 19, things look ready to escalate. Ryanair has already offered to supply Aer Lingus with aircraft and crew to ensure its rival can continue to provide a full service in the event of industrial action.

And all this just in time for Christmas...

Yes. Such a move would hardly endear Aer Lingus staff to the public, especially now when the number of emigrants has soared and many will be hoping to make it home for Christmas. Of those coming home, many are almost certain to already have booked tickets. They'll be on tenterhooks to see if things are going to escalate.

Irish Independent

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