Aer Lingus strike fear as 1,500 face jobs axe
AER Lingus is facing a winter of industrial strife after it dramatically announced plans to axe 1,500 jobs.
Employees are preparing to ballot for all-out strike action after the company yesterday unveiled a survival plan aimed at achieving €76m in annual savings.
Unions representing the workers reacted furiously last night to the "extreme and draconian" plan -- which has a strict deadline of December 1.
The major cost-cutting plan includes the outsourcing of more than a quarter of the workforce, the closure of cabin- crew bases in Shannon and Heathrow, and the hiring of US crews on transatlantic routes.
The Irish Independent has also learned that the airline will soon invite tenders from staff contractors based here and abroad.
These include Menzies, which Aer Lingus uses in London and Belfast; and Servisair, which runs ground-handling operations in 140 airports worldwide.
Although major cost cuts were expected, union officials were stunned by the scale of the cuts, which were outlined during a tense meeting with management yesterday.
SIPTU last night announced workers would vote on "all-out industrial action" -- including complete work stoppages -- after they described the cost-cutting plan as "Irish Ferries Mark II".
"Nobody in the company will emerge unscathed from this exercise," SIPTU national industrial secretary Gerry McCormack said.
Aer Lingus chief executive Dermot Mannion said a "very aggressive and radical cost-cutting plan" was crucial to ensure the "future viability" of the airline, which suffered €22m losses in the first half of the year.
The airline is seeking to make annual savings of €74m.
It hopes to achieve this by:
l Saving €50m in staff and related costs. These include outsourcing 1,500 jobs in ground operations at Dublin Airport, Cork Airport, and Shannon Airport; closing cabin-crew bases at Shannon and Heathrow; offering a limited staff redeployment in Dublin.
l Enforcing a pay freeze until at least the end of 2009.
l Moving all head office and support staff to merit and performance-based contracts; moving head office to a smaller open-plan facility.
l Shaving €14m off advertising, distribution costs, airport charges and professional fees.
l Taking €10m off the cost of the long- haul fleet by reducing planes from nine to eight.
Staff will have the option of transferring to the new service provider under the same terms and conditions they have at Aer Lingus.
Otherwise, they could accept a voluntary severance package and apply for a job with the new provider under its terms and conditions.
They could also simply walk away with the severance package, which is the same as the company offered in a 2004 package; nine weeks of salary per year worked, or take early retirement.
It they do not move, sources at the company said they would be made redundant on the terms of the severance scheme.
SIPTU general president Jack O'Connor had already warned that the cost cuts could "torpedo" the draft national pay deal, which still has to be ratified.
Last weekend, he warned that workers at the airline were being "fed to the wolves" at the same time as billions of taxpayers' money was being used to bail out bankers.
Labour said the decision to shed the jobs was "truly shocking" and claimed the cuts would "reduce Aer Lingus to a shell of its former self".
Fine Gael blamed the Government for creating a "climate of high costs and lost competitiveness" that led to the cuts.
Last night, the airline's corporate affairs director, Enda Corneille, said the early deadline to agree the plan with staff was essential to ensure the rescue measures were in place by March.
"The lead-in time is essential, as we need to get the savings by March next year when the cabin-crew plans and outsourcing needs to be in place," he said. "We don't have a lot of time to hang around for the summer schedule to begin. The board approved a consultation process until November 30, during which the unions can come up with an alternative means of achieving the staff savings, but an alternative must be agreed and balloted by that date.
"If not, the board has agreed we move ahead with our plan on December 1."
Speaking at Dublin Airport, Transport Minister Noel Dempsey urged management and unions to take a "sensible" approach to the plan in an economic climate that has seen dozens of airlines "going to the wall".
He reminded them that the mechanisms of State were there to help them forge agreement.
Aer Lingus last week revealed it expected losses of €65m next year if the price of oil stayed the same, but of more than €100m if it returned to a summer high of $130 a barrel.