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€81m loss for Aer Lingus as unions hit cost-cut plans

AER LINGUS reported a massive operating loss of €81m for last year in its unaudited trading update.

The group said that it would postpone the publication of its preliminary results ahead of an emergency management meeting to discuss cabin crew's rejection of the airlines cost-cutting proposal.

The airline had earlier said that if there was no agreement on its €97m cost-cutting plan, it would seek 1,100 compulsory redundancies and close a number of routes.

In the trading update, Aer Lingus said that total revenue declined 11pc to €1.2bn while total passenger numbers increased by 3.8pc.

The operating loss was slightly less than what had been expected by analysts.

Aer Lingus said that the board of directors would meet this morning to formally approve the steps that will now be taken to achieve the cost savings.

"Following the outcome of recent staff ballots it is necessary to revise the provision for restructuring costs and amend the preliminary results accordingly," Aer Lingus said in a statement.

The original plan targeted about 600 redundancies and 10pc pay cuts, which is backed by three of the five trade unions represented at Aer Lingus.

The airline has plans to shed up to a fifth of staff and deferred the purchase of seven Airbus planes last year.

Average fares for the year declined by 16.8pc on 2008 which represented a 12pc fall on average short-haul fares and a 15.9pc fall on long-haul.

The airline said its fuel costs last year declined by 17.3pc to €331.7m due to its lower capacity, and after it was released from more expensive fuel hedging agreements as the year progressed.

The group said it will issue its full annual results in 'due course'.

Aer Lingus said that, despite the outcome of the Impact ballot, it was determined to achieve the savings set out in its cost saving programme.

Over 80pc of members of the trade union Unite, which represents 200 workers at Dublin, Cork and Shannon opted to back the proposal.

Meanwhile, Aer Lingus announced the appointment of Juergen Krins as programme manager for the Greenfield Transformation Programme. His role will focus on the delivery of the airline's complex transformation programme.

Mr Krins has previously worked with four other airlines.