07 October 2008

SIPTU reacts to Aer Lingus' Cost Cutting Plan

Members of SIPTU (Ireland largest trade union) in Aer Lingus decided yesterday evening to ballot for all-out industrial action.

SIPTU's National Industrial Secretary Gerry McCormack said: "This is Irish Ferries Mark II. It represents a fire sale of good quality jobs by a management that can see no further than the next quarter's profit and loss sheet."

Aer Lingus has set a deadline of November 1st for the implementation of a € 74 million cost-cutting programme involving up to 1500 job cuts through redundancies and outsourcing. Up to 280 jobs will be lost at Shannon Airport alone as part of this plan.

At a 2 1/2 hour meeting yesterday afternoon management told staff that € 50 million would have to be "eliminated from staff costs".

They also said € 14 million would have to come from a reduction in advertising and distribution costs, airport costs and professional fees, and € 10 million from reducing the airline's long haul fleet from nine to eight aircraft.

There will be a 'voluntary severance' or early retirement package on the same terms as in 2004 for cabin crew and ground staff in airports, catering and cargo divisions. Sick pay entitlements are to be reduced. Contracts based on performance-related pay will be introduced from January.

"Staff who do not take redundancy may transfer to a new service provider, but there will be no opportunity to redeploy within the airline."

Cabin crew bases at Shannon and Heathrow will be closed. Staff may be offered redeployment to Dublin or Cork, or alternatively will face redundancy.

Services from New York, Boston and San Francisco will be staffed with American cabin crew from the summer of next year.

Aer Lingus will also commence a programme to move its head office to smaller and more open-plan facilities.

Earlier it emerged that the airline was to impose a pay freeze until the end of 2009 under the cost cutting package. Staff are also to be given new contracts, which will introduce performance-related pay and abolish traditional increments.

The company has already reported losses of € 22 million for this year, and is forecasting potential losses of over € 100 million next year, depending on the cost of fuel.

Last Friday the Aer Lingus board finally authorised management to proceed with what it described as "a cost reduction programme to deliver substantial savings necessary to ensure the company's long-term viability as an independent airline".
The company also stressed that the cost savings must be delivered as a matter of urgency.

It is also believed that Aer Lingus is not prepared to engage in a lengthy negotiating process, and wants to commence implementation of cost cuts in 2009.

However, the trade unions are likely to highlight that staff have already made significant productivity concessions both in the 'Survival Plan' of 2001 and in the recent cost-cutting programme agreed in the summer.

SIPTU has indicated that it is "totally opposed" to any outsourcing, which would predominantly affect its members.


ferdia2010 said...

One wonders why on earth this company had to be given over €1 billion to buy planes or something like that. Haven't seen Aer Lingus get new planes or even order them for that matter. Do you think they should give
back the money ? We could use the few bob now i gather. It was very sensible to sell 75% of an airline and then give away the money !!

ferdia2010 said...

i meant it wasn't very sensible
sorry about that....


Yes, we should take the money back, and perhaps sell the rest of Aer Lingus off as well, if we can find someone to buy it.

And with regards to being sensible with money... well, what can one realistically expect from Martin Cullen and Noel Dempsey?

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