Aer Lingus unions agree payroll cuts: Airline needs to slash pounds 50m in costs

AER LINGUS, the Irish airline, has reached agreement with union leaders on proposals to cut payroll costs by Ir pounds 21m ( pounds 20m) as part of an overall rationalisation plan to return the company to health. The deal, struck after all- night talks, includes changes to working practices, writes Mary Fagan.

Debt-laden Aer Lingus needs to slice its costs by Ir pounds 50m to qualify for a Ir pounds 175m cash injection from the Irish government. The aid plan is being investigated by the European Union on competition grounds, but aviation industry sources expect it to be cleared.

A spokesman for Aer Lingus said talks are still continuing on the other cost-cutting measures. It is seeking to reduce overheads by Ir pounds 15m and to save a further Ir pounds 14m at Team Aer Lingus, the company's maintenance unit.

Bernie Cahill, chairman of Aer Lingus, said: 'I am confident that the implementation of the targets set by the company will ensure that Aer Lingus emerges with a strong core business which will enable us to compete effectively in all our markets.'

Aer Lingus made a loss of Ir pounds 188m after exceptional costs last year, against a loss of Ir pounds 11.7m the previous year. It blamed the failed flotation of GPA, the leasing group in which the airline holds a stake, as well as declining yields per passenger and recession in its main markets worldwide. The operating loss was Ir pounds 44.7m after tax, which Mr Cahill said raised 'serious questions' about the future of the group.

Aer Lingus hopes to hear before the end of the year whether the EU will allow the injection of state aid. The EU is concerned that any help should be used to return the company to health and not to enable it to offer cheaper fares, particularly on the busy London-Dublin route.

It emerged last month that its rival, Ryanair, had decided against opposing the aid plan for Aer Lingus. However, it is asking the EU to attach stringent conditions to any state aid allowed.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living