IAA to deliver €2m in savings after Covid-19 'revenue collapse'

IAA to deliver €2m in savings after Covid-19 'revenue collapse'
An Aer Lingus aircraft at Dublin Airport. Photo: Sasko Lazarov/RollingNews.ie

Staff at the Irish Aviation Authority (IAA) are to deliver €2 million in savings to the authority over the next four months as the agency deals with a “collapse” in its revenues due to Covid 19.

This follows the IAA and unions at the authority, Forsa and the Association of Higher Civil and Public Servants (AHCPS) reaching a deal over cost-cutting measures at the agency where over 700 people are employed.

The IAA was seeking to place 116 operational staff on special leave at 40% of normal salary for four months or an across the board salary cut of 10% to achieve the €2m in cost savings between July to the end of October.

However, after talks, those proposals will not go ahead and instead, the unions have agreed where staff earning over €38,500 will revert to a 4.5 working week and a voluntary scheme introducing special leave arrangements.

In a briefing note to staff, union representatives stated that a united approach had been adopted in the talks to no job losses and that the plan to give special leave to 116 staff placed the burden of the company’s cost cutting measures unfairly on an identified cohort of workers.

Arising from the deal, the union representatives acknowledged that some staff may be called upon to work normally at certain times during the period of this temporary agreement due to the demands and exigencies of business and infrastructural needs.

The note “acknowledges wholeheartedly that members in this position are making the ultimate act of solidarity with their fellow workers”.

The planned savings make up Phase 2 of Cost Containment Measures at the IAA.

The briefing note states that the shortened working week and special leave arrangements are temporary and that there will be triggers and dates to return full hours to staff.

The note states that cost containment measures are in place due to the ‘collapse’ in the company’s revenues.

The two sides entered talks against the background of air traffic decreasing by more than 80% since March due to Covid 19.

The bulk of the authority’s revenues of €197m last year was made up of €129m in ‘en route’ aviation related services.

Staff pay for April and May was protected as the IAA used cash reserves to maintain liquidity. At the end of last year, the IAA's cash pile stood at €20.1m.

The 2019 annual report for the IAA shows that staff there are generally well paid with 374 earning over €100,000 per annum.

The union briefing note to staff on the deal states that “the goodwill generated and the barriers broken down with the IAA Board and HR bodes well for the future, as common sense and leadership has prevailed during a very difficult process”.

The note states: “A problem-solving environment has now been created, that the staff panel is part of problem solutions, rather than being on the receiving end of unilateral decisions by the IAA Board and HR.” It adds: “This point is important, as the longer this crisis goes on, the measures approved by the IAA board, may become more severe.” In a statement, the IAA stated that it welcomed the agreement.

The IAA stated: “Phase 1 cost avoidance measures which include a curtailment of capital expenditure and a moratorium on recruitment remain in place.” The unions have decided against holding a ballot on the deal due to Government Covid-19 restrictions.

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