Savings drive may lead to job losses, says Aer Lingus

AER LINGUS has refused to rule out more job losses as part of a new drive to cuts costs and drag the airline back into profit.

The struggling airline which lost almost 140m last year says it needs to slash another 130m this year.

Aer Lingus chief executive Willie Walsh said that these savings would

be achieved through whatever measures were necessary and refused to rule out further jobs losses.

“All aspects of reducing our cost base will be examined,” Mr Walsh said.

The airline will also offer thousands more low-cost seats to customers in a bid to attract business back from budget airlines.

Later this year the airline will open new low-cost routes costing between 79 and 99 from Dublin to Vienna, Geneva and Prague, while a low-cost Cork-Malaga route will also be established.

The airline says it will continue to offer millions of new cheap fares on its existing routes.

Other cost-saving measures to be considered by the company include cutting travel agents’ commission, flying to cheaper airports and cutting back on in-flight meals.

Mr Walsh said floatation of the company was not a management priority as the airline was still struggling to return to profitability.

“Our focus is on making Aer Lingus viable, attacking our cost base to put Aer Lingus in a position where we are in a secure and viable condition,” Mr Walsh said.

Losses of 140m for last year were due mainly to redundancy packages for 2,000 workers. The airline was also badly hit in its day-to-day operations, losing 50m.

This was due to a combination of factors including the foot-and-mouth crisis and the September 11 terror attacks which caused a 5% fall in passenger numbers.

Despite the scale of the losses, the figures were 27m ahead of what was predicted in the company’s survival plan.

Mr Walsh said that the company had targeted a return to profit in 2003.

He said that the company was also in talks to sell its shares in other companies such as Futura airlines.

Aer Lingus has also firmly rejected criticism from the Irish Hotels Federation that its fare structures were penalising passengers who fly to Shannon instead of to Dublin.

Chairman of the Irish Hotels Federation for the Shannon area, Declan O’Grady, claimed yesterday that Aer Lingus passengers travelling direct from the US to Shannon are forced to pay up to 50% more than those who chose to fly to Dublin.

“This is not an isolated case. There are plenty of examples on the Aer Lingus website that clearly demonstrates blatant discrimination against Shannon,” he said.

But the airline said there was no basis for these allegations and cited numerous examples of cheaper fares for passengers choosing to fly to Shannon.

An Aer Lingus spokesperson said from October an inbound fare from New York to Shannon will be $20 cheaper than an equivalent fare to Dublin.