Aer Lingus ordered to publish cost-cutting plan

AER Lingus has been ordered to publish details of its cost-cutting plan next week.

A part of its defence against Ryanair’s 1.4 billion hostile offer, Aer Lingus announced it was preparing to cut costs as part of its 2007 “process improvement programme”, although it gave no details of what this involved.

The Irish Takeover Panel said it has been in communication with Aer Lingus with regard to its intended timetable for the publication of the details, as it must be published within a certain timeframe.

Aer Lingus has made not reference to the plan since, and the Takeover Panel ordered yesterday that it publish no later than next Friday.

Aer Lingus has said there will be no compulsory redundancies. It is not known at this stage if the company’s unions have agreed to another voluntary redundancy package.

If Ryanair’s bid for the company succeeded, it had promised to take the axe to hundreds of jobs. It highlighted the entire catering department, 100 sales and marketing staff in the US and a 600-strong clerical workforce.

The Irish Takeover Panel also ruled that the reference to the company’s earnings estimates for 2007 “together with the imputed multiple for Aer Lingus Group” in the defence document, constituted a profit forecast for the purposes of Rule 28 of the Irish Takeover Rules.

Aer Lingus said yesterday it was not their intention that this reference be regarded as a profit forecast and they are withdrawing it.

“The intention of the directors in including this reference was only to illustrate that the offer made by Ryanair values Aer Lingus at a significant discount to Ryanair and Aer Lingus’s European peer group.”