A secret management report on up to €80m in potential savings in Aer Lingus has led to warnings that the airline’s sale to aviation giant IAG could result in job losses.
Aer Lingus received a presentation from international consultants Nyras a month ago which compared costs in the airline with those in low-fare airlines Vueling and easyJet.
Airline sources stressed it was part of the company’s ongoing saving efforts, not related to employee costs but rather aimed at operations sourced from abroad. “This is about third-party costs, such as servicing engines, maintenance costs at destination airports and this was a benchmarking exercise,” said a company source.
The savings included seeking reductions in airport charges, landing charges and other costs incurred for buying, leasing and fixing aircraft, sources said.
Options in the report include removing the fixing of heavy maintenance from services in Bordeaux and moving the services to bases in Eastern Europe.
But Fianna Fáil raised the Nyras report in the Dáil, with party leader Micheál Martin claiming it showed cuts of 20% in ground handling, 40% for catering, and 25% on maintenance.
Independent TD Roisin Shortall claimed the secret report showed “aggressive but achievable” savings could reduce seat costs to just between €5 to €6 for each passenger.
Responding to leaks about the report, union Siptu said: “This revelation would seem to confirm the worst fears of Aer Lingus staff that a takeover by IAG will mean major job losses at the company.”
Aer Lingus denied that the report contained specific job cut recommendations.
“Any reports of specific job losses are entirely incorrect,” a spokesman said.
Taoiseach Enda Kenny that neither he nor Transport Minister Paschal Donohue had seen the report.
Mr Martin accused the Government of “coming in at the eleventh hour and trying to ram the sale of Aer Lingus through the House”.
He called for all related documentation and reports around the IAG bid for Aer Lingus to be brought before an Oireachtas committee for discussion.
“This report could potentially have a devastating affect on quality employment in Dublin, Cork, and Shannon Airports. I find it extraordinary that the Government has proceeded with this sale unaware, it appears, of this report. Perhaps the minister for transport, tourism, and sport is aware of the contents of the report. It is quite serious in that it refers to substantial cuts in jobs in areas such as ground-handling, catering and maintenance, the relocation of heavy maintenance work to eastern Europe [and] outsourcing.”
However, ministers reminded Fianna Fáil it was that party that originally sold 75% of shares in Aer Lingus.
A vote on selling the State’s remaining 25% in shares has been scheduled for the Dáil today and is expected to get the backing of both Fine Gael and Labour.
Labour TD John Lyons said the airline had only ever used voluntary redundancies in 15 years and not compulsory redundancy and he expected this would remain the case. Lablour’s Joe Costello said he and other TDs had met Aer Lingus CEO Stephen Kavanagh yesterday and that their concerns about jobs and slots at the airline had been satisfied.
Fianna Fáil last night said it would table a special private notice question today in a bid to stall the vote on selling Aer Lingus.
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