Sky-high profits didn’t prevent low tactics

Aer Lingus profits were soaring when the controversial plan to push staff out was drawn up, writes Paul O’Brien.

AER LINGUS was on its way to making record profits of over €100 million when the plan to push unwanted employees out the door was drawn up.

The semi-State company made operating profits of €83m in 2003, and €107m up 29% for last year.

Much of the credit for the turnaround was given to the savvy management trio Aer Lingus had in place at the time: chief executive Willie Walsh, chief financial officer Seamus Kearney and chief operations officer Brian Dunne.

The restructuring plan they implemented in the wake of 9/11, a plan which repositioned Aer Lingus as a low-cost carrier in the Ryanair mould, had been instrumental in the airline's turnaround.

But as the unions pointed out, it could not have been done without the immense sacrifices made by staff at the airline. Two thousand people, representing a third of the total workforce, lost their jobs in the restructuring. The remaining 4,000 staff, meanwhile, increased productivity rates.

The results were the handsome profits earned in 2003. By July 2004, the company was heading towards even greater profits. The reward for staff? A second round of job cuts. That same month, Willie Walsh announced that the airline was seeking 1,325 voluntary redundancies.

It was that same month, too, when the controversial plan to coerce employees into accepting the voluntary redundancy packages was drawn up.

According to a media report yesterday, the blunt, 12-point plan included giving a "tap on the shoulder" to certain senior employees to signify that they had no future with the company, and making "adverse changes in work/shift patterns" so that the new hours would make it difficult for people with families.

Aer Lingus yesterday refused to say who the author of the document was, but it did confirm that the document had been drawn up in July 2004 when the company was preparing to let 1,325 people go.

However, in a letter to staff, Aer Lingus chairman John Sharman insisted the media report was "based on the selective misinterpretation of a portion of one paper used as a discussion document in the process of preparing the business plan."

"It was not a list of proposed management actions and the company rejects completely any suggestion that it either had then, or has now, a policy of 'making life difficult' for its employees," he said.

Yet the unions see it differently. IMPACT, for instance, said Aer Lingus did attempt to implement many of the initiatives set out in the "discussion document."

"The record shows that Aer Lingus management did try to impose unnecessarily difficult shift patterns that would have hit staff with families hardest," said spokeswoman Christina Carney. The union resisted them, as it did several other moves by management, according to Ms Carney.

What both sides agree on is that relations between them have improved since the departures of Walsh Kearney and Dunne last January.

And while both sides will continue to disagree as to whether last July's plan was merely a "discussion document" or actually implemented in part, the reality is that while staff were talked of so dismissively, management were doing just fine.

Just as Aer Lingus's profits rose in 2004, so too did Willie Walsh's salary up 9% to €544,000. In total, the Aer Lingus board walked away with €1.5m between them.

They certainly weren't in danger of being tapped on the shoulder.