Aer Lingus accepts pensions advice

Aer Lingus management has said it "reluctantly accepts" a recommendation from an expert panel that it should pay almost €200m towards the pensions of its current and former staff — though its shareholders must still give the green light.

The panel was appointed by the Government, Ibec, and the Irish Congress of Trade Unions to review the Irish Aviation Super-annuation Scheme, which is more than €750m in deficit and which has members in Aer Lingus and Dublin Airport Authority.

Earlier this month, the panel recommended that Aer Lingus pay €146.7m towards the pensions of its current staff — €36.7m more than recommended by the Labour Court in 2013.

It has now emerged it has been asked to pay a further €44m towards the pensions of deferred workers, those who have left the company but are not yet retired. That is €14m more than had been proposed by the Labour Court.

In a release to the markets, Aer Lingus CEO Christoph Müller said: “The solution recommended by the expert panel involves a significant increase in payments from the company. Aer Lingus reluctantly accept the recommendations... as the only solution that is capable of acceptance by all the parties.

“A significantly improved industrial relations environment is also a key requirement and a functioning internal dispute resolution mechanism must be established for this purpose.”

The airline said that any implementation of the panel’s recommendation was dependent on a series of further “complex” steps, including agreement with unions and the trustee of the IASS pension scheme; the DAA board and shareholder approval; its own board and shareholder approval; and Pensions Authority approval.

It said it was committed to seeking a “full and final solution” for shareholders and employees, but added that there was no certainty that agreement can be reached between the various parties”.

Unions are set to hold information meetings for their members before balloting them on the proposals.

Impact trade union, which represents cabin crew, told members in a bulletin that the company had undertaken to draft up the effects of the proposed extra cash on members’ pension prospects.

Transport Minister Leo Varadkar welcomed the “significant” response from Aer Lingus to the Expert Panel’s recommendations.

“I also welcome the statement from the DAA that, although it will continue to review the report, it also believes that the panel’s recommendations represent ‘the basis for a final and complete resolution of pension arrangements’,” he said. “The DAA has also re-affirmed its commitment to engage with all stakeholders. The panel’s report provides the best and last opportunity to resolve the long-standing difficulties in the IASS.”

He urged all other parties to accept the proposals.