U-turn inevitable on airline aid - union

The European Union will be forced to allow the Irish Government to aid Irish airline Aer Lingus which has suffered a dive in bookings after the attacks on America, a union said today.

General workers’ union Siptu said it was ‘‘inevitable’’ that there would be a u-turn on the policy of not granting state aid to airline companies, otherwise ‘‘the only airlines left flying will be the American airlines’’.

The claim comes after Public Enterprise Minister Mary O’Rourke told the Irish Parliament yesterday that European law prevented the Government from funding airlines through the current crisis.

Transatlantic bookings with Aer Lingus are down 80% on the same period last year. The company expects to make losses of £70m in 2001, rising to £100m in 2002.

Hundreds of jobs have already been shed in what Ms O’Rourke described as a ‘‘grave situation’’.

There must now be a radical overhaul if the company is to survive, she added.

Today, Siptu spokesman Noel Dowling said: ‘‘It is an extremely difficult situation but the Government can take steps to minimise the damage done to Aer Lingus.

‘‘The EU might be beginning to accept the fact that if they don’t put aid into airlines in Europe, particularly in the transatlantic areas, whenever there’s a pick-up in the aviation industry the only airlines left flying will be the American airlines.’’

He added: ‘‘The Americans can put billions into their airlines but Europe has to sit back and watch its airlines disappear.’’

Commenting on the suggestion of Michael Noonan, leader of the opposition Fine Gael party, who recommended splitting the company in two and aiding just the transatlantic arm, he said: ‘‘It is obviously motivated by the intention of getting state aid into Aer Lingus.

‘I do not know that it is a necessary mechanism in regards to the EU but I think the EU will inevitably be forced to sanction Governments putting money into their own airlines.’’

Mr Dowling said unions accepted there would be job losses and that drastic restructuring was needed.

‘‘It is patently obvious that when a company loses the volume of passengers that Aer Lingus has lost that the same structure cannot carry forward into the future.

‘‘The members have been hearing bad news since September 11.’’