The viability of Cork and Shannon airports is under threat as Aer Lingus carries out a review of its operations which could put hundreds of jobs at risk.
The scale of the crisis — which will have a significant impact on business across Munster — has led to calls for the Government to bail out the aviation industry, which has been devastated by the Covid-19 crisis.
Including ground staff and cabin crew, Aer Lingus employs around 350 people at the two airports, with over half of those employed in Cork.
The unprecedented review comes as the airline grapples with huge losses. It is now involved in talks with trade unions about laying off up to 500 staff across the company amid the continuing Covid-19 economic crisis.
Losses raced up to €316m in the first six months of the year as revenues slid to €377m.
Businesses across the region would be badly hit if direct air services from Cork and Shannon failed to resume, Cork Chamber of Commerce has warned.
The Government needs to implement confidence-building measures for aviation to prevent damage to the economic prospects of the region, according to chamber director of public affairs Thomas McHugh.
Aer Lingus is the longest-serving airline at Cork Airport since the facility opened in 1961. The airline continued to operate its London Heathrow service from Cork during the Covid crisis, and was expected to start flying again to Amsterdam in the coming weeks.
Cork Airport declined to comment on the Aer Lingus review.
The airline also stepped up its criticism of the Government’s restrictions on international travellers into the island, claiming that a more balanced approach to quarantines is now called for.
In a video message to staff, Aer Lingus chief executive Sean Doyle said that the crisis will mean that Aer Lingus will inevitably be a smaller airline.
He told staff the airline has, at this stage, “no line of sight on any meaningful resumption of operations out of either Cork or Shannon Airports”.
“As such, we are reviewing the scale of our flying programme from these airports and the ongoing viability of our regional bases there,” he said.
“These decisions will not be taken lightly, but I can assure you that the additional steps that we are now undertaking are necessary and critical to position Aer Lingus for future recovery."
Aer Lingus said it has struck an agreement with the Irish Air Line Pilots' Association (IALPA) trade union, but not its two other main unions, Fórsa and Siptu.
Siptu has said it will not accept redundancies at Aer Lingus, adding that Government action was needed.
Aer Lingus was acquired by the IAG conglomerate five years ago when the Irish Government sold its 25% stake in the airline.
Separately, IAG chief executive Willie Walsh told reporters that it was already too late to save the planned job losses at Aer Lingus, and suggested more job losses in the future could not be ruled out.
Mr Walsh did not play down the scale of the crisis facing the airline and took aim at the Government’s Covid health regulations.
He said that “locking up” some air travellers for 14 days made no sense, and called on the Government to look again at its quarantine rules.
Aer Lingus was lagging behind the recovery seen by other airlines because of the Government’s restrictions, he said, and although the airline understood the need for caution, Mr Walsh claimed that the Irish rules were tougher than those in other countries.
“If anybody thinks this is just a temporary issue that can be addressed through some temporary measure, all you have to do is look at the scale of the losses,” he said.
He said that the airline was not looking for “a handout” from the Government for aviation.
Meanwhile, Ryanair has launched a High Court action aimed at setting aside what it claims are international travel restrictions announced by the Government earlier this month.
Ryanair claims the 'restrictions' arising out of the Covid-19 pandemic are unlawful, amount to a disproportionate interference of individual's rights, and are detrimental to its business.
In its action, Ryanair is challenging measures, announced on July 21, including that persons do not travel outside the island of Ireland, save for essential purposes, and that everyone holiday at home in 2020.