Irish airline to slash hundreds of jobs, cut pay
Posted: 07 October 2009 1905 hrs
Aer Lingus cabin crew board an aircraft at Belfast International Airport, Northern Ireland.
DUBLIN: Aer Lingus, the loss-making Irish airline, on Wednesday said it planned to save 97 million euros (US$143 million) a year by 2011, largely by cutting nearly 900 jobs and staff pay.
The world's commercial airlines have struggled in the face of a spreading global recession that has curbed demand for flying.
Aer Lingus' new chief executive Christoph Mueller on Wednesday described the company's outlook as "poor," adding that no "near-term recovery" was expected.
"Against this backdrop, Aer Lingus cannot continue with an operating cost base, which is structurally uncompetitive when compared to that of its closest peers," added Mueller who began his reign as chief executive on October 1.
Aer Lingus said in a statement that it planned to reduce operating costs, excluding fuel, by 97 million euros per annum by 2011, including staff cost savings of 74 million euros.
The group said 863 jobs would be axed. Of those, 676 positions would be lost in two stages.
"Changes in staff numbers resulting from a reduced flight schedule and changes to work practices are expected to result in a surplus of approximately 489 positions in operational areas and some support areas," it added.
A further 187 staff would go in a second round of job cuts.
The airline meanwhile said staff keeping their jobs would be required to take a pay cut as the airline "cannot survive in a situation where staff are paid significantly more and operate less efficiently than comparable positions at its peers."
It added: "Significant operating cost savings have been identified through... banded reductions in basic pay for staff whose basic pay exceeds 35,000 euros per annum and reduced variable pay and allowances for all staff."
Aer Lingus' net losses more than tripled in the first half of 2009, as the global economic downturn curbed demand for air travel, the carrier had announced in August.
It suffered a net loss of 73.9 million euros in the six months to June. That compared with a loss after tax of 21.6 million euros in the same period of 2008.
Revenues tumbled 12.2 per cent to 555 million euros on the back of lower passenger fares and cargo revenues.
Aer Lingus last month appointed Mueller, former aviation director at travel group TUI Travel, as its chief executive.
British Airways on Tuesday said it would cut 1,700 jobs and freeze pay in its latest initiative to stem losses.
Posted: 07 October 2009 1905 hrs
Aer Lingus cabin crew board an aircraft at Belfast International Airport, Northern Ireland.
DUBLIN: Aer Lingus, the loss-making Irish airline, on Wednesday said it planned to save 97 million euros (US$143 million) a year by 2011, largely by cutting nearly 900 jobs and staff pay.
The world's commercial airlines have struggled in the face of a spreading global recession that has curbed demand for flying.
Aer Lingus' new chief executive Christoph Mueller on Wednesday described the company's outlook as "poor," adding that no "near-term recovery" was expected.
"Against this backdrop, Aer Lingus cannot continue with an operating cost base, which is structurally uncompetitive when compared to that of its closest peers," added Mueller who began his reign as chief executive on October 1.
Aer Lingus said in a statement that it planned to reduce operating costs, excluding fuel, by 97 million euros per annum by 2011, including staff cost savings of 74 million euros.
The group said 863 jobs would be axed. Of those, 676 positions would be lost in two stages.
"Changes in staff numbers resulting from a reduced flight schedule and changes to work practices are expected to result in a surplus of approximately 489 positions in operational areas and some support areas," it added.
A further 187 staff would go in a second round of job cuts.
The airline meanwhile said staff keeping their jobs would be required to take a pay cut as the airline "cannot survive in a situation where staff are paid significantly more and operate less efficiently than comparable positions at its peers."
It added: "Significant operating cost savings have been identified through... banded reductions in basic pay for staff whose basic pay exceeds 35,000 euros per annum and reduced variable pay and allowances for all staff."
Aer Lingus' net losses more than tripled in the first half of 2009, as the global economic downturn curbed demand for air travel, the carrier had announced in August.
It suffered a net loss of 73.9 million euros in the six months to June. That compared with a loss after tax of 21.6 million euros in the same period of 2008.
Revenues tumbled 12.2 per cent to 555 million euros on the back of lower passenger fares and cargo revenues.
Aer Lingus last month appointed Mueller, former aviation director at travel group TUI Travel, as its chief executive.
British Airways on Tuesday said it would cut 1,700 jobs and freeze pay in its latest initiative to stem losses.
