Aer Lingus cuts jobs and pay in a bid to save 97m a year
AER LINGUS, the Irish airline, is axing around 800 jobs as it seeks to save €97m (£90m) a year by 2011.
The shamrock-crested carrier, which has fended off two hostile bids from Irish rival Ryanair – one of the most cost-efficient players in the industry – said it could not survive “in a situation where staff are paid significantly more and operate less efficiently than comparable positions at its peers”.
New IT systems, updated working methods and a cut in the number of flights it runs will lead to 676 jobs going, while 100 staff have already been told their contracts will finish.
The airline, which has been rapidly burning through its cash reserves, will cut the basic salaries of higher-paid staff, while all workers will see a drop in the allowances they receive.
Aer Lingus has been struggling amidst slumping fares and high fuel costs.
It made losses of €73.9m in the six months to end of June, over three times the €21.6m losses it made a year previously.
Revenue fell to €555m, down 12.2 per cent on the €632m it made a year ago.
Chief financial officer Sean Coyle said the airline was now bracing itself for staff anger and the possibility of strikes.