Aer Lingus owner to stall investment until pilots pay row ends

Aer Lingus owner International Airlines Group (IAG) will stall delivery of new aircraft to the Irish carrier until its pilots’ pay row is resolved, its chief executive Luis Gallego has said.

The airline’s pilots are seeking pay rises of more than 20 per cent after rejecting an offer amounting to 8.5 per cent. The dispute is due before the Labour Court in coming weeks.

Mr Gallego said that IAG would be limiting investment in Aer Lingus until the dispute is resolved. “We want to invest in Aer Lingus but the gap between us is very extreme,” he stressed.

The IAG chief executive added that the group was considering boosting the Irish carrier’s fleet, but argued that this would not make sense until the dispute ended. “Without an agreement they [new aircraft] are not going to fly in Aer Lingus,” he said.

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Aer Lingus chief executive, Lynn Embleton, said the company had not received a date for a likely Labour Court hearing. She warned that timing was “absolutely critical”.

Ms Embleton added that the carrier’s pilots deserved to be well paid, but had refused a pay deal accepted by most other Aer Lingus staff.

The Irish Airline Pilots’ Association, part of trade union Fórsa, did not comment.

Pilots argue that the Aer Lingus pay offer fails to take into account the contribution they made to keeping the company afloat during Covid-19, when flying was grounded or severely curbed, or a 19 per cent rise in the cost of living since 2019.

Separately, Ms Embleton argued that the planning condition limiting Dublin Airport to 32 million passengers a-year should be lifted quickly.

Airport operator, DAA, has asked Fingal County Council to increase this to 40 million in an application seeking permission to extend Dublin’s facilities.

Ms Embleton said Aer Lingus believed that DAA should apply separately to have the cap lifted on an interim basis while the council considered its overall plan. “We should not be in this position, I do not think this has been well managed,” she added.

The airline earlier said that profits soared 400 per cent to €225 million last year from €57 million in 2022 as the post-Covid travel boom continued.

Aer Lingus had revenues of €2.27 billion last year, beating 2022 sales by more than €500 million. It flew 10.7 million passengers.

Higher costs left profits lagging the €276 million that the airline earned in 2019, the year before Government imposed Covid travel curbs that were not finally rowed back until early 2022.

Strong demand for holiday travel on both its European and North American routes boosted its performance, the airline said.

Ms Embleton said in a statement that the results put Aer Lingus on the right trajectory for the future.

“We have a compelling growth strategy for Aer Lingus that will be good for the company, our employees, our customers and for Ireland,” she added.

IAG figures show that Aer Lingus repaid €50 million to the State-owned Irish Strategic Investment Fund in early 2023.

The airline has an agreement with the fund allowing it to borrow up to €350 million. It drew €50 million of this in 2022, repaying it the following year. IAG noted that early debt repayments cut future interest payments.

Aer Lingus received two new Airbus A320neo aircraft in 2023. The company last year pledged to spend €306 million on its fleet, technology and customer services.

IAG, which also owns British Airways, Iberia and Vueling, earned profits of €3.5 billion last year before once-off charges, ahead of the €3.25 billion it reported for 2019.

Mr Gallego said the group had more than doubled its operating profit and margin since 2022.