Aer Lingus likely to pull out of Oneworld alliance

Aer Lingus is likely to pull out of the Oneworld alliance of eight international airlines when its members meet in three months, The Irish Times has learned.

The State airline is understood to be considering its position in the alliance in light of the fact that it has reinvented itself as a low-fares carrier, which is not fully compatible with the full-service model offered by Oneworld's other members.

Aer Lingus management, led by chief executive Mr Willie Walsh made its position clear to the rest of the alliance at a meeting four months ago.

Oneworld is due to meet again in November, and sources said last night that it was possible that the Irish flag carrier would signal its intention to pull out of the alliance at that stage. As the alliance involves offering standard service on all eight airlines, membership of Oneworld would require Aer Lingus to maintain full service on all its routes.

However, it intends to eliminate business class seats from all flights to the UK and Europe by next April, but maintain them on transatlantic routes.

Sources said yesterday that other Oneworld members wanted to stick with a more traditional approach to air travel, while others were not as exposed as Aer Lingus to low-cost competitors like Ryanair and Easyjet.

"British Airways loses money on short-haul routes and says it is happy to do that, and some of the US airlines are a lot more insulated from competition and the government there keeps giving them money," one observer said.

Oneworld's other members are: American Airways, LanChile, Quantas, Cathay Pacific, Iberia, Finnair and British Airways. Membership allows the airlines to sell passengers flights on the other seven, thus offering a larger variety of routes.

However, Aer Lingus has stated that it is more focused on expanding its own network of routes in Europe and the US.

Meanwhile, the company's management will face 50 SIPTU shop stewards, representing 2,400 workers from around the country, at a meeting in Dublin later today. The meeting is being held to discuss both Aer Lingus's plan to cut 1,325 jobs over three years and the terms of the redundancy package on offer.

The union's members have already voted overwhelmingly in favour of industrial action and its officials have warned that it will take this action if the company attempts to act unilaterally or to force workers into accepting redundancy.

Mr Christy McQuillan of SIPTU last night told The Irish Times that his organisation was primarily concerned with maximising the number of jobs in the airline, which he argued was the most successful State-owned company.