Aer Lingus could revisit €140 million offer in pension row

Airline’s profits dip following fall short-haul revenues

Aer Lingus chief executive Christoph Mueller has signalled that the airline could be prepared to increase the €140 million it has pledged to a new staff retirement fund. Photograph: Alan Betson

Aer Lingus chief executive Christoph Mueller has signalled that the airline could be prepared to increase the €140 million it has pledged to a new staff retirement fund. Photograph: Alan Betson

Tue, Feb 25, 2014, 01:00

Aer Lingus chief executive Christoph Mueller signalled yesterday that the airline could be prepared to increase the €140 million it has pledged to a new staff retirement fund as part of a solution to the impasse over the €780 million deficit in its current pension scheme.

The company yesterday reported that pre-tax profit dipped 2.2 per cent last year to €39.5 million from €40.4 million the previous year, partly due to lower margins in its short-haul business. Revenue increased 2.3 per cent over the same period to €1.43 billion from €1.39 billion. Aer Lingus and the Dublin Airport Authority face the threat of strike in the run-up to St Patrick’s Day as a result of the deadlock over the €780 million deficit in their jointly-operated, defined-benefit pension fund, the Irish Airlines Superannuation Scheme (IASS).

The airline is committed to putting €140 million into a new defined-contribution plan as part of a Labour Court-endorsed settlement, but unions, including Siptu, which recently balloted for industrial action, argue that more cash is required.

Mr Mueller yesterday indicated that the airline could be prepared to soften its line that the €140 million offer, combined with a series of other measures proposed by the scheme’s trustees, should be adequate to deal with the problem. He said the company would stick to its guns and stick to its commitment. “However, that does not mean that we would not sit down and see what elements can be changed in the interests of a better solution,” he added.

Following the publication of Labour Court recommendations designed to settle the dispute over the IASS last May, Mr Mueller said he hoped the problem could be dealt with by the end of last year.

In a statement published with the results, he pointed out that the lack of progress on tackling the problem had “inhibited developments on several other key matters for our business”. He added that these could no longer be deferred and pledged to press ahead this year with a focus on service and cost.

It also emerged yesterday that trade union Impact has begun to ballot members at Aer Lingus – mainly cabin crew – for industrial action over the pension issue.

It has asked them to submit their ballot papers by March 5th, which would allow them to join Siptu members on the picket line, possibly before St Patrick’s Day.

Commenting on the results, Mr Mueller said last year was the first year of significant growth since the global economic downturn.

“We added 11.6 per cent additional capacity to our mainline long-haul network and more than sold this. We also successfully commenced contract flying operations and as a result, increased our short haul fleet by four aircraft,” he said.

Long haul reported a strong performance, with revenue up 11.1 per cent at €381.6 million, passengers numbers up 12.2 per cent.

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