Aer Lingus moves to cut staff

Aer Lingus is seeking voluntary redundancies from its near 4,000-strong workforce as part of a cost-cutting plan that was put on hold while it was tackling its €750 million pension deficit.

Management at the airline has circulated staff outlining the terms of the severance deal, which includes six weeks’ pay for every full 12 months worked at the company and a series of long-service bonuses beginning at €5,000 after 10 years and running to €20,000 after 25 years.

The move is not connected to the International Consolidated Airlines Group's (IAG) €1.36 billion takeover approach that last week won the Aer Lingus board's conditional support. Instead it is part of a two-year cost-cutting and restructuring plan introduced by outgoing chief executive, Christoph Mueller, in 2013, and dubbed the cost optimisation and revenue excellence (CORE) programme. Aer Lingus originally sought the redundancies two years ago. While a number of workers were interested in taking the deal, the continuing uncertainty over the pension scheme that the airline shared with Dublin Airport Authority (DAA) made them unwilling to leave.

Staff moved at the beginning of this year from the insolvent salary-linked scheme, which had a €750 million deficit, to a defined contribution plan, as part of an overall settlement of the pension row.

As a result, the company decided to revive the redundancy programme originally put forward in 2013.

An internal staff circular from Federico Balzola, the company's chief people and change officer, says that the company is aware that many of those who originally signalled their interest did not apply because of the uncertainty surrounding their pension. The company is seeking cuts in the number of all staff based in the Republic, except pilots, who have worked for the airline for a minimum of two consecutive years.

While the plan is aimed at cutting numbers, the note says the company may “on limited basis” accept applications from long-serving staff.