New deal not cleared for take-off yet

The Aer Lingus-Dublin Airport Authority pensions row looked tantalisingly close to a resolution yesterday when the airline agreed to increase its contribution to a new scheme for both active and deferred members of the existing insolvent plan.

In fact, while a deal is ever so near, it is also very far away. One group of workers, airport police and first staff, can effectively veto it while another group, which has threatened legal action, has yet to say one way or other what it will do.

To refresh your memory: the Irish Airlines Superannuation Scheme (IASS) is in the red to the tune of €750 million. Aer Lingus and the Dublin Airport Authority, who jointly operate the defined-benefit scheme, have for several years been locked in a dispute with their trade unions over this problem.

The row has, on several occasions, threatened to ground the airline and shut the Republic’s airports. The last such threat, on St Patrick’s weekend, prompted the Government to establish an expert panel to find some way out of the deadlock.

In broad terms, a resolution requires the freezing and derisking of the existing plan and a reduction in payments to those drawing pensions, along with moving active and deferred members to a new defined-contribution plan.

Labour Court recommendations issued last year required Aer Lingus to pay about €150 million to the new scheme and DAA to contribute about €60 million. The unions, led by Siptu, say that these sums are not enough, while the deferred members, the largest single group involved, are also unhappy and have threatened legal action.

Aer Lingus yesterday announced, through gritted teeth, that it would agree to the expert panel’s recommendations and increase its total contribution to €190 million. The DAA did not go quite that far, but described the panel’s recommendations as a basis for a settlement. If it does agree, it will have to pay about €73 million.

Suddenly, it looked like a deal was possible, but it appears to hinge on whether the emergency staff use their veto, and on the reaction of the deferred members.