AER LINGUS will today unveil a radical restructuring plan that will put it on a collision course with its staff and trade unions and could lead to industrial action.
It is understood that Aer Lingus wants to reduce its 3,900-strong headcount by about 675 to help return the airline to profitability.
Sources said about 490 staff in its frontline operations would be targeted initially. Another 185 will be sought from its back office and headquarters operation. All of the job cuts will be sought on a voluntary basis.
These cuts are on top of the departures of about 100 staff this year, including 63 temporary cabin crew who were let go last month.
Aer Lingus’s new chief executive, Christoph Mueller, will seek to outsource a large number of functions, including its catering and cleaning services and some back office activities. Baggage handling and other ground operations could also be targeted.
It is understood the airline will continue to directly employ pilots, cabin crew, line maintenance staff as its core workforce. It will also retain certain management and head office functions.
Aer Lingus will also seek an end to so-called “legacy” work practices as part of the plan. An average 10 per cent pay cut will be sought across the board. The effect for some staff will be a reduction in pay of up to 30 per cent. The airline’s directors will also have their remuneration cut.
Sources say Aer Lingus will also seek to close or freeze its existing defined-benefit pension scheme. It intends to open a new fund, offering lower benefits to members and with reduced contributions from the airline. The new scheme is likely to be a defined contribution one, which means staff will not be guaranteed a payout based on their final salaries.
Some senior managers were briefed about the proposals last night. Meetings with other staff were due to begin at 7am this morning with briefings being held throughout the day, including at its airport bases in Belfast and London Gatwick.
Aer Lingus will also announce its traffic statistics for the first nine months of this year, which will show continued weakness in its transatlantic numbers.
The cutbacks will inevitably affect Aer Lingus’s services and there is expected to be a signal about the future of its long-haul operations, which accounted for the bulk of its €93 million operating loss in the first six months of this year.
The restructuring plan was approved by the board of Aer Lingus on Friday at a five-hour meeting.
It is not clear what terms will be offered to staff. Chairman Colm Barrington has said the airline would not be able to offer the type of packages that were given in previous redundancy programmes, which amounted to payouts of nine weeks for each year of service.