Aer Lingus examines bids for aircraft work

Aer Lingus is conducting a due-diligence examination of bids for two maintenance contracts amid concern that any move to take the business from its long-standing contractor SR Technics could result in the loss of 1,500 jobs at Dublin airport.

While the Aer Lingus board was briefed on the process at a meeting yesterday, no decision was taken on the allocation of the contracts. Directors are likely to be briefed again next week.

The line-maintenance contract, for day-to-day work on aircraft, and the base-maintenance contract, for periodic major servicing of planes, are estimated to be valued at some €50 million per year.

Aer Lingus had been advised it could save as much as €90 million over 10 years by dividing its maintenance work over five contracts, but the tender process has opened up the possibility of extracting even greater savings than that.

SR Technics, the former Team Aer Lingus which was demerged from the airline in the 1990s, is the only Irish-based company in contention for the line and base-maintenance business. Lufthansa's maintenance subsidiary is also thought to be in contention.

While SR Technics' initial bid was not deemed "competitive" vis-à-vis rival bids, the company is believed to have revised aspects of its proposal.

One of the issues under examination within Aer Lingus is the long-term viability of the SR Technics operation in Dublin.

It is understood, however, that SR Technics has told the airline that its commitment to the Dublin operation outlined in its bid is "absolutely real". A contract for the maintenance of aircraft wheels and brakes and a separate contract for engine maintenance have already been allocated. SR Technics did not win that business.

Separately, it emerged yesterday that Aer Lingus has told Siptu that it will proceed unilaterally on February 24th with the latest phase of a cost-saving reform plan if it does not reach agreement with the union before then.

Siptu branch organiser Teresa Hannick said the union would not accept the unilateral imposition of any change to workers' conditions. "Should this occur, this will be viewed as a provocative action."

Aer Lingus deputy chief Niall Walsh said in a letter to Ms Hannick that the airline expected a "very challenging environment" this year.