Aer Lingus is likely to ground almost half its transatlantic fleet

Aer Lingus is expected to ground almost half its transatlantic fleet following last week's terrorist attacks on New York and Washington.

Fleet cutbacks are to be confirmed in the next few days and it is understood that three of the airlines eight Airbus 330s are to be mothballed. The large Airbuses are used on the long-haul routes to the US which are to be scaled back.

Up to four of the company's 29 strong short-haul fleet will also be taken out of service for the winter. Two Airbus 321s and two Airbus 320s are also expected to be grounded. Leased aircraft which have convenient breakclauses in their leases will be the first ones to be taken out of service.

The Minister for Public Enterprise, Ms O'Rourke, confirmed yesterday that the Government could not bail out the State-owned airline which was set to lose €30 million (£23.63 million) this year before last week's events.

Current European Union rules prevent assistance of the sort that the Bush administration is considering extending to the hard-pressed US airlines, she acknowledged yesterday.

"Obviously Aer Lingus will have some difficulty but the board is meeting and I am quite sure they will come up with a realistic, achievable set of plans and we will discuss them," said Ms O'Rourke who was attending the 7th Annual Aviation Conference in Dublin yesterday. "They have come through difficulties before and they have managed," she said.

Aer Lingus unions and management meet today to discuss the situation. Temporary and seasonal jobs are thought to be most at risk followed by those in ancillary areas such as ground handling and catering. An airline spokesman said the company did not know what the future held for its 6,000 employees.

While accepting that the airline faces a crisis, senior trade union negotiators maintain it is not as serious as in the mid-1990s, when they signed up to job cuts and a wage freeze under the Cahill Plan. "We'll have to listen to whatever the company has to say, but this is not a Cahill Plan situation. The company is much better placed now to survive any downturn," said IMPACT assistant general secretary, Mr Michael Landers, who represents pilots and cabin crew.

SIPTU branch secretary Mr Owen Reidy, who represents 3,700 of the airline's 6,600 staff, said everyone acknowledged there were problems. "The critical issue is how the company plans to address them. Then we can take stock," he said.

Transatlantic travellers account for one-seventh of the airline's seven million annual passengers. However, a disproportionate amount of its profits come from the transatlantic routes on which it has already lost five days' business.

The airline re-activated its full schedule of flights yesterday, but new security measures require passengers to check in at least three hours before departure.

The company now faces further reductions in its transatlantic passenger and freight business. The airline will also have to shoulder the cost of stringent new security measures imposed by the EU and the Federal Aviation Authority. The spokesman said it was still unclear what the federal restrictions on freight would be. The airline is also awaiting the outcome of arbitration expected to increase its pilot wages' bill by £5 million.

US airlines have said they expect to cut back flights by around 20 per cent, but it is not clear if they will cut back on transatlantic routes. They include American Airlines - the largest carrier - and United Airlines - the second largest. Both companies employ around 200 people each in Dublin at reservation centres for the European markets. Continental has said it will "furlong" 12,000 of its 56,000 staff. Both Continental and Delta compete with Aer Lingus on the transatlantic.

Virgin Atlantic airways joined US competitors yesterday and axed a fifth of transatlantic flights as well as cutting its workforce. The carrier, founded by entrepreneur Sir Richard Branson, said in a statement it would cut 1,200 jobs and ground five Boeing 747-200 jets.