Aer Lingus must retain TEAM: unions

The TEAM trade unions will urge the Minister for Public Enterprise, Ms O'Rourke, to put on hold the Aer Lingus strategy for disposing of the aircraft maintenance facility to FLS, when they meet her today. They will tell her that they are willing to discuss any range of options, including an employee share-option (ESOP) scheme, provided Aer Lingus retains its majority shareholding in TEAM.

The chairman of the Aer Lingus craft group of unions, Mr Eamon Devoy, said yesterday that whether people liked it or not, his members had letters guaranteeing each one of them the right "to remain a member of Aer Lingus staff" and to retire "as a member of Aer Lingus staff, retaining full Aer Lingus retiree conditions". These letters had been given to the workforce by Aer Lingus and endorsed by Ms O'Rourke's predecessor, Mr Seamus Brennan. He expected the company and the Government to honour their commitments.

Craft shop stewards, who drove the successful No campaign to the £54.6 million buy-out of the "letters of guarantee", said yesterday that the sale of TEAM to FLS was no longer an issue. "The Minister should tell Aer Lingus management to stop messing around and negotiate with us seriously," one said.

This group, which will probably be strongly represented at today's meeting, insists that there is a future for TEAM within the Aer Lingus group. It says that it is already doing £85 million worth of business a year, of which £28 million comes from Aer Lingus.

The expansion in the Aer Lingus fleet over the next five years will mean the national carrier's maintenance bill will rise to £65.5 million by 2002. Even if TEAM doesn't get all of that business, the figures fully justify increased investment in the company by Aer Lingus, the group maintains.

Shop stewards continue to believe there has been artificial price fixing within the Aer Lingus group, so that low rates charged for maintaining Aer Lingus aircraft represent a hidden subsidy to the parent company. They point out that the maintenance bill is now almost half the £53 million it was in 1993.

"When restructuring took place the accounts of TEAM were consolidated in the Aer Lingus group account and maintenance costs reduced overnight," one shop steward said. The craft unions would be asking the Minister to guarantee that Aer Lingus maintenance will remain with TEAM.

He also said that a pension provision of £35 million to cover pensions was made against TEAM in the accounts. This was an unfair burden to impose on a young company.

The craft workers will also argue that TEAM could be an asset in the search by Aer Lingus for a strategic partner. Some airlines would be delighted to have a high quality maintenance facility available. If Aer Lingus became "a virtual airline", it would shed other non-core activities like catering and baggage handling.

While the workers were unwilling to surrender the "letters of guarantee" for £54.6 million, they might be willing to convert them into equity in TEAM; much as Telecom Eireann workers converted their pension entitlements into a £180 million ESOP with that company. However, any talk of ESOPs is still in its infancy and it is probably the last thing the company, or any potential buyer, will want to hear.

Ms O'Rourke, on the other hand, is expected to be listening hard to what the delegation has to say. With both the company and the union leaderships having so misjudged the mood of the TEAM workforce in Monday's ballot, she will be using her own political antenna to try and identify problem areas and how the fears of the workers can be overcome.

Aer Lingus management will be submitting new proposals to Ms O'Rourke, possibly as early as next week, on how to salvage the situation. It remains committed to the sale to FLS.

The company categorically rejects the claims that it engaged in price fixing within the company. "Normal commercial rates and normal commercial practices existed at all times," a spokesman said.

The reason for the dramatic drop in maintenance costs after 1993 was the purchase of new aircraft. Although the company would have a maintenance bill of £65.5 million by 2002, the company says that TEAM only has facilities to deal with £37 million worth of this business at most.

Company sources admit that the size of the Yes vote on Monday and the sort of issues still being raised by shop stewards show that a lot more work is needed, if workers are to be persuaded that their best long-term interests rest with FLS.