A price war has broken out as Aer Lingus and Ryanair try to generate extra business on short-haul routes in response to the growing slump in air travel.
The Aer Lingus board is expected to receive a progress report today on a survival plan that could cut up to 2,500 permanent jobs and 700 temporary posts at the airline.
Both Aer Lingus and Ryanair are offering reduced rates to travellers who book between now and October 18th. Aer Lingus is offering fare cuts of up to 70 per cent for flights from Ireland and 50 per cent inward-bound flights. Within two hours of the Aer Lingus announcement, Ryanair was offering even lower fares on all its routes to the UK, plus Paris and Brussels.
Aer Lingus has cut all return fares from Ireland to the UK to £59 (€75) while Ryanair offered fares as low as £29.99p on midweek flights with an unspecified "small supplement" for weekend travellers.
However, it claims that its "lowest price guarantee" means fares "can't be undercut".
The Aer Lingus offer is on all flights booked until November 30th, while the Ryanair offer applies to bookings up until May 26th, 2002. All fares include airport taxes.
Aer Lingus is also offering return tickets of £99 on all continental routes and the Ryanair offer of £29.99p is offered on its Paris and Brussels flights. Aer Lingus is cutting fares to New York and Boston from £324 to £169 and there are similar cuts on Chicago and Los Angeles schedules - bringing prices for return routes down to £199 and £249 respectively.
Final figures on the Aer Lingus restructuring are not expected until the end of the week. The Minister for Public Enterprise, Ms O'Rourke, is due to get a finalised survival package in time for the Council of Transport Ministers in Brussels on October 16th.
It appears that about 70 per cent of redundancies are expected to be in Dublin, with Shannon providing most of the remainder. Cork has so far been relatively untouched by the cutbacks, but this could change as figures are finalised.
Aer Lingus may have to go head to head with Ryanair on some short-haul routes and is likely to scrap meals on flights of less than two hours. American Airlines, which is a strategic partner of Aer Lingus in the One World Alliance, has already announced a similar move.
The employees most threatened are cabin crew and caterers who have a record of bad industrial relations with the company. The secretary of the Central Representative Council at Aer Lingus, Ms Kay Garvey, said yesterday that employees were "having to rely on leaks in the papers for information". The company was handling the situation "more like a game plan than a survival plan. Sadly it is a game plan that affects people's lives".
The two main unions in Aer Lingus, SIPTU and IMPACT, met with their financial advisers, Farrell Grant Sparks, yesterday. Afterwards, they decided to write to the company demanding specific information on its survival plan.
SIPTU national industrial officer Mr Noel Dowling said it was necessary to write to the company because it had not supplied the unions with any hard information for two weeks. "We need to know what their plans are to deal with the crisis. Basically they seem to be pulling the shutters down as far as information is concerned."
He queried the viability of the company if it shed 2,500 permanent jobs. "Not much effort seems to have gone into considering how the company will continue to operate after the cuts, or whether they could send it into a tailspin."
