The Taoiseach Bertie Ahern has been asked to make an 11th hour intervention in the pensions dispute that threatens to disrupt the Aer Lingus flotation.
In a letter sent this week, the president of Siptu, Jack O'Connor - a key negotiator behind the national pay deal Towards 2016 - calls on the Taoiseach to address the position of SR Technics workers who are not included in a new supplementary pension fund to be set up by the airline. The issue will be addressed at a mass meeting next Wednesday at Dublin airport.
The SR Technics workers formerly worked with Team Aer Lingus, the airline's former aircraft maintenance subsidiary, and they claim they have a right to be treated in a similar manner to current Aer Lingus workers. In the letter, Mr O'Connor states: "We have already drawn this issue to the attention of your colleagues the Minister for Finance and the Minister for Transport."
It is understood about 600 SR Technics staff are seeking to be part of the new supplementary scheme, but Aer Lingus says its legal advice rules this out.
Mr O'Connor writes: "In view of the urgency of the situation, occasioned by the recent announcement on flotation, I would be very grateful for your good offices to assist in a resolution". Mr O'Connor says no provision has been made for the SR Technics group, even though becoming part of the supplementary fund should guarantee indexation of pensions in future. Mr O'Connor claims the SR Technics situation creates a liability for the airline of €27 million.
So far, the Government has held a strong line against changing any substantial part of the IPO arrangements, including the supplementary fund. But the intervention by a senior trade unionist like Mr O'Connor will increase the pressure to alter the airline's prospectus to at least refer to the possibility of SR Technics staff having some kind of entitlement. The prospectus will be issued next week, but drafting of the document is continuing. Yesterday the chief executive of the airline, Dermot Mannion, said the pricing range would also be released next week. Analyst comment so far has been broadly favourable, although several analysts have questioned where future growth will come from.
The airline will be boosted by a softening of oil prices this week. US light crude was down to just over $68 (€53) last night on the back of the end to the US summer driving season and a weaker than expected hurricane season.
The airline only has 17 per cent of its oil needs hedged for next year and will have to make a decision in the coming months about what price it wants to lock into for next year. The prospectus is expected to warn that while open skies - shorthand for a liberalised US-EU aviation market - will present opportunities for Aer Lingus, US carriers are now better positioned to roll out new services into Europe than they were two to three years ago.
Several US carriers surprised markets recently with strong performances in the second quarter and the prospects for the rest of 2006 are favourable, many of them have indicated.
