DAA had its eye on Aer Lingus talks

ONE PARTY who will have been keeping a close eye on Aer Lingus's successful cost-cutting talks with Siptu is the Dublin Airport Authority.

The airport manager is gearing up to tender for the operation of Terminal 2 at Dublin Airport. It wants those working in the new building to operate under different terms and conditions to those that have been enjoyed to date by the 1,600 workers at the airport, most of whom are represented by Siptu.

Although the DAA was charged with building the new terminal facility, the Government has yet to decide who will run the building, which is slated to open in the first half of 2010.

The Government has hired consultants to advise on the process and the likelihood is that DAA will face private sector competition for what should be a chunky contract.

While outsourcing is not on the table, the DAA is expected to seek discussions with Siptu shortly on introducing greater flexibility and new pay rates at Dublin airport in advance of tendering.

Siptu's deal with Aer Lingus to lower the terms and conditions for ground staff at the airline's Dublin, Cork and Shannon bases should help the DAA's argument.

Whether Siptu is prepared to play ball remains to be seen. Clearly the union was determined to retain a foothold at Aer Lingus by its willingness to offer up what are radical changes to the pay and work practices of its members as part of a €20 million package of savings.

Agreeing a deal with DAA might be more palatable than trying to negotiate with a new operator. It's not even clear if any new operator would be required to recognise trade unions, although given that it is a State contract it is highly likely that they would.

In addition, any new operator would likely be competing with the DAA, which will continue to run the existing terminal, in which case the State-owned airport manager would probably have to seek changes to pay rates anyway.

Like Aer Lingus, the DAA is facing a much tougher operating environment as the recession affects consumer spending.

Passenger numbers are likely to fall in 2009 as Ryanair and other airlines trim their schedules and fewer airlines seek to launch new routes. In a sense, the recession is a handy card for the DAA to play.

Siptu will no doubt argue that DAA remains profitable, which is true. DAA is also State-owned, making it easier, in theory, for Siptu to resist change.

But agreeing to reduced terms at Aer Lingus will make it harder to hold the line with the DAA.