Aer Lingus ‘reluctantly’ agrees to increase payments to employees

Airline accepts expert panel recommendation to resolve ongoing pensions row with staff

Aer Lingus has "reluctantly" accepted a proposal by the Government-appointed expert panel to increase payments to serving personnel.

The airline said in a statement that it had agreed to increase its proposed capital injection into new pension arrangements for serving personnel from €110million to €146.7million.

Chief executive Christoph Mueller said it had decided to comply with the panel's recommendation as it was "the only solution that is capable of acceptance by all the parties."

Aer Lingus has also agreed to allocate €14 million on top of €30 million previously promised, for pension arrangements for former personnel who have left the company but not yet retired.

The total revised once-off payment by the company is €190.7 million in addition to implementation costs.

“Implementation of the solution will be very complex and will require a concerted effort by all of the parties,” said Mr Mueller.

“A significantly improved industrial relations environment is also a key requirement and a functioning internal dispute resolution mechanism must be established for this purpose,” he added.

The expert panel was established earlier this year to try and find a solution to the onogoing pensions row between staff and the airline.

Aer Lingus and the Dublin Airport Authority (DAA) have been involved in a dispute over a €760 million deficit in the pension scheme at the companies.

Union members at both companies voted for industrial action earlier this year over the deficit in the Irish Airlines Superannuation Scheme (IASS), which they jointly operate.

As well as urging Aer Lingus to increase its contribution to serving staff from €110 million to €146.7 million, the expert panel also called on the DAA to raise the amount it would offer from €50 million to €57.3 million.

The Labour Court last year recommended that Aer Lingus put up a €140 million lump sum, while the airport authority contribute €50 million. Both companies agreed to this but Siptu later said the sums were no longer enough to solve the problem.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist