Aer Lingus faces further cost cuts if summer revenues are lost, chief says

Aer Lingus faces further cost cuts if the Government fails to act on a plan to restart air travel, the carrier's new chief executive, Lynne Embleton, has warned staff.

The National Civil Aviation Development Forum (NCADF) this week published a recovery plan that calls for the Government to axe Covid-19 quarantines in favour of testing and vaccine proofs to aid the recovery of air travel.

Ms Embleton warned Aer Lingus staff in an internal memo that there is now a risk of losing this summer, which is when the airline stands to earn most of its revenues.

“Should the current negative trajectory continue, it would have a significant financial impact on the airline and we would have to carefully assess its implications,” her note stated.

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She noted that Aer Lingus’s current skeleton flying programme is having a stark impact on the airline.

"Recent events including mandatory hotel quarantine being widened to include key markets such as [the] US, France and Italy have compounded the situation," Ms Embleton said. She added that the Republic's travel restrictions are the most stringent in Europe.

Restart plan

She told the airline’s 4,000 remaining workers that agreeing a coherent, credible plan to restart aviation is key to getting Aer Lingus flying again.

The carrier’s chief executive explained that the forum’s plan manages infection risks throughout a passenger’s journey. She stresses that the airline is pushing Government to implement the plan.

Aer Lingus employs 1,100 fewer people than it did before Covid-19 curbs hit travel last year.

About 400 people left through voluntary severance, 500 through expired fixed-term contracts or withdrawn job offers, 100 people are furloughed while 150 are on career breaks. Ms Embleton’s note did not say where the airline will cut further costs.

Ryanair, Ibec and State airports companies, DAA and Shannon, are also members of the NCADF. Its plan argues for introducing the European Union's revised traffic-light system for travel.

This ranks regions according to their Covid-19 infection risk and calls for countries to use virus testing and proof of vaccination or immunity to allow travel.

The Republic’s demand that travellers from some countries must quarantine for two weeks in a hotel is drawing in increasing fire from trading partners.

The EU Commission has questioned whether forcing travellers from member states to quarantine breaches their right to freedom of movement.

Meanwhile, Italian business figures living in the Republic have written to the country’s foreign minister and ambassador to Ireland criticising the measure.