O'Leary 'pragmatic' on Aer Lingus pensions

RYANAIR CHIEF executive Michael O’Leary yesterday appeared to soften his stance in relation to Aer Lingus plugging the deficit in its pension scheme.

“Our concern is that the board of Aer Lingus, largely Government appointees and political hacks . . . will do a back-door deal,” Mr O’Leary said in relation to the €500 million-plus deficit in the scheme, which is operated jointly with the Dublin Airport Authority and SR Technics.

“However, I wouldn’t be definitive. If there was some minor contribution made on top of the €100 million paid [as part of Aer Lingus’s IPO] in 2006, in return for an absolute guarantee that, thereafter, there would never be another pension contribution, come hell or high water, we would take a pragmatic view of it.”

To date, Mr O’Leary has been trenchantly opposed to Aer Lingus making any payment to plug the pension scheme deficit.

Meanwhile, deputy chief executive Michael Cawley said the group met last week consultants from Booz, the UK group that has been engaged by the Minister for Transport and Tourism Leo Varadkar to produce a report on how Cork and Shannon airports might be separated from the control of the Dublin Airport Authority.

“We are absolutely pessimistic that nothing is going to come of this because the brief they [Booz] have got is that they can’t break off Cork and Shannon without taking the debts they’ve got,” Mr Cawley said.

He said Cork Airport’s debt was too great for it to be able to operate as a standalone entity. “You can’t run an airport the size of Cork with debts of €130 million,” he said. “We recommended that most if not all of the debt should be taken away from Cork . . . [to] give them the freedom to make financial deals with the likes of ourselves away from Dublin,” Mr Cawley said.