Troubled Aer Lingus to revise its rescue plan

Aer Lingus is revising the rescue plan designed to reverse its already substantial losses amid fears that the attacks on the US could cost thousands of jobs in the global aviation business.

Plans by the State-owned company to halt a downward trend that caused a €38 million (£29.9 million) loss in the first half of the year were well advanced before hijacked planes attacked the World Trade Centre and the Pentagon.

The airline accepts its position has seriously worsened in the wake of the carnage, which is expected to prompt millions of passengers to shun air travel. The downturn is likely to prove very difficult for Aer Lingus, which is already suffering after a spate of strikes, foot-and-mouth and low US ticket sales due to the economic slowdown.

"What we've effectively done is gone back to the drawing board. We're revisiting the review from the ground up," an Aer Lingus spokesman said.

"We are not going to know for definite what the fallout will be for some time. We have clearly to make assumptions that this is certainly going to make a hard and difficult situation worse. We'll have to take a view as to how worse."

Senior airline managers will work this weekend on complete revisions of a rescue plan that was to be put to the Aer Lingus board on September 27th.

There are no plans to hold an emergency board meeting.

Airline executives are thought to regard talk of possible redundancies as "premature", although the company was expected to hire less temporary staff in 2001 after losses mounted earlier this year.

The airline was not expected to close down any US routes in the original drafts of the review and it is not known whether this will now be on the agenda.

Sources say Aer Lingus could find itself in an "extremely severe" situation after the attacks.

"No decision has been taken on anything at this stage," an informed figure said.

"Pre-Tuesday and post-Tuesday are entirely different eras in the airline business and we're looking at the business from that point of view."

With much of the airline's fleet grounded this week after the US closed its airports, Aer Lingus's management also faces a significant operational challenge.

In addition to falling ticket sales, the company will face rising costs if security measures at airports are stepped up.

With EU transport ministers poised to debate such a move last night, the Association of European Airlines yesterday said they should think twice before imposing new measures on an industry that was already under extreme pressure.

A fresh slump in global airline stocks yesterday underscored fears of mammoth financial losses and swingeing cutbacks.

After large losses since Tuesday, Ryanair lost more ground on the Dublin Exchange yesterday, closing 6.52 per cent weaker at €7.60.