THE BOARD of Aer Lingus is to hold an extraordinary meeting today to consider its options following a rejection by more than 1,000 cabin crew of a €97 million restructuring plan for the airline.
Aer Lingus management had signalled it could make about 1,000 staff compulsorily redundant and introduce widespread route cutbacks if the deal was not accepted by staff. However, while the company said it was still determined to secure the level of savings sought, it was unclear last night whether the airline would take such a course at present.
A senior source close to the board of Aer Lingus said: “The nuclear option is always available to us but it will be used reluctantly.” A meeting of the board will be held this morning, with some board members expected to link in by telephone.
Last night craft workers at Aer Lingus voted by 83 per cent in favour of the cost saving deal.
One highly placed source close to the company said the compulsory redundancy plan had been floated when it seemed possible that pilots and all other staff could reject the deal. Sources said the board would have to examine the position now that four unions had accepted the restructuring proposals.
In a statement yesterday, the airline said despite the outcome of the ballot of cabin crew, represented mainly by Impact, it was determined to achieve the annualised cost savings of €97 million targeted by the cost-reduction programme over the period to 2012.
“These savings are vital to realign the cost base of the company and position Aer Lingus for a successful future. The company’s board of directors will meet tomorrow to formally approve the steps that will now be taken to achieve these cost savings,” it said.
Aer Lingus said yesterday it would postpone publication of its full-year 2009 results. It will, however, issue a brief trading update to the stock market this morning.
Aer Lingus had planned to book an exceptional charge in its 2009 financial results relating to the latest restructuring programme. Its failure to agree a deal with all sections of the airline means it must now rework its financial numbers for last year.
“Following the outcome of recent staff ballots, it is necessary to revise the provision for restructuring costs and amend the preliminary results accordingly,” the airline said in a statement yesterday.
Analysts had expected Aer Lingus would book a restructuring charge of up to €60 million relating to staff cost savings associated with its restructuring plan. The staff element of the cost-cutting programme was to have delivered savings of €74 million a year and would have resulted in 676 voluntary redundancies.
Aer Lingus has appointed German executive Juergen Krins as programme manager for “Project Greenfield”, the name for the restructuring plan within the airline. Mr Krins will report to interim chief financial officer Andrew Macfarlane.