Plans by Aer Lingus management to introduce cuts of up to €100 million at the airline were criticised by a number of the company's directors at a marathon board meeting yesterday. The board failed to agree to the proposals after more than eight hours of discussions.
The board members who are thought to have concerns about the plan include David Begg, general secretary of the Irish Congress of Trade Unions, and Colin Hunt, a former adviser to Taoiseach Brian Cowen when he was minister for finance.
Aer Lingus's cost-cutting plans have also come under the Government's scrutiny. It is understood that Tánaiste and Minister for Trade, Enterprise and Employment Mary Coughlan held a meeting earlier this week with the airline's chief executive, Dermot Mannion, and expressed her concerns in relation to the outsourcing of workers.
Aer Lingus representatives were also advised by Department of Transport officials that any decisions taken should be in the airline's "long-term" interests.
The cost-cutting proposals are believed to include the outsourcing of almost 1,500 jobs. This would include more than 1,100 workers at Dublin airport involved in ground handling, cargo and catering, about 80 staff in Cork and more than 300 in Shannon, including cabin crew operating on transatlantic routes.
Under the plan, workers would have the opportunity to move to an outsourcing service provider or to take a severance package.
Other proposals put to the board included putting the expansion of the airline's fleet on ice and paring back the number of aircraft operating on long-haul routes to the US from nine to eight. Aer Lingus is also believed to be seeking a deal with Shannon airport to cut passenger charges for its transatlantic routes.
With the board not due to meet for another fortnight, the failure to make a decision yesterday would appear to scupper plans management had to put the cost-cutting plan to staff by the end of the month.
A spokesman for the airline said the proposals remained "under review" and that it was possible the board could discuss them again before the next scheduled meeting.
It is understood that a number of board members pressed for the airline to use the third-party mediation services available through the State's industrial relations machinery to negotiate a deal with trade unions at Aer Lingus. Management is seeking to negotiate internally with unions and avoid the talks getting bogged down in the Labour Relations Commission or any other outside forum.
Aer Lingus has not commented publicly on media reports about outsourcing. However, in a letter to Siptu, replying to specific queries about these reports, the airline did not state they were inaccurate.
In his letter to Siptu president Jack O'Connor, Mr Mannion said that all "potential solutions" to the airline's current economic difficulties were under review. He said that he could not rule out any eventuality.
Mr Mannion said that even following the recent reduction in fuel costs, Aer Lingus would still face "significant losses" next year.
The airline had earlier forecast that if the high fuel prices reached during the summer continued and if no action was taken on costs, its losses could hit €100 million.
Mr Mannion said that it had been explained to staff representatives several weeks ago that a "root and branch review of our cost base" was being conducted on all aspects of the business, including the number of aircraft it operated, bases, routes and unit staff costs and productivity.
Mr O'Connor has warned that if outsourcing plans at Aer Lingus, along the lines suggested in the media reports, were to materialise they would effectively "torpedo" the new national pay deal.
Siptu is to hold a special conference and a ballot on the new agreement and it is understood there are concerns in the union that any such Aer Lingus proposals could sway members to vote against the deal.