Aer Lingus may shed up to a quarter of its workforce as it retreats from key transatlantic routes in the wake of last week's terrorist attacks on New York and Washington. The State-owned airline is cutting back its operations by 25 per cent and mothballing seven planes.
The company was not prepared to say how many jobs would go in the restructuring, but up to 1,600 jobs are thought to be at risk. The airline is withdrawing from routes to Newark, Baltimore and Washington that were initiated last year. It will continue to fly to New York, Boston, Chicago and Los Angeles.
The Government is now under pressure to seek a relaxation of EU rules banning state aid to airlines to help Aer Lingus, which is looking at losses of £70 million.
IMPACT deputy general secretary Mr Shay Cody said the US government could not be allowed to move unilaterally to bolster its airlines while the EU tied itself to a non-interventionist policy. "Otherwise, when the crisis is over, the only airlines left standing will be American ones," he said.
The Minister for Public Enterprise, Ms O'Rourke, indicated last night the Government was open to such a move. Ms O'Rourke said there would clearly be an unfair advantage if US airlines were to receive assistance and those in the EU did not. "It is an issue I and the Government would be very willing to talk about," she added.
Up to 1,000 permanent employees of Aer Lingus and 700 temporary staff face redundancy as the airline begins talks this morning with its unions about reducing operating costs by at least 25 per cent. Seven of its 40 aircraft are to be disposed of and the year-old service between Dublin and Stockholm is also being axed along with the US routes.
Flights between Dublin and London City, and Dublin and Amsterdam are being scaled back from six to five a day. Flights between Dublin and Paris are being reduced from five to four a day and flights from Dublin to Glasgow are being cut from four to three a day.
Bookings on the airline's transatlantic routes are down by 75 per cent and bookings on other routes by 50 per cent, the company said yesterday. Estimated operating losses for this year have soared from £30 million to £70 million in the wake of the terrorist attacks. Temporary staff are expected to be laid off ahead of the introduction of the airline's winter schedule in October. Redundancies from permanent staff will also be sought.
The new business environment required "a more radical approach to the process in order to minimise the anticipated financial impact on the airline," said Mr Dan Loughrey, the director of corporate affairs at Aer Lingus. It was "imperative that Aer Lingus takes sensible and responsible decisions now to reflect the exceptionally difficult situation," he said.
The European Commission reiterated its position on state aid to airlines yesterday. Commission officials stressed that the issue of state aid to airlines was not on the agenda of this weekend's meeting of EU finance ministers in the Belgian city of Liege.
Belgium's finance minister, Mr Didier Reynders, hinted yesterday that, if the US moved to support its airlines, the EU might have to follow suit. But a Commission spokesman said that any discussion of such assistance was likely to be unhelpful. "We don't want to create a problem by talking about it," he said.
Some of the larger US commercial airlines are expected to file for bankruptcy within days unless they get up to $24 billion from federal funds. US Transport Secretary Mr Norman Mineta said yesterday that he would seek the approval of Congress for an aid package, which could be ready by early next week. If the European Union sticks to its current position on state aid then the package will have implications for the US airlines' European operations.
United Airlines, the second-largest US carrier, announced last night it is to shed 20,000 jobs. The company employs 200 people at a reservation centre in Dublin's East Point Business Park.