AER Lingus pilots hake been awarded increases of approximately 7 per cent in an independent review of their salaries, bringing the top of the captain's scale to £77,500. The net cost of the award for the 270 pilots involved is estimated at more than £1 million.
However, this is significantly less than a previous award which the company refused to implement last summer. On that occasion it rejected an arbitrator's recommendation that would have given pilots increases of about 17 per cent and would have cost the company £5 million.
The pilots threatened to strike last September over the refusal of the company to honour the 17 per cent increase. Following the intervention of the Labour Court, they agreed to defer their strike only hours before it was due to start. The company agreed to pay an immediate 5 per cent increase and participate in a salary review by an "outside expert".
The expert agreed upon was Mr Phil Flynn, a former president of the Irish Congress of Trade Unions. Aer Lingus and the Irish Air Line Pilots' Association (IALPA) received copies of his report last Tuesday. Both sides were seeking clarifications on a number of points yesterday from Mr Flynn, and they are expected to meet today to discuss his findings.
IALPA will hold a mass meeting tomorrow, when it will explain the proposals before putting them to a ballot. The negotiators have still to decide if they will recommend acceptance.
Some IALPA members will be disappointed by Mr Flynn's report, which effectively offers them increases of 12 per cent rather than the 17 per cent they were seeking. But it is significantly more than the company had been willing to concede.
Aer Lingus can take comfort from the proposed radical restructuring of pilots' salary scales that will minimise the impact of the increases on the overall company budget. More importantly, the new pay scales will make it easier for Aer Lingus to work out the exact cost of remuneration.
Mr Flynn has taken the complex system of allowances, worth an average of 20 per cent of pilots' basic pay, and consolidated them into a new basic pay structure. New sect oral allowances are proposed, based on productivity.
A novel method he proposes is an early retirement scheme for senior captains. He says that 53 captains in their mid-40s should take early retirement.
They would receive full pensions on retirement and, in the meantime, receive contracts worth over £70,000 a year to continue working for Aer Lingus. The pension fund is significantly over-funded at present and could take the strain, while the company would save significantly on employers' PRSI and further pension contributions.
The early-retirement package would also free up promotional posts for more junior pilots. Another attraction of the scheme is that pilots who obtained advanced flying licences would automatically progress, for the first time, to the top of their scale.
The new scale begins at £26,000 for co-pilots, compared with £20,5548 at the time of last year's dispute. The co-pilots' scale rises to £55,000 over 20 years.
Captains will earn from £43,800 to £77,500 over 28 years service with the company. In the past the top of the captain's scale was £65,000, including allowances, but the service scale was shorter at 25 years.