THERE ARE few companies in the State which have a prouder history than Aer Lingus. Founded in 1936, it epitomised for decades the best of Irish enterprise; resourceful, determined and successful.
It opened foreign travel for Irish people, albeit at ticket prices much higher than today's. But, more importantly, it provided a bridge to Ireland for valuable tourist traffic, especially from the United States. It was the darling of the semi-State sector and successful businessmen campaigned and connived to secure a seat on its board.
Not any more. This week, the largest trade union at the airline will start to ballot members for all-out industrial action over a cost-saving plan that has been described by the trade unions as "severe and draconian". It is an assessment with which even management would agree. The company wants cuts in staff numbers to generate savings of €50 million a year and other savings will reduce costs by a further €24 million. A total of 1,500 jobs will go either through outsourcing or redundancy.
This is a bitter pill for the employees to swallow, especially given their response to the reduced staff numbers which resulted from previous rationalisation. Staff are committed to the airline and want to contribute to its growth and development. They are not responsible for its decline into heavy losses with worse to come.
The difficulty facing Aer Lingus, however, is that the business model on which it operates will not and cannot bring it back into profit. The spike in oil prices when added to relentless pressure from lower-fare airlines has given rise to a situation where the company has to slash costs if it is to stay in business.
Trade unions argue that the unprofitability will be short term and that the plan is a panic reaction that might ruin the business. Unfortunately, there is no evidence to support the assertion that the company can leave things as they are in anticipation of an inevitable and significant improvement in trading. There is a risk though that such severe cuts could damage the business, a prospect that management and staff will have to work together to avoid.
Aer Lingus is playing hardball in advancing these proposals. They include outsourcing and compulsory redundancies and the company has warned it will not entertain any protracted negotiations. Management want prompt action mindful of the fact that previous talks dragged on for 18 months. Outsourcing has a negative image. Irish employees - as in Irish Ferries - are let go and replaced by foreign nationals who will work longer hours for less money. The trade unions, not surprisingly, are implacably opposed to it.
But if it is a fact that Aer Lingus cannot return to profit with the present level of staff costs and the terms and conditions that currently prevail, then this crisis must be addressed. The unions have been asked for their own suggestions and will strive to identify proposals which would reduce the scale of compulsory redundancies. Their proposals should be accorded all the seriousness and examination they deserve.