SIPTU members in Aer Lingus decided this evening to ballot for all out industrial action.National Industrial Secretary Gerry McCormack said "This is Irish Ferries Mark II. It represents a fire sale of good quality jobs by a management that can see no further than the next quarter's profit and loss sheet."
Aer Lingus set a deadline of 1 November for the implementation of a €74m cost-cutting programme involving up to 1,500 job cuts through redundancies and outsourcing. Up to 280 jobs will go at Shannon Airport as part of the plan. At a 2 1/2 hour meeting this afternoon, management told staff that €50m would have to be eliminated from staff costs.
They also said €14m would have to come from a reduction in advertising and distribution costs, airport costs and professional fees, and €10m from reducing the airline's long haul aircraft fleet from nine to eight.
There will be a voluntary severance or early retirement package on the same terms as in 2004 for cabin crew and ground staff in airports, catering and cargo divisions. Sick pay entitlements are to be reduced.
Contracts based on performance related pay will be introduced from January. Staff who do not take redundancy may transfer to a new service provider - but there will be no opportunity to redeploy within the airline.
15-month pay freeze for staff
Cabin crew bases at Shannon and Heathrow will be closed. Staff may be offered redeployment to Dublin or Cork or alternatively will face redundancy. Services from New York, Boston and San Francisco will be staffed with US based cabin crew from the summer of next year. The company will commence a programme to move head office to smaller more open plan facilities.
Earlier it emerged the airline was to impose a pay freeze until the end of 2009 under the cost cutting package. Staff are also to be given new contracts which will introduce performance related pay and abolish traditional increments. It is understood that the use of a US cabin crew on transatlantic flights has been proposed at the meeting.
The company has already reported losses of €22m for this year, and is forecasting potential losses of over €100m next year - depending on the cost of fuel. On Friday, the Aer Lingus board finally authorised management to proceed with what it described as a cost reduction programme to deliver substantial savings necessary to ensure the company's long-term viability as an independent airline.
The company also stressed that the cost savings must be delivered as a matter of urgency. It is also believed that the company is not prepared to engage in a lengthy negotiating process, and wants to commence implementation of cost cuts in 2009. However, unions are likely to highlight that staff have already made significant productivity concessions both in the Survival Plan of 2001 and in the recent cost-cutting programme agreed in the summer.
SIPTU has indicated that it is totally opposed to any outsourcing, which would predominantly affect its members.
