BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Wednesday, 31 October, 2001, 17:08 GMT
Irish airline unions attack government
Aer Lingus Boeing 737 300
Aer Lingus plans to sell two 737s to meet redundancy costs
Union leaders at Aer Lingus have called on Irish prime minister Bertie Ahern to make a stronger case to the EU to allow state aid for the stricken carrier.

US airlines have received aid which has placed Aer Lingus at a competitive disadvantage, given its reliance on the US market

John McDonell, SIPTU union

Aer Lingus is losing two million Irish pounds (1.56m) a day.

The state-owned airline has already announced plans to lay off 2,000 people and cut its flight operations by 25%.

But a state bail-out has been ruled out by the European Union, despite persistent lobbying from the Irish government.

EU rules prevent governments from subsidising companies they own, on competition grounds.

Help needed now

The Irish government said last week it was seeking a buyer for 35% of the company.

Irish Prime Minister Bertie Ahern
Ahern: under pressure
But without immediate help, unions warn, Aer Lingus will collapse.

Union officials will meet Aer Lingus chief executive Willie Walsh on Thursday to be briefed on the job cuts plan.

The airline is reportedly planning to sell two Boeing 737 jets to cover 40m redundancy costs.

Unions are concerned that sacked employees will be short-changed by the company, which had previously indicated it could not afford the redundancy bill.

More commitment

A delegation of union leaders is also due to meet Mr Ahern on Wednesday evening.

The union bosses are expected to call for greater commitment to saving the airline, which employs 6,300 people.

John McDonnell, general secretary of Ireland's largest union SIPTU, said: "We need to resolve this situation in the next couple of weeks if the airline is to continue in existence."

Mr McDonnell said private investment was unlikely while the question of redundancy payments was hanging over the airline.

Strategic importance

"US airlines have received aid which has placed Aer Lingus at a competitive disadvantage, given its reliance on the US market," Mr McDonnell added.

He also stressed Aer Lingus' strategic importance to Ireland.

Aer Lingus relies heavily on transatlantic business but was already suffering a downturn in business before 11 September.

It has been locked in a fierce price war with low-cost rival Ryanair on European routes.

The Aer Lingus board is due to meet on Thursday.

The BBC's Elliott Gotkine
"The struggling Irish national airline... wants to shed nearly a third of its workforce"
See also:

10 Oct 01 | Business
Gloves off in Irish airline wars
29 Oct 01 | Business
Aer Lingus rescue efforts continue
16 Oct 01 | Business
Aer Lingus survival in doubt
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories