Page last updated at 07:36 GMT, Wednesday, 7 October 2009 08:36 UK

Aer Lingus to cut almost 800 jobs

Aer Lingus
Aer Lingus has been hit hard by the downturn in global travel

Irish airline Aer Lingus said it would cut almost 800 jobs as it tried to save 97m euros a year ($143m; £90m) by 2011.

Fewer flights, new working methods and new IT systems will see 676 jobs go, in addition to 100 staff who have already been told their contracts will end.

Under the proposals higher-paid staff will see their basic salaries reduced, and all employees will see falls in the allowances they receive.

The airline has suffered amid falling fares and higher fuel costs.

The company lost 73.9m euros in the six months to the end of June, more than three times the 21.6m euros it lost a year earlier.

Revenue fell to 555m euros, down 12.2% on the 632m it made a year ago.

On Tuesday, British Airways said it would cut 1,700 jobs and freeze pay.

'Poor outlook'

The bulk of its Aer Lingus' cull of flights would be on long-haul routes, it said. Overall passenger numbers rose 4.1% year-on-year in September, but that included a 20.4% decrease in long-haul numbers.

Airline charges table promo
Aer Lingus charges up to £36 to check in a bag for a flight and up to £20 to choose a specific seat

The airline's chief executive Christoph Mueller, said that the outlook in its core markets was "poor" with no near-term recovery expected.

"Against this backdrop, Aer Lingus cannot continue with an operating cost base, which is structurally uncompetitive when compared to that of its closest peers," he said.

"Our plan to reduce our operating cost base and change work practices will secure Aer Lingus' future as a viable and strong airline that can prosper in one of the most competitive travel markets in the world."

Staff whose basic pay is above 35,000 euros would see "banded reductions" in pay, under the proposals.

Executive and management teams have agreed to take a 10% cut in their salaries which will be frozen until the end of 2011. Non-executive directors will see a 10% reduction in their fees on top of the 20% cut taken earlier this year.

Aer Lingus is facing a large deficit in its pension schemes, and the carrier said it was in talks with its trustees about introducing a new scheme.

The Impact trade union, which represents hundreds of Aer Lingus cabin crew and pilots, said the proposals were as severe as expected, and that it would consider the contents.

Shares in the airline were up by 16% in early trading.

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