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Ireland’s Aer Lingus to slash hundreds of jobs, cut pay expand in uk to compete with Ryanair

By Caroline Mittermair for CEOWORLD Magazine Updated:October 7, 2009

Ireland’s Aer Lingus PLC (EIL1.DB) has announced plans to make nearly 700 job cuts as part of a bid to save almost 97 million euros (143 million dollars) a year by 2011. It also wants to cut wages and end the current defined-benefit pension scheme.

The Irish airline said it could not continue with its current operating costs and insisted the redundancies were essential to bring the firm into line with competitors.

Around 489 cuts are expected to be made from pilots, ground handling and cabin crew, with a further 187 redundancies from head office and support areas.

Unions are vowing to fight proposals from Aer Lingus to cut hundreds of jobs and slash wages.

“The job cuts seem to be extreme and draconian and an over reaction to the current difficult economic climate,” Siptu National Industrial Secretary Gerry McCormack said. “We cannot see any basis for pay cuts, job losses or changes to the pension scheme on behalf of Siptu members.”

Also Wednesday, a statement from the Impact trade union representing cabin crew and pilots said: “The proposals are as severe as we might have expected.” The trade union is taking a series of workshops with management this week over the cuts.

The cabin crew branch of Impact said: “That the proposal also contains such a significant number of cabin crew job losses, is, in our view, deeply unfair and devastating to our members.”

Aer Lingus’ new chief executive Christoph Mueller on Wednesday described the company’s outlook as “poor,” adding that no “near-term recovery” was 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,” added Mueller who began his reign as chief executive on October 1.

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Tagged with: Aer Lingus PLC, Gerry McCormack, Irish airline, Ryanair

john00

I don't know if it would be enough to save the company from Ryanair. Poor’s Aer Lingus employees are going to experience Ryanair's social model....