Aer Lingus faces a bill of at least €55 million from the industrial action around their pilots’ pay row that ended last month with the airline agreeing to boost their pay by 17.75 per cent.
The carrier on Thursday blamed the dispute and tougher competition on North American routes for a €29 million fall in operating profit to €92 million over the three months to the end of June, compared with the same period last year. Profit for the first six months of 2024 slipped €31 million to €9 million.
“The industrial action will have an expected €55 million direct financial cost to the business over quarter two and quarter three, before including the impact on forward bookings,” it confirmed.
Aer Lingus added that it was weighing the cost of the dispute in light of current competition in the sector and the 32 million a year passenger limit imposed by planners on Dublin Airport.
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
One in four PAYE workers are overpaying tax. Can you claim money you’re owed?
“This will include a review of the weaker parts of the airline’s network and its cost base,” said a statement.
Lynn Embleton, Aer Lingus chief executive, cautioned that the review would not just be limited to Dublin, but would extend to regional airports including Cork and Shannon.
She pointed out that, unlike Dublin, these gateways did not offer connections between long and short-haul flights. “This makes growth out of those airports more difficult,” Ms Embleton added.
Aer Lingus said North American airlines had boosted seat numbers on routes in Dublin by 20 per cent this summer, putting pressure on the profits that the Irish carrier earned from transatlantic flights.
The company said while this was most obvious in the sale of economy seats, business class revenues continued to perform well.
Meanwhile, Luis Gallego, chief executive of Aer Lingus’ owner, International Airlines Group (IAG), confirmed that the Irish company was back in the running for new Airbus jets that cut the cost of long-haul flying.
IAG, which also owns British Airways and Spanish carriers, Iberia and Vueling, allocated two A321 XLRs (extra long range) aircraft originally earmarked for Aer Lingus to Iberia earlier this year as the row with pilots gathered momentum.
The deal recommended by the Labour Court and agreed by both sides last month caps pay for flying “narrow-body” aircraft, which includes the A321 XLR.
Mr Gallego agreed that this helped strengthen the case for allocating the remaining four available XLRs to Aer Lingus, but cautioned that it was not definite. He added that IAG would decide “later this year”.
Aer Lingus published its figures as it emerged the increase in pay agreed with pilots has prompted cabin and ground crew unions to seek a meeting with the airline.
Fórsa, which represents cabin crew, and Siptu, Unite and Connect, which represent staff on the ground, met on Thursday under the auspices of the Irish Congress of Trade Unions (Ictu) to discuss the deal’s implications for members.
They agreed a 12.25 per cent pay deal for members with Aer Lingus last year, but can revisit this if the airline awards greater increases to other workers that are not tied to extra productivity.
Following Thursday’s talks, Ictu is writing to Aer Lingus seeking to meet the company in coming weeks to discuss the issue. Ms Embleton said Aer Lingus was happy to discuss changes that could result in more pay with its unions.
IAG also announced that it had ditched a deal to buy the 80 per cent of Air Europa that it does not already own from Globalia to which it is paying a €50 million break fee. “We believe this is the best interests of our shareholders,” said Mr Gallego.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
