AER LINGUS directors have agreed to take a voluntary 20 per cent cut in their annual fees in recognition of the current downturn in the economy and the company-wide drive to cut more than €50 million from its cost base.

The move will save the airline €152,000 a year in fees paid to its 14 board members. The cut takes effect immediately.

Aer Lingus board members will now receive €36,000 a year in fees compared with their previous payment of €45,000.

This includes chief executive Dermot Mannion and chief financial officer Seán Coyle, who both receive these fees as part of their overall remuneration.

Chairman Colm Barrington will experience the biggest reduction in his remuneration from Aer Lingus.

His fee will be reduced by €35,000 to €140,000.

A spokesman for Aer Lingus said the move was taken by the board “in recognition of the current difficult economic environment”.

It is understood that the pay of Aer Lingus’s top executives will not be reduced.

The executives are currently on their third pay freeze since 2002. Bonus payments are also set to be dramatically reduced this year.

The move follows considerable controversy last month over so-called golden parachute payments to Mr Mannion and Mr Coyle and a number of senior executives that could have resulted in them getting twice their remuneration in the event of Aer Lingus being acquired and the executives leaving the company.

These deals were agreed last October and signed off by John Sharman just before he stepped down as chairman of Aer Lingus.

It sparked a furious reaction from Minister for Transport Noel Dempsey and senior trade union leader and Aer Lingus director David Begg. The contracts were signed at a time when the airline was seeking to cut hundreds of jobs and slash pay rates to workers.

Mr Mannion and his fellow executives subsequently agreed to surrender the clauses in their contracts.

Aer Lingus has been heavily criticised in recent times by Ryanair, its biggest shareholder, for the level of fees paid to its directors.

Ryanair chief executive Michael O’Leary last month revealed that his pay and that of other executives at the airline has been cut by 10 per cent this year and bonuses reduced by 50 per cent due to declining profits.

Ryanair also asked 400 pilots and cabin crew to take a week of unpaid leave.

The move comes in the same week as the Government moved to save €2 billion in expenditure, primarily by requiring public servants to make increased pension contributions.

A number of private-sector companies have also instituted pay cuts among executives and workers.