Job losses at Aer Lingus could near 600 as the Irish airline continues to grapple with Covid-19 travel restrictions, says chief executive Donal Moriarty.
Speaking after the carrier reported that pandemic travel restrictions left it with a €563 million loss last year, Mr Moriarty indicated that it was discussing voluntary redundancy with 250 workers.
Two thirds of those involved are among 500 who opted to leave last year. On that basis, he confirmed that the final number of job cuts at the airline was likely to be between 500 and 600.
Aer Lingus said staff reductions would be 500 when it announced restructuring plans last year.
“We actually have 1,000 fewer employees than would have been the case had the crisis not happened,” Mr Moriarty said.
He explained that this total included those leaving Aer Lingus and people who would have joined the business.
Mr Moriarty urged the Government to work with aviation to restart air travel as quickly as is possible, saying that should involve plans for vaccination verification and airport testing.
In a statement, Aer Lingus warned that aviation planning needed long lead times, so a Covid-19 exit strategy was critical to restoring the Republic’s air links to aid economic recovery.
“Government should engage proactively with all the relevant stakeholders to ensure that this plan is put in place,” said the airline.
Transport chiefs recently voiced frustration at Government's lack of plans to exit the crisis when they met the board of tourist body, Fáilte Ireland.
Meanwhile, Aer Lingus is continuing with proposals to begin flying from Manchester to Boston, Florida and New York.
"We are working through two regulatory processes in the UK with the Civil Aviation Authority and in the US with the Department of Transportation," Mr Moriarty said. "We hope to launch those services later in the year."
Results for Aer Lingus, part of International Airlines Group (IAG), show revenues tumbled 78 per cent in 2020 to €467 million from €2.13 billion the previous year.
Aer Lingus’s €563 million loss included a record €361 million shed by its operations before accounting for once-off charges. It earned profits of more than €270 million in 2019.
Cargo revenues grew 63 per cent to €88 million. This left sales to passengers trailing by €1.68 billion or 82 per cent at €379 million.
Non-essential travel
IAG’s accounts note that the Government’s advice against non-essential travel hit Aer Lingus’s European business particularly.
The Irish carrier cut spending last year by more than €800 million, including reducing staff costs by €188 million to €217 million.
Aer Lingus borrowed €150 million from the Ireland Strategic Investment Fund to aid it through the crisis, drawing down €75 million of this in December.
The loan’s terms restrict transfers of cash from Aer Lingus to its parent or other group companies. IAG itself loaned €50 million to the Irish airline.
IAG, which also owns British Airways, Iberia and Vueling, lost €6.9 billion after tax in 2020, compared to a profit of €1.7 billion the previous year. The loss is the worst in the group's 10-year history.
Group revenues fell 75 per cent to €5.5 billion last year from €22.47 billion in 2019. The group had €10.3 billion in available cash on December 31st.
Chief executive Luis Gallego said the figures reflected Covid-19's impact on IAG's business.
Mr Gallego pledged that IAG would continue to back Aer Lingus’s long-term growth and its plans to develop its Dublin Airport base as a transatlantic hub. He noted that the airline gave the best return on investment of all group carriers.
“As things come back in place, we would expect to continue with the development of the Dublin hub,” he said.
