Aer Lingus will seek shareholder approval for plans to address the €750 million hole in the pension scheme jointly operated by it and the Dublin Airport Authority (DAA) at an extraordinary general meeting next December.
The company has been in dispute with employees for over four years over the shortfall in the insolvent Irish Airlines’ Superannuation Scheme (IASS).
The proposed solution, which includes a once-off payment €191 million from Aer Lingus and €72 million from DAA to new defined contribution pension plans for active and deferred IASS members, will be put to a vote at an extraordinary general meeting of shareholders next month.
A ballot of Aer Lingus unions resulted in a 70 per cent vote in favour of the pension deal. DAA unions plan to begin balloting workers in coming weeks on proposals to end the deadlock.
“The board of Aer Lingus views the issues arising from the IASS funding deficit as representing a real and significant risk to the success of the company and considers that the proposed solution delivers benefits for all stakeholders,” the company said in a statement to the stock exchange this morning.
It said the proposals substantially reduce industrial relations risk faced by Aer Lingus and provide clarity as to the likely total financial and legal impact of resolving funding issues.
The airline said it would also put future pension provision for employees of Aer Lingus on a sustainable footing as well as stabilise certain future staff costs over a multi-year period.
Aer Lingus chairman Colm Barrington said: "Following four years of complex, multi-party negotiation, we are pleased today to issue a circular to shareholders which outlines the proposed solution to address the issues arising from the deficit within the IASS."
“As previously outlined, we believe that this solution, which represents a compromise by all parties, is the only solution which is capable of being implemented.”
