THE BOARD of Aer Lingus has given the green light to plans by management to introduce sweeping cost-cutting measures at the loss-making airline.
Aer Lingus chief executive Dermot Mannion now plans to outline his proposals to the airline's trade union groups at meetings on Monday.
Sources close to the airline said management wanted to move "as a matter of urgency" to agree a package of measure to substantially reduce the company's cost base.
Siptu and Impact, the two largest union groups at Aer Lingus, declined to comment until after the meetings next week.
In a statement issued yesterday evening, Aer Lingus said its directors had agreed that its cost base required "fundamental change" for it to remain competitive.
"Given the extremely challenging revenue environment, the board is committed to delivering these cost savings as a matter of urgency, and management will meet with staff and their representatives next week to discuss the manner in which these cost savings will be achieved," the statement added.
This followed a board meeting at the airline's headquarters yesterday and comes just one week after a heated nine-hour gathering of the directors failed to rubberstamp management's cost-cutting proposals.
Some board members are believed to have opposed the cost-cutting plan at last week's meeting.
It is understood that some changes to the original proposals put to the board by Mr Mannion and his executive team were agreed with the directors yesterday, although the broad thrust of the original proposals was agreed upon.
The board has asked management to consult with staff and their trade unions, and to seek their views on what savings can be achieved.
Mr Mannion is widely reported to be seeking up to €100 million in cost cuts from its 4,600-strong workforce.
The Irish Times understands, however, that the figure is not that high.
The airline has proposed outsourcing about 1,500 jobs from its ground operations in Dublin, Cork and Shannon, and is also believed to be considering hiring crew from North America to staff its transatlantic flights.
Other savings are being sought, including a new deal on passenger charges at Shannon during the winter season.
Aer Lingus is also thought to be considering pulling the Shannon stopover from its Dublin to Chicago service.
In addition, the airline is revising plans to expand its fleet.
Aer Lingus is expected to post a loss of about €23 million this year. Management has suggested that next year's losses could hit €100 million if fuel prices remain high and the economic downturn continues to affect seat sales.
Earlier this week it emerged that the Government had directed its three nominees to the board - lawyer Francis Hackett, business consultant Chris Wall and economist Colin Hunt - to reconcile the commercial objectives of the airline with public policy.
Minister for Transport Noel Dempsey told the Dáil in a written answer on Wednesday that State nominees had been issued with a mandate to ensure that all future decisions of the company that have significant implications for wider Government aviation or regional development policies were first considered at board level.
