THE MINISTER for Transport Noel Dempsey has no plans to intervene in the standoff between Aer Lingus and Siptu that could lead to industrial action at the airline in the run-up to Christmas.
A spokeswoman for the Minister said he had encouraged both sides to use the “full industrial relations apparatus” of the State to resolve their differences over plans to outsource 1,245 ground operations staff at Dublin, Cork and Shannon airports. “He will continue to do so,” she added.
An all-out strike by Siptu workers could paralyse Aer Lingus’s operations and cost the airline €3 – €4 million a day in lost revenue, although it would save money by not operating its fleet.
However, it is understood that the likely financial losses incurred by Aer Lingus if it is forced to ground its aircraft due to strike action would be no more than the losses the airline is currently budgeting to incur in December, January and February due to weakening consumer demand.
It is understood that the airline expects to make a loss of about €15 million a month over the winter period due to recessionary pressures that are affecting its average fares.
In addition, the airline has hedged its fuel at about $116 a barrel, about 50 per cent more than the current spot price of oil.
By outsourcing these jobs, Aer Lingus expects to save about €117 million in payroll costs, although it will pay about €67 million by moving these functions to a third party.
This would give it a net saving of €50 million.
The threat of strike action followed a decision by Aer Lingus management to quit a consultation process with Siptu on Wednesday and to inform the union that it planned to select preferred outsourcing suppliers next week.
It also intends to reveal the terms of a voluntary severance package for workers in its catering, cargo, cleaning and loading operations.
This is part of a wide-ranging plan by the airline to save €74 million in costs to help return it to profitability.
Siptu has threatened industrial action and a ballot of members will close on November 7th.
Any decision to strike would require two weeks notice to the airline and threaten Aer Lingus’s operations in December.
Enda Corneille, corporate affairs director with the company, said it would seek to keep its passengers informed about any possible disruption to future services.
“We are going to do everything we possibly can to make sure our operations continue,” he said.
Siptu’s shop stewards are due to meet at Dublin airport this afternoon to consider their next course of action.
Aer Lingus’s board is due to hold its next meeting on November 7th. It is understood that board members have been appraised of the latest developments.
Siptu yesterday accused the airline of “going through the motions” in relation to the four-week consultation process, which was chaired by Kevin Foley of the Labour Relations Commission.
Siptu highlighted how Aer Lingus had made aggregate profits of more than €275 million over the past decade and had €802 million in cash on its balance sheet.
The union said its members had increased productivity by 340 per cent over the past 10 years and had helped reduce costs at Aer Lingus by 23 per cent during that period.
Siptu said it remains available to meet for talks with management, but none are planned.
It is understood that parallel talks being held with Impact and Siptu in relation to cost-saving measures affecting cabin crew are continuing.
One source said these talks had been “constructive” and proposals are expected to emerge next week. Aer Lingus wants to trim €15 million from the costs of its near 1,400 cabin crew staff.
