Aer Lingus plans to cut nearly 700 jobs in bid to save £88m

Published on Tuesday 9 March 2010 20:17

IRISH airline Aer Lingus last night unveiled plans to lay off 670 workers as it aims to save about 97 million (£88m) in a radical restructuring plan.

Cabin crew who rejected a cost-saving proposal face 230 compulsory redundancies while four unions of pilots, maintenance, craft and administration staff will see 440 voluntary job cuts.

The announcement came after the carrier revealed that its operating losses had widened from 20m in 2008 to 81m last year, despite passenger numbers rising by 4 per cent to 10.4 million.

The carrier was in the red by 93m for the first half of last year but recorded an operating profit of 12m for the final six months.

Total revenue for the year fell by 11 per cent to 1.2 billion as ancillary revenues – fees charged for services such as checking bags – helped cushion reduced passenger fares and cargo revenues.

The publication of the unaudited trading update comes hours after Aer Lingus craft workers joined pilots and administration staff in backing the airline's radical cost-cutting drive.

Aer Lingus had been due to publish its full results for the year but postponed the announcement after the outcome of the ballot was delayed.

The airline – which has fended off two hostile bids by rival Ryanair, led by chief executive Michael O'Leary – had previously warned that it would have be forced to make 1,100 lay-offs if the restructuring plan, hammered out in several months of talks with unions, had not been accepted.

It had also warned that routes would have been scaled back if the deal brokered at the Labour Relations Commission had failed.

Ryanair, the Irish government and Aer Lingus employees control 70 per cent of the airline's shares between them.