Pay deal tempts airline staff to land flotation

AER Lingus has offered its employees a package of incentives, including a pay rise, in a bid to placate unions and ease the way for a planned flotation later this year.

Unions at the Irish state airline say the partial sell-off, expected to take place in September, threatens the job security of its members and are unhappy that a 250 million euro (173m) pension deficit remains outstanding.

The package proposed by management includes a three per cent pay rise for the 3500-strong workforce - on top of increases under a national pay deal agreed last month - and lump sum payments of up to 4000 euros (2760) depending on length of service.

In a bid to tackle the pension deficit the airline is proposing to set up new funds and ask employees to hike their pension contribution by two per cent.

Aer Lingus has also agreed to put 7.5 per cent of its profits each year into the Employee Share Ownership Trust to buy shares.

However, Michael Halpenny, national industrial secretary of the Services, Industrial, Professional and Technical Union - whose members account for around half of Aer Lingus' workforce - said the deal left a number of matters unresolved.

"It doesn't go far enough," he said.

"And there are issues there being presented as being tied up which are far from it."