Dispute Could Cost Aer Lingus Airlines Over $500,000 A Day


  Bookmark and Share

Dispute Could Cost Aer Lingus Airlines Over $500,000 A Day

By Daniel Baxter

January 25, 2011 - The Irish Municipal, Public and Civil Trade Union (IMPACT) on Monday called on Aer Lingus management to come clean about how much it is spending on unnecessarily hiring aircraft and crews while it sends willing cabin crew home and leaves its own expensive assets lying idle.  

IMPACT is a trade union in the Republic of Ireland. It primarily organizes workers in education, health, local government and the civil service. It also has members who work for voluntary and community organizations, telecommunications and aviation. 

The union estimated that the cost could currently be running at over $500,000 a day, but said it could be much more if aircraft and crews were hired for transatlantic flights.

The union also said Aer Lingus had now hired outside staff to conduct disciplinary hearings against cabin crew, adding to the cost of the dispute. IMPACT said stakeholders - including staff, customers and shareholders - had a right to know how much money was being wasted, particularly when huge effort and sacrifice had been made to keep the airline afloat, including pay cuts and job losses. 

The union said mounting costs included the cost of hiring aircraft and crews, which the union estimates could be in the region of $50,000 for a European round trip and over $340,000 for a transatlantic round trip. The union believes at least ten aircraft per day are currently being hired. 

In addition the cost of refunds to passengers whose flights were cancelled when management sent willing staff home last week, the opportunity cost of idle Aer Lingus planes, which are expensive capital assets, the cost of hiring outside staff to conduct disciplinary hearings against cabin crew, the salary costs of pilots left idle because hired planes come fully crewed and the cost of running newspaper advertisments. 

An IMPACT spokesperson said staff and shareholders were paying a huge price for management?s misguided actions. ?By any standards, the cost of management?s actions are completely disproportionate to the issues that remain in dispute ? just 20 flying hours a year, or less than half an hour a week. We are challenging management to come clean and release verified figures on how much money it is wasting and the extent to which this will damage the bottom line when the next quarterly and annual figures are published.?


IMPACT has reported that cabin crew have been reporting for work but had been sent home by the company, causing flight disruption this week. ?Now, after cabin crew and other airline staff have worked so hard, and sacrificed so much, to make the airline a success in difficult times, the company is also wasting scarce resources to hire-in planes and crew when their own cabin crew are reporting for duty every day and expensive Air Lingus aircraft remain on the tarmac,? a spokesperson said.

Aer Lingus is the flag carrier of Ireland. It operates a fleet of Airbus aircraft serving Europe, North America and northern Africa. It is Ireland's oldest extant airline, and its second largest after low-cost rival Ryanair. The airline's head office is located on the grounds of Dublin Airport. 

On 1 Dec 2008, Ryanair launched a second takeover bid of Aer Lingus, making an all-cash offer of ?748 million (?619mil; US$950mil). The offer was a 28% premium on the value of Aer Lingus stock during the preceding 30 days. Ryanair said, "Aer Lingus, as a small, stand alone, regional airline has been marginalised and bypassed as most other EU flag carriers consolidate." The two airlines would operate separately and Ryanair claimed that they would double the Aer Lingus short haul fleet from 33 to 66 and create 1,000 new jobs.

The Aer Lingus Board rejected the offer and advised its shareholders to take no action. The offer was eventually rejected by all shareholders. It was the second failed attempt by Michael O'Leary to take over the national flag carrier. Ryanair initially left the offer open to Aer Lingus until they withdrew their bid on 30 January 2009.

The Irish Government slammed O'Leary's offer as "undervaluing the airline" and stated that a Ryanair takeover would have a "significant negative impact" on competition in the industry and on the Irish consumer. Ryanair has repeatedly stated that another bid is unlikely, but as of October 2010 it still had a stake in Aer Lingus, prompting an investigation by competition regulators in the UK.

Other News Stories


Home Aviation News Aviation Stories Of Interest FAA Exam Upcoming Events Links To Other Sites General Aviation Helicopters Medical Factors Facing Pilots
Maintenance and Aircraft Mechanics Hot Air Balloon Aviation Training Handbooks Read Online Aviation History Legal Issues In Aviation Sea Planes Editorials
 ?AvStop Online Magazine                                                                 Contact Us                                                  Return To News                                          Bookmark and Share


AvStop Aviation News and Resource Online Magazine

Grab this Headline Animator