Aer Lingus to continue talks with unions on job cuts

Aer Lingus will continue talks with workers this week on cutting up to 500 jobs across the airline’s head office, cabin crews and pilots.The airline announced plans to save cash this summer, including reducing jobs, seeking savings from suppliers and dropping or cutting back on routes that are not delivering expected returns.Management will meet union officials this week to continue talks on head office cuts, where Aer Lingus could reduce overall numbers by 290.It emerged last week that the company would offer office staff five weeks’ pay for every year of service, up to a maximum of 104 weeks, with payments capped at €180,000. The deal includes workers’ statutory entitlements.READ MOREAer Lingus aims to boost margins from around 11 per cent last year to between 12 and 15 per cent, a target set by owner International Airlines Group (IAG).In short, the company must earn €112 to €115 for every €100 it spends. Last year it earned €111.10.Aer Lingus believes it will be profitable this year despite losing €34 million in the first six months, but it will not reach the IAG target.Trade unions representing Aer Lingus workers, including Siptu, Fórsa and the Irish Air Line Pilots’ Association, argue that the airline is profitable and that the 11 per cent return earned last year puts it ahead of many European carriers.When Aer Lingus management announced the plan, they noted that the Irish business had to meet the goal to ensure it secured new aircraft in future from IAG, which requires all its airlines to reach the target to win investment.[ Aer Lingus to offer up to €180,000 redundancy to office staffOpens in new window ]IAG pledged to investors in 2023 that the group would stick to the 12 to 15 per cent target. Aer Lingus’ owner did this to reassure the market that it would avoid up and down profits often returned by airlines.This makes some investors reluctant to buy their shares. Since making the commitment, IAG’s stock price has climbed 230 per cent.The group’s other carriers met the target. Its best performer, Iberia, returned 16.2 per cent last year and 13.6 per cent in 2024. BA returned 15.2 per cent last year and Spanish low-cost carrier Vueling returned 12 per cent.Aer Lingus is also seeking savings from suppliers, including maintenance and engine overhaul. As IAG procures this for its subsidiaries, the Irish airline wants its parent’s support in cutting those costs.It also faces increased competition. Since 2019, Ryanair has increased capacity here by 39 per cent. Meanwhile, US airlines have increased their seats by 50 per cent.Increased North American competition means Aer Lingus’ traditionally more lucrative routes, to cities including New York, Boston and San Francisco, are not as profitable as in the past. However, “secondary destinations” such as Philadelphia and Hartford, Connecticut, are starting to compensate for that.[ Something big happened to the ‘most important price in the world’ this weekOpens in new window ]There is also pressure due to a 73 per cent rise in fuel costs. Despite that, IAG’s other carriers are expected to meet the group’s targets. The pressure on Aer Lingus to do the same has prompted some commentators to argue that IAG’s takeover in 2015 was a bad idea.However, the Aer Lingus fleet has increased to 64 aircraft from 49 since then, an investment of €1 billion by IAG. Transatlantic passenger numbers have almost doubled, with 2.9 million last year, up from 1.5 million in 2015.