Aer Lingus is being forced to make further job cuts as well as suspend routes and aircraft following a breakdown in talks between management and crew.
In October, the new chief executive, Christoph Mueller, outlined plans for cuts that would include 676 jobs from the workforce of nearly 4,000.
The airline was hoping to reach an agreement with pilots and cabin crew on these proposals, but talks became stuck over pilot demands for a relatively high compensation package compared to rivals.
Chief executive Christoph Mueller said in a statement released last night (December 1):
“Aer Lingus and all of its employees have not reached agreement in respect of all aspects of the proposed Transformation Plan.
“The Board and Management will now move to reduce capacity, further eliminating routes which are loss making as a result of our high cost base.
“This will result in the operation of fewer aircraft, which in turn will lead to additional redundancies beyond those included in the Transformation Plan.
“It is very likely that these redundancies will commence immediately and will be compulsory.”
The board will meet again on Friday to try and reach an agreement.
Aer Lingus made €80m in losses in the first half of the year on revenues of €555m – 10% less than the same period in 2008.
Capacity reductions have increased load factors, and the pace of decline in revenues has eased.
At the end of September, it had cash reserves of about $600m, some 39% lower than last December, which has concerned industry analysts.
The airline’s transatlantic market, flying from London and Dublin to US cities such as Boston, New York, Chicago and San Francisco, has been struggling.