The crisis at Aer Lingus has deepened following a double whammy of bad news – the finance director has resigned, and talks with pilots over pay cuts have broken down.

Sean Coyle will leave at the end of the month and will resign from the company’s board.

His departure reflects wide unrest within the Irish flag carrier, which has set up a taskforce to manage compulsory redundancies and a fleet reduction after staff rejected a voluntary scheme.

Colm Barrington, the company’s chairman, said: “Sean has made a significant contribution to Aer Lingus since joining the airline in August 2008, particularly within the context of the transformation plan. We wish him well in his future career.”

Negotiations between the airline and its pilots stalled again yesterday over the failure to agree cost savings. The pilots had proposed a package that would have saved €33 million a year, and would have included pay cuts and a reduction in pilot numbers of up to 15 per cent. But the airline is seeking even more stringent cuts.

The news follows threats by Aer Lingus last week to shift its operations from Dublin to Gatwick and Belfast. The move would also result in hundreds of further compulsory redundancies at the struggling carrier.

Christoph Mueller, the new Aer Lingus chief executive, said that job losses of 676 announced October would reach more than 1,000 because of the failure of Irish Air Line Pilots’ Association to agree to cuts, as well as cabin crew refusing to accept wage cuts for those on more than €35,000.

Mueller also warned that if Aer Lingus is not able to address its financial difficulties, the airline may be forced into a merger with Ryanair, which it has fended off take-over bids twice before.

Mr Mueller said: “If Aer Lingus isn’t capable of mastering its own destiny, then, of course, the likelihood that some form of non-independence might occur is more likely.”