Aer Lingus to shed 1,300 in €100m savings plan
By Louise McBride
Sunday September 14 2008
AER Lingus is set to pull the plug on all 1,300 ground staff working in Irish airports in a dramatic bid for survival.
The Sunday Independent has learned that the airline, which is under pressure to save €100m in costs, is in talks to outsource all ground staff in Dublin, Cork and Shannon airports.
Aer Lingus baggage handlers and catering staff will not be the only ones affected -- the airline is also planning to outsource its check-in staff, as well as loaders and staff working in the cargo terminal.
The move, which is part of the airline's cost cutting review, is expected to be announced at the end of this month. It would mean the airline would no longer directly employ ground staff in Irish airports.
The rising cost of fuel - where oil prices almost doubled in price over the last year -- has played havoc with airlines across Europe and Aer Lingus is no exception. Stockbrokers believe the airline could lose between €25m and €40m this year, and as much as €90m next year.
The outsourcing talks are being held with a number of suppliers, including Servisair, which offers ground handling services at over 140 airports worldwide. Although the exact details of the outsourcing deal have still to be ironed out, this paper understands that the airline is unlikely to backtrack on its move. Sources close to the talks believe the outsourcing will kick in in early 2009. It is likely that Aer Lingus staff will be given the option to transfer to the new supplier or leave the airline with a severance package, although these details also need to be finalised.
Earlier this month, the chief executive of Aer Lingus, Dermot Mannion, warned that fundamental changes were needed to prevent a €100m operating loss in 2009. It costs Aer Lingus about €80 a seat to carry passengers on short-haul flights, compared to €60 for Easyjet and €40 for Ryanair.
Last Friday, thousands of Irish holidaymakers were left stranded after the British tour operator, XL Leisure Group, went bust. The operator blamed the credit crunch and rising oil prices for its woes.
(The Indipendent)
By Louise McBride
Sunday September 14 2008
AER Lingus is set to pull the plug on all 1,300 ground staff working in Irish airports in a dramatic bid for survival.
The Sunday Independent has learned that the airline, which is under pressure to save €100m in costs, is in talks to outsource all ground staff in Dublin, Cork and Shannon airports.
Aer Lingus baggage handlers and catering staff will not be the only ones affected -- the airline is also planning to outsource its check-in staff, as well as loaders and staff working in the cargo terminal.
The move, which is part of the airline's cost cutting review, is expected to be announced at the end of this month. It would mean the airline would no longer directly employ ground staff in Irish airports.
The rising cost of fuel - where oil prices almost doubled in price over the last year -- has played havoc with airlines across Europe and Aer Lingus is no exception. Stockbrokers believe the airline could lose between €25m and €40m this year, and as much as €90m next year.
The outsourcing talks are being held with a number of suppliers, including Servisair, which offers ground handling services at over 140 airports worldwide. Although the exact details of the outsourcing deal have still to be ironed out, this paper understands that the airline is unlikely to backtrack on its move. Sources close to the talks believe the outsourcing will kick in in early 2009. It is likely that Aer Lingus staff will be given the option to transfer to the new supplier or leave the airline with a severance package, although these details also need to be finalised.
Earlier this month, the chief executive of Aer Lingus, Dermot Mannion, warned that fundamental changes were needed to prevent a €100m operating loss in 2009. It costs Aer Lingus about €80 a seat to carry passengers on short-haul flights, compared to €60 for Easyjet and €40 for Ryanair.
Last Friday, thousands of Irish holidaymakers were left stranded after the British tour operator, XL Leisure Group, went bust. The operator blamed the credit crunch and rising oil prices for its woes.
(The Indipendent)
