What is at issue here is any pay reductions or outsourcing of staff which does not address the estimated €300M - €600 needed to stabilise the pension plan.
Report written by a firm of Consultants so are they willing to disclose whether they are retained by anybody to write this. Consultants rarely do anything for free.
In effect even if EI stays independent then it cannot afford to continue in business with a potential liability longer term of this and there is no state aid.
EI Operating loss was €50m in first half and initially projected loss of another €20m in second half, probably worse given the passenger drop as a result of strike threats.
2009 is not going to get much better and even the €25m in cuts offers little as redundancy cost will exceed this figure by quite a margin and you have to hope that you can actually realise all the €25m in savings in the first year......i.e. no chance.
Assumming they are responsible for 50% of the pension deficit then they will have to come up with up to €300m maximum. All of this plus operating losses has to come out of cash as clearly not producing any operating profit.
In effect you have someone willing to negotiate a price or do you hold out for a bigger player.
Exactly what does EI offer up to the 3 big European groupings of AF/KLM - LH or BA/IB to warrant interest.
Slots at LHR ?.....nope as number is not sufficient to warrant minimum €1.5bn
(€1.5 made up of current market price offer valuation of company + pension deficit)
Access to US market.....hardly as all already part of alliance
Increased Pax numbers......not for that spend when losing that much money.