Sunday January 17 2010
AFTER apparently going right to the brink, the
Aer Lingus pilots blinked at the last minute. By voting to accept a 10 per cent pay cut and 76 redundancies, they have kept the airline flying, at least for the time being.
Finally, three months after it was unveiled, it looks as if
CEO Christoph Mueller's restructuring plan, which will shave €97m off Aer Lingus's annual costs and shed 675 jobs, will be implemented.
Last week the Aer Lingus pilots voted to accept pay and job cuts. While they have yet to agree to the pension changes and outsourcing contained in the Mueller plan, that's just posturing. Having looked into the abyss and decided that they didn't like what they saw, any future strike threats by the pilots would ring very hollow.
The bad news is that, with Aer Lingus's cash reserves likely to have hit €280m at the end of 2009, down from €757m two years earlier, the Mueller package was the bare minimum needed to keep it flying.
All around the world, former flag carriers are feeling the pinch. Last week
Japan Airlines had to be bailed out.
Unfortunately, Aer Lingus can't rely on such a bailout. It's hard to see Aer Lingus surviving as an independent company beyond the very short term.
Sunday Independent