Aer Lingus raises hackles with restructuring plan - Airport Hotels,Flights Airport News

Airport news for Airport Hotels,Flights on 08/10/2009.

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Aer Lingus has announced a "transformational" restructuring plan that already has labour unions threatening staunch protests. On Wednesday, just hours after British Airways announced redundancies to the tune of 1,700 jobs, the loss-making Irish airline announced its dramatic restructuring plan aimed at saving €97 million.

Aer Lingus has been finding it hard to stay competitive against rival budget airlines such as Ryanair. This year, the company faces losses of up to up to €150 million, and more losses have been anticipated for 2010. With its own chief executive saying the airline has only a 50-50 chance of survival, Aer Lingus has proposed a two-tier plan to help it cut costs and stem losses.

The first part of the plan will see at least 15% of its workforce become redundant. Aer Lingus will make significant cuts in its flight schedule, which it says will make around 489 jobs redundant. An additional 187 redundancies will be created by making changes in other business operations. Aer Lingus has said it hopes that many of these redundancies will be voluntary. However, if targets are not met, the airline could make compulsory job cuts.

The airline has also announced plans to increase its operational base in Britain. It wants to operate more hubs than its current bases at Belfast and London's Heathrow and Gatwick. This, the airline says, will help it be less reliant on an exclusively Irish customer base. The airline has also said that if staff and pilots refuse to get on board with the new restructuring plans, it may consider moving its operational base from Ireland into Britain.

Meanwhile Ryanair, which owns a 29% majority stake in Aer Lingus, has called upon the Irish airline to stop providing what it deems "inappropriate" free flights to former board members and directors. Ryanair says that it is unjustifiable for Aer Lingus to provide these freebies when airline is losing money.

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