Airline executive warns staff to back down on pay demands, or potentially lose new Airbus airframes.
Aer Lingus chief operating officer Mike Rutter is reportedly giving his employees an ultimatum: Either skip pay increases, or forego eight new aircraft coming to the airline. Ireland’s The Independent reports the IAG carrier is telling employees they could lose the new aircraft to another low-cost carrier in the corporate family, Level.
Originally, Aer Lingus was set to receive the new aircraft, which would increase their capacity to 4.5 million passengers annually and create 800 new jobs in three years. However, executives for the Irish carrier are now concerned they could lose the aircraft to Level, a low-cost subsidiary of their parent company based out of Barcelona. The reason: “unreasonable pay requests” that make the carrier “structurally unsustainable.”
“If Aer Lingus is unable to remain competitive in the medium term, then as a rational parent company IAG has the ability to move these aircraft to launch new routes and grow the networks of other IAG companies, of which Level would be most relevant in this context,” Rutter told The Independent. “Lingus remains committed to its current resourcing model providing that we can maintain cost competitiveness and improve productivity.”
While labor courts in Ireland recommended an 8.75 percent raise for staff over three years, union leaders have prevented workers from accepting deals short of their 19.1 percent goal. According to the paper, the unions are fighting with Aer Lingus over increased pay and profit sharing.
As the carrier continues to fight over payment, the airline says that they are investigating other options to remain financially stable and win the $1.19 billion in aircraft. This includes setting up an aircraft operating company to circumvent some labor regulations, similar to Norwegian Air.