IMPACT has raised concerns about the likelihood of job losses at Aer Lingus if the third proposed offer, made this week by the International Airlines Group (IAG), is accepted. The union has said that job losses at the airline could be as high as 1,200 if IAG succeed in its bid, as the company would seek to drive a cost cutting programme to justify its proposed €1.3bn spend to acquire the former national carrier.
The Government owns a 25.1% stake in Aer Lingus, and has established an advisory group to consider the proposed offer. Extensive media coverage on Monday focussed on the concerns IMPACT has raised with the Minister for Transport, Tourism and Sport, Paschal Donohoe TD.
In a presentation to the Dail’s Transport Committee, IMPACT national secretary Matt Staunton said, “For the purpose of the takeover IAG would have to identify cost and revenue synergies which would justify their investment. One of the primary cost synergies arising would come from a reduction in the Aer Lingus employee headcount particularly in the ‘back office’ where there would be readily identifiable duplication with existing resources in London and, possibly, IAG’s base in Madrid (Iberia). This is also true of some maintenance functions, given the substantial IAG maintenance facilities in London and Madrid.
"Executive and senior decision making would transfer to London, with perhaps a token executive presence in Dublin. Following the IAG takeover of Iberia, the company announced 4,500 job losses. On a like for like basis with Iberia this would represent job losses of between 1,000 and 1,200 in Aer Lingus at Dublin airport. This figure factors in the Aer Lingus jobs lost less than 5 years ago under the Greenfield Plan. The current IAG CEO’s record with Aer Lingus alone speaks volumes as 2,500 Irish jobs disappeared forever when he ran Aer Lingus.
"We’ve confirmed these estimates with analysts in Dublin and London. Following the rejection of the two initial bids, a research note from Nomura (a major international holding company) observes that “Any material bid increase is unlikely to be forthcoming without the ability to drive significant cost synergies” he said.
Risk to Irish economy
In media interviews earlier this week, IMPACT also sought to highlight the risk to jobs in small and medium enterprises across the country that rely on tourism and the strategic connectivity provided by Aer Lingus, and the risk to future inward investment into the Irish economy.
The union highlighted the risks arising if, at the first sign of trouble in a post-takeover Aer Lingus, IAG would have the power to limit Ireland’s air connectivity to London and the US in order to lower its overheads.
Matt told the Dáil committee “IAG’s commercial interests will always come first. I therefore urge you not to stand back and let something happen that can never be reversed.
Related:
RTE Morning Ireland, Monday 26th January 2015 – “Niall Shanahan, communications officer with the IMPACT trade union claims any takeover of Aer Lingus by IAG could result in job losses and have an impact on connections at Heathrow.”LISTEN HERE
IMPACT blog: Decision time at Aer Lingus
