AER ARANN is to cut its workforce by up to 25 per cent as it looks to reduce costs by seeking up to 100 redundancies.

The firm says that the cost-reduction programme is "being implemented to ensure the airline's long-term future", and it will lead to an increasing concentration on the charter and "wet lease" programme it introduced during the summer, whereby Aer Arann provides aircraft, crews and maintenance to other airlines.

Although the firm's key routes will be unaffected by the development, it will lead to a reduction in the airline's marginal scheduled services.

Aer Arann said it could not say at this point which routes would be affected.

A spokesman for the airline said the route reductions would not have an impact on its public service obligation routes, which are subsidised by the State.

These routes include Knock-Dublin, Derry-Dublin and Galway-Dublin.

The airline currently employs more than 400 people and the programme will "likely" lead to a reduction in staff numbers of up to 100 people.

However, the firm said that redundancies for flight crew and engineers "may reduce, depending on the progressive introduction of new charter and wet lease business".

According to the firm, the new business model will "maximise aircraft utilisation" with a core scheduled operation of nine aircraft and additional aircraft allocated to the charter and wet lease market.

Currently, the airline operates 12 aircraft on scheduled services and has one aircraft on wet lease.

The airline has already contracted one aircraft to British operator Flybe.

Depending on whether the firm can successfully lease the three additional aircraft it is freeing up through reducing its schedule operations, a spokesperson said the overall figure of 100 redundancies might fall back to 85-90.

Aer Arann operates more than 600 flights a week across 40 routes in Ireland to Britain and Europe.

In the first months of 2008, the airline increased its passenger numbers by 3 per cent year-on-year to 430,100. Its international routes registered 10 per cent growth in the same period.