Aer Lingus management last night told staff representatives that major job cuts and cost reductions are to be implemented across the airline, regardless of Ryanair's €1.4 billion bid.
Dermot Mannion, the chief executive, said existing agreements would have to re-examined. Areas like maintenance, catering and its US operations are to come under scrutiny. No figures on the number of jobs to go were disclosed, but the management team said there would be significant changes required.
The staff representatives were told that a "root and branch" review was being immediately instigated. Advisors to the airline - Goldman Sachs and Merrion Stockbrokers - were informed of the broad details of management's plan last night.
The plan is believed to have shocked and angered some of the staff representatives gathered at the meeting of the Central Representative Council, a forum where management gets a chance to brief staff on current developments.
It is understood Mr Mannion told the meeting that staff were facing a stark choice - face cuts under the current Aer Lingus management team or under Michael O'Leary's Ryanair. The meeting was told that virtually all cost headings would be examined and if change was not delivered the airline could once again find itself in crisis.
Reaction from trade unions was not available last night.
Meanwhile, during a meeting with the economic co-ordinators of the European Parliament's political groups yesterday, Commissioner Nellie Kroes said she would look at the "horizontal effects" of any possible merger between the two airlines, as well as the effects on the European industry in general. Ms Kroes said that she had supported airline alliances and mergers in Europe in the past, "but that parties have to behave themselves".
Fianna Fáil MEP Eoin Ryan said he was "delighted" by the commissioner's comments. "In effect, this clearly means that the European Commission will look to the effects that such a takeover would have for the airline business between Ireland and Britain and for the actual operation of Dublin airport itself," he said.
l Meanwhile, the pilots' group at Aer Lingus - Tailwind Nominees - has raised its stake in the airline to 1.8 per cent.
The group has bought 695,000 shares at €2.83 per share. This will have cost the pilots approximately €1.9 million. The pilots have been buying shares over two days now. Last week the pilots' pension group also bought a stake in the airline.
The Ryanair bid of €1.4 billion is in danger of failing to meet its main target - to exceed 50 per cent. But earlier this week Mr O'Leary said it was a "more than generous" offer for the company, which he pointed out had only floated at €2.20 a share.