BAGGAGE handlers at Ryanair, who have joined the ATGWU, will meet union officials tonight to consider an offer from management to settle the dispute about pay and conditions.

The baggage handlers have been offered an increase of £1,000 in basic pay and a productivity increase of £1,000. Baggage handlers earn a basic rate of £8,000 to £9,000 a year with a monthly bonus of £115 for perfect attendance, according to Ryanair operations director, Mr Conor McCarthy. The offer amounts to increases of up to 22 per cent, depending on each employee's position on the pay scale.

Strike action planned for last weekend was deferred to facilitate discussions between the parties. ATGWU official, Mr Michael O'Reilly, said the company had agreed to bring pay rates into line with pay at Servis Air which raised its rates in recent weeks. Some employee sources said this would mean a 25 per cent rise in pay rates.

Mr McCarthy said the company had agreed that the total package for its baggage handlers would be on a par or above pay rates in the industry.

Ryanair discovered that its rates were out of line when six employees left in the last two weeks to join Servis Air, he said.

Asked about the impact of any increase in pay rates on company costs, he said that this was just "a tiny percentage" of the company's cost base and would be more than compensated for by other cost savings.

These would include interest savings when the flotation proceeds are used to pay down debt and savings on other costs because the company would be able to get better rates for cash, according to Mr McCarthy.