Plan for new cost savings at Aer Lingus

Aer Lingus will confirm over coming days its intention to press ahead with the implementation of a controversial cost saving …

Aer Lingus will confirm over coming days its intention to press ahead with the implementation of a controversial cost saving plan at the airline.

The plan aims to generate up to €20 million annually in labour cost savings and possibly €10 to €15 million more in other areas.

Aer Lingus is expected to seek significant changes in work practices across a number of areas of operation. The company has already moved to establish a new base in Belfast where it intends that staff will be paid at local market rates.

The cost saving plan, known as PCI (programme for continuous improvement), was first signalled a year ago as part of the company's defence against a takeover bid by rival Ryanair.

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It is understood that the declaration of the company's intention to press ahead with the implementation of the plan could come as early as today.

It is also understood the airline has assured investors that savings to be generated by the plan will materialise in 2008.

Aer Lingus is already involved in a row with its pilots over its plans to establish the new base in Belfast. Michael Halpenny, the national industrial secretary of Siptu, has said that any changes will have to be implemented through negotiations and agreement.

Martin Wall

Martin Wall

Martin Wall is the Public Policy Correspondent of The Irish Times.