RYANAIR is to meet baggage handlers tomorrow to put forward firm proposals to avoid a threatened dispute over pay and conditions. A threat to begin strike action today was called off at the weekend.

Mr Michael O'Reilly of the ATGWU said the company had spoken to the handlers and had given an understanding that their wages would follow the rates in Servisair. On that basis, strike action had been suspended.

Some employee sources said the proposal included a 25 per cent increase in wage rates, but this was disputed by Ryanair management which said no firm figure had been given.

The ATGWU is to meet the baggage handlers on Wednesday, a considerable number of whom have joined the union, to consider the Ryanair proposals. Mr O'Reilly said there was still the outstanding issue of union recognition.

Mr Conor McCarthy, Ryanair operations director, said an offer would be put to the baggage handlers tomorrow. He said no clear figure had been given at the weekend meeting. He said the baggage handlers had been assured that their wages would be on a par or better than others in the industry. "We assured them that their wages would not fall behind and that they, would be earnings competitive.

Mr McCarthy added that was not a low wage airline.

He said the company did not have a problem recognising unions, but preferred to deal with the employees directly. He said they had told the baggage handlers that they should look at the total package.

Ryanair was a low cost airline which had to do things differently, he said. It had been pointed out to them that when Servisair floated, the employees (not including executives) had not got flotation bonuses, whereas they had in Ryanair.

Ryanair recently lost about six baggage handlers to Servisair which had reportedly increased its wage rates.

Mr McCarthy said the company was considering introducing a profit sharing scheme at some stage. He added that the company had examined schemes in the US and they seemed to work very well.

The company floated on the Dublin and New York stock exchanges last week, and by the close of business on Friday had maintained the 120p premium achieved on the launch price of 195p. There had been some fears that the dispute might harm the share price.

The flotation raised £57.8 million net of expenses. The monies will be used by Ryanair to expand its business and buy new planes. Last month, the company launched new services to France and Belgium.