Talks between Aer Lingus union leaders and senior Government officials to finalise details of the proposed employee share option scheme (ESOP) at the airline are to resume today. Although the parameters of the scheme were outlined by the Government to the unions on Thursday, there are still significant details to be resolved before SIPTU and IMPACT can begin balloting members on the Aer Lingus survival plan.

One important factor to conclude a deal fell into place yesterday - the Aer Lingus board agreed to accept amendments to its survival plan from the Labour Relations Commission (LRC).

The board had hoped that the National Implementation Body, set up by the social partners to oversee the Programme for Prosperity and Fairness, might amend the LRC proposal that the Aer Lingus unions be allowed to seek a pay review after 15 months. The company wanted a pay freeze for 27 months. In the event, the group stood over the LRC proposal.

Assuming that remaining problems over the ESOP can be resolved, the company still needs to secure enough acceptances of its voluntary severance scheme to avoid compulsory redundancies. Its target is 2,026. So far about 1,800 applications have been received but it will be some days before it becomes clear if there is a good skills match between those willing to go and jobs to be shed.

In Brussels, the Minister for Public Enterprise, Ms O'Rourke, expressed optimism about the outcome of negotiations. She said yesterday that the Government had paid Aer Lingus £5 million (€6.3 million) in compensation for business lost by the airline in the initial aftermath of the September 11th attacks. The Republic, along with France, Spain, Italy, Greece and Portugal, would now seek permission from the European Commission to extend the aid to airlines for business until December 31st.

Senior officials who accompanied Ms O'Rourke to Brussels said acceptance of the Aer Lingus survival plan by the workers should secure the airline's short-term future. But they indicated that it might need to restructure again once it returns to profitability in 2003. This could mean that the profit-sharing scheme on offer to the unions might be capitalised relatively early.