The board of Aer Lingus has backed Labour Court proposals to pump €110 million in cash into a new staff pension plan.
The recommendations are aimed at resolving a long-running dispute over a €780 million deficit in an existing joint fund, the Irish Airlines Superannuation Scheme (IASS), which Aer Lingus staff share with Dublin Airport Authority and former SR Technics employees.
The plan would also see the company make a one-off contribution of €30 million to the new defined contribution scheme in respect of former employees who are deferred members of the IASS.
"The recommendation is clearly a compromise that contains elements that are challenging for all parties," Aer Lingus chairman Colm Barrington said.
“ Notwithstanding these challenges, it is our assessment that the recommendation is a step forward that balances the various risks and concerns and for this reason, it should form the basis upon which the parties proceed.”
The implementation of the plan requires the approval of unions, pension fund trustees and ultimately shareholders.
Ryanair, which owns nearly 30 per cent of the Aer Lingus, is known to be opposed to the once-off injection of funds.
However, the budget airline, which has failed in three attempts to takeover its rival, does not have enough shares to block the plan on its own.
In February, the EU Commission blocked Ryanair’s €690 million bid to buy the 70 per cent-plus shares in Aer Lingus that it does not own on competition grounds.
The British competition authority is still to rule on whether to compel Ryanair to sell its stake in Aer Lingus on competition grounds.
