Aer Lingus dispute may cause disruptions

AER LINGUS passengers could face disruption in coming weeks after talks aimed at finding a solution to the €748 million hole in an aviation workers’ pension plan were suspended last night.

The airline met trade union representatives at the Labour Relations Commission (LRC) yesterday in the latest bid to find a way of plugging the €748 million shortfall in the Irish Airlines Superannuation Scheme (IASS), operated jointly by Aer Lingus, Dublin Airport Authority (DAA) and SR Technics.

The LRC adjourned talks between the airline and the unions “indefinitely” to allow the unions to clarify a claim that the DAA had offered a deal involving paying retiring workers 85 per cent of final incomes.

After yesterday’s meeting, the biggest union involved, Siptu, said that industrial action was the only option remaining for workers at the airline, which it said had already refused to go to the Labour Court.

The airline said it was disappointed at the lack of progress. “Aer Lingus believes that today’s discussions have been overshadowed and hampered by an interpretation by union groups that a proposal targeting ‘85 per cent of final incomes’ has been agreed with the DAA,” the company’s statement said.

It emerged last week that a memo circulated by trade union Impact stated that the DAA offered to pay €55 million into workers’ pension pots and could receive payments of 78 per cent of final income on retirement.

However, the authority subsequently denied that it had made a €55 million offer to trade unions and said in a statement that its position was aligned with Aer Lingus.

The DAA is due to meet unions next week.

Aer Lingus said yesterday that the DAA had confirmed to it directly that its offer to unions did not involve “any such” level of pension coverage.

“We encourage the union groups and the DAA to resume their discussions to clarify their positions,” the airline said.

“We continue to seek to achieve a fair outcome that improves the pension prospects of affected IASS members in a way that will balance the interests of all parties including shareholders.”

Aer Lingus said that it remained available to resume talks and added that the LRC was the appropriate forum for this.

The parties have been wrestling with the pension issue for some time.

It emerged last month that the scheme had a €748 million deficit at the end of May.

According to a document circulated last month, in the event of the scheme being wound up, the trustee would purchase guaranteed annuities to secure pensions in payment, but active and deferred members would receive only 15 per cent of the statutory entitlement.

Employers had proposed that the IASS scheme be frozen. They wanted the trustees to adjust accrued benefits for active and deferred members while also purchasing sovereign annuities for current and future pensioners.

This was recommended by the LRC, with a few amendments.