Aer Lingus reaffirms commitment to pension proposal

FIONA REDDAN

Aer Lingus this morning reaffirmed its commitment to making a one-off payment of €140 million to shore up the airline's pension fund.

In a statement released to the stock exchange, Aer Lingus said that it has given “careful consideration” to the proposals made last week by the trustees of the companies’ Irish Airlines Superannuation Scheme (IASS), which included cutting pension payments to retired staff and reducing by 20 per cent the benefits built up by workers.

However, the airline stated that its proposed once-off funding of € 110 million to a new defined contribution scheme for current employees of the company “remains adequate” and that it will also make a once-off contribution of € 30 million to a new defined contribution scheme in respect of former employees who are deferred members of the IASS. It will reassess the matter “once it has sight of the actual draft funding proposal”.

Last week it was revealed that members of trade union SIPTU had voted for industrial action on the issue, and the airline today said that this “is not helpful” to making progress towards reaching a solution to resolve the €780 million pension deficit.

Aer Lingus said that it plans to issue a circular to all shareholders and convene an egm to seek approval to make the proposed once-off contributions totaling € 140 million. However, it noted that the “process is complex and there is no certainty that agreement can be reached between the various parties”. As such, in a statement the airline said that “it is difficult to state with certainty when an EGM on this matter could occur”, but added that it “remains hopeful” that it could take place during 2014.