Aer Lingus to establish dispute-resolution internal structure

Aer Lingus is attempting to tackle the ongoing industrial relations problems, which recently grounded the airline for a day and cost it €10 million, by establishing an internal dispute-resolution body.

The company yesterday published figures showing that operating losses in the first six months of the year fell by 40 per cent to €9.9 million, but the business made a €38.7 million profit between March and the end of June.

Aer Lingus said that its operations would have broken even in the normally loss-making first half of the year but for a one-day cabin crew strike over rosters that cost it €10 million.

According to chief executive Christoph Mueller the company is working with its unions on establishing an internal body that will provide it with a forum for dealing with disputes at an early stage and prevent them from developing into full-blown industrial relations rows.

He said the unions had proposed establishing the body, which will have three members: a chairman and representatives of the company and its workforce.

Mr Mueller said ending up before bodies such as the Labour Relations Commission or Labour Court over comparatively small issues such as rosters had become "almost like a default" for the airline.

Along with the €10 million cost of the cabin crew strike in May, Mr Mueller said a further €10 million would be carried through to the year’s second half in bookingslost because people feared another dispute would strand them.

Industrial relations issues apart, Mr Mueller described Aer Lingus’s first-half performance as stellar. He said the second-quarter profit was the best in five years and was a 33 per cent improvement on the same period in 2013.

“Based on recent trading trends we once again expect that full-year 2014 operating profit, before net exceptional items, will be at least in line with 2013, that is €61.1 million,” he said in a statement.

Revenue rose 4.6 per cent to €563 million while pretax losses tumbled 50 per cent to €14 million from €28 million. Passenger numbers rose 1 per cent to 4.615 million. The airline sold 76.1 per cent of available seats in the overall first six months of the year and 80 per cent in the second quarter.

The airline boosted transatlantic services by 25 per cent, adding routes from Dublin to San Francisco and Toronto and increasing frequencies from Shannon to New York and Boston. Mr Mueller said 30 per cent of all transatlantic passengers during the period were travellers connecting from either Britain or continental Europe. Aer Lingus is targeting this business as part of its long-haul strategy.

The group is still dealing with a dispute over a €750 million shortfall in the pension pot it shares with Dublin Airport Authority and the former SR Technics. Recently it signalled its willingness to accept proposals from an expert panel assembled in March with the Government's backing.