Earlier this week, Ryan air launched a counter-offensive in its battle with the State's largest trade union, SIPTU, over baggage-handler's pay.

The airline's chief executive, Mr Michael O'Leary, took to the airwaves to claim that terms and conditions at Ryanair were "substantially better" than those on offer at Servisair, a baggage-handling company providing services to third parties at Dublin Airport.

Mr O'Leary said that Ryanair staff got 20 days off each year compared with 15 at Servisair; they could avail of free flights, unlike their Servisair counterparts, while the standard rate of overtime was the same as the Servisair rate, at 1 1/2 times basic pay.

"The key thing, though, is that the average pay, be it basic, average, one year or two years, is better in Ryanair than in Servisair", the chief executive said.

Servisair declined to comment, but SIPTU, which represents workers at both Servisair and Aer Lingus, maintains that Ryanair is paying its baggage-handlers less than British Midland, Aer Lingus or Servisair.

It disputes Mr O'Leary's claim that the average take-home figure for baggage-handlers at Ryanair is £13,600, saying that this amount is only earned by workers who have been there for over 12 months, are never sick, and drive tugs, for which they receive a £500 bonus each year.

SIPTU says that the basic starting pay at Ryanair is £9,600 a year, rising to £10,600 after one year's service. On top of this, workers get a guaranteed shift allowance worth £1,200 per annum and an attendance bonus of £1,300, while baggage-handlers who can drive a tug get an additional bonus of £500.

This brings the total earned to £12,600, or £13,600 for those who have been at Ryanair for over 12 months. This £13,600 figure is the one stated by the airline.

If, however, handlers miss work for a day, they are docked £108 from their monthly wages. The union also claims that Ryanair staff are not paid extra for working on Saturdays, Sundays or public holidays, while their shift allowance is less than at rival companies.

SIPTU says a baggage-handler in his first year, working a 40-hour week and two out of three weekends, would earn £207 at Ryanair, £255 at Servisair, £257 at Aer Lingus and £343 at British Midland. After five years this rises to £227 at Ryanair, £269 at Servisair, £307 at Aer Lingus; it remains the same (£343) at British Midland.

But these figures do not take account of the attendance and other bonuses which would push up the Ryanair figures. Ryanair staff are due a pay review in April and the company has guaranteed a minimum 2 per cent increase. The airline points out that staff move onto a higher rate of pay in their second year at Ryanair while staff at Servisair have to wait five years before moving to higher pay rates.

THE other airlines declined to comment on the dispute or on pay rates, but industry sources point out that comparisons are complicated by grading structures and the fact that baggage-handlers at different companies may not do exactly the same job. "It's almost impossible to compare like with like. You are just not comparing apples with apples," one source said.

However, sources generally agree that British Midland offers the best terms and conditions for baggage-handlers, followed by Aer Lingus, although the complicated grading structure at the national airline means the amounts earned can vary widely.

Many observers believe that the increasingly bitter five-week Ryanair dispute could become a test case in the growing Americanisation of Irish industry as the number of companies choosing to bypass unions and negotiate directly with their workers on pay and conditions continues to increase.

Union density in Ireland has declined over the last 20 years from a position where unions represented some 80 to 85 per cent of workers across the economy. Although the public service remains highly unionised, representation in the private sector has fallen to closer to 40 per cent.

Few of the big US multinationals locating in Ireland now deal with trade unions, opting instead to set up their own internal structures to talk directly to staff.

The electronics sector, in particular, tends to be non-unionised, and companies such as Microsoft, Intel and Hewlett Packard are among those who prefer to negotiate directly with their workers.

Industry observers note that the growing number of companies which opt not to recognise or negotiate through unions usually offer higher pay rates than local indigenous firms; they generally organise profit-sharing and share option schemes as well.

Ryanair has yet to organise a profit-sharing or stock option scheme, but the airline, which offered staff a flotation bonus when it went public last May, says it is currently working on one.