Aer Lingus is set to spend up to €80 million on one of the most ambitious redundancy packages in the airline's history in an attempt to cut the workforce by 1,325.
The airline said it was prepared to accept a significant once-off charge in an attempt to transform itself into a low-cost operator. Each permanent employee prepared to leave the company is guaranteed a mimimum payment of €40,000.
Staff will be entitled to claim nine weeks' pay for every year of service. Departures from the company could begin as soon as late September, and staff have until September 14th to apply. In the last major restructuring plan at the airline in 2001, staff were offered four weeks of pay per year of service.
Unions last night welcomed the announcement. SIPTU's national industrial secretary, Mr Michael Halpenny, said it was good news for staff, but he claimed it was only tabled after union pressure.
"One thing is clear, there is no way this offer would have been on the table had the unions not said to the company that in the context of an early agreement there would have to be a satisfactory package."
He said, however, that several outstanding issues remained.
This view was echoed by the assistant general secretary of Impact, Mr Michael Landers, who said his union was still demanding a pay rise for the remaining staff.
The latest package did not apply to pilots, and he wanted the airline to confirm that no pilots would be made redundant in the years ahead.
However, Mr Willie Walsh, chief executive of the airline, said the management team believed the offer was right and would be attractive enough to cut staff numbers.
"It is an innovative, imaginative programme," he said. While the airline was profitable it had to face up to market reality and act decisively.
Mr Walsh has pointed out that, due to reducing fares, the airline's revenues are likely to be under great pressure in the next few years. He has also pointed to the lower staff numbers at rivals such as Ryanair and EasyJet.
Asked how much it would cost the airline, Mr Walsh said "a year's operating profits". He said it was hard to be specific at this stage, but the final cost would probably be towards €80 million.
It also emerged last night that Mr Walsh has written to the Minister for Finance, Mr McCreevy, telling him the way is now clear for 14.9 per cent of the airline's shares to be transferred to staff.
This had been held up in recent months because of industrial relations issues. The staff will hold the shares as part of an employee share ownership trust.
The package made available by the airline consists of three options.
Option A entitles staff members to a €7,000 lump sum for every year of service.
This encompasses a minimum payment of €40,000 and a maximum of €70,000.
Option B consists of a basic deal of nine weeks' pay per year of service, up to a maximum of 130 weeks.
Option C consists of four weeks pay per year of service (to a maximum of 104 weeks), plus a service bonus of €2,750 per year of service.