The failure by TEAM employees to accept the Aer Lingus offer casts a serious question mark over the company's future prospects. The Danish group FLS, which wants to buy the aircraft subsidiary, has already waited five months and is unlikely to want to wait around much longer.
Aer Lingus executives tried to play down the significance of the vote or lack of it last night, preferring to take stock, but they acknowledged that FLS would not wait for ever. It is understood that the results were conveyed to senior FLS executives last night.
Under a deal agreed with FLS, the Danish group was given 90 days' exclusivity to carry out due diligence on the TEAM facility.
The sale of TEAM is a crucial part of the airline's strategy to maintain profitability and generate sufficient funds for future investment in its aircraft fleet. The company argues that the aircraft maintenance business is consolidating worldwide, and TEAM will not survive on its own.
Once allied to FLS, it argues, TEAM would become part of a bigger business with sufficient financial backing from a £2 billion group. Aer Lingus sources said last night it was not just a question of the investment which TEAM needs, but also of its position in the world market over the next couple of years. "Regardless of investment, TEAM would still be a small player on its own," the source said.
FLS has already signalled the importance of a merger, saying the deal would give the two companies a market share greater than any other single third-party aircraft maintenance supplier in Europe. It has been estimated that FLS would pay £25 million-plus to Aer Lingus for the facility. As part of the deal, Aer Lingus would leave its own aircraft maintenance work with TEAM, said to be worth £15 million£20 million a year.
TEAM, which has had a turbulent industrial relations history since its formation in 1991, has a strong reputation in the airline industry. Its employees' expertise is acknowledged worldwide. The company has a turnover of about £85 million, although this fluctuates, and it was on course to turn a small profit last year.
The Aer Lingus group's 1997 results are due shortly, but it is understood they will not be published until after the TEAM deal is completed - if it is completed. The results will make provision for the offer to TEAM workers.
The company was adamant last night that the £54.5 million offer would not be improved, and those who accepted the deal would not be asked to vote again. "We will have to see if there is a mechanism we can use to persuade the remainder of the employees to vote," said one source.
Once TEAM was sold, the airline said, it would tackle the issue of examining what other airline or airlines would make suitable strategic alliance partners for Aer Lingus. The airline business was also consolidating and was becoming increasingly competitive.
The last government told Aer Lingus to come up with proposals for a suitable partner, but this was put on the back burner until the TEAM issue was resolved.
The group had been due to re port to the Government on the strategic alliance issue by the end of last year. The further delay in sorting out TEAM will mean making progress on the search for an alliance partner will again be deferred.
The last published results for 1996 showed an operating profit of £42 million.