The Irish Government is trying to assemble a rescue package for beleaguered flag carrier Aer Lingus as it realises that there is little chance of the European Commission allowing state aid. Both the government and unions are coming around to the idea that a radical overhaul is needed. The airline is looking to axe 2,000 of its 6,000-strong workforce.
The problem for Aer Lingus is funding redundancies. It is offering around IR£20,000 ($22,000) per employee, but the unions are looking for IR£50,000. At that rate, the IR£100 million cost will put a strain on cash reserves.
Dublin is looking for private investors to match any government input, satisfying EC rules on state aid. John Mattimoe, analyst at Dublin-based Merrion Stockbrokers warns that before this goal is reached "the operating cost base has to be completely over-hauled" and the carrier has to lose all "explicit and implicit" political interference.
Source: Airline Business