Morning Equity Briefing
Aer Lingus
AERL ID
Management to proceed with cost saving measures
Stephen Furlong
| Closing Price | 60c | Rating: | Neutral | 30/06/09 |
Following a board meeting yesterday (March 9th), Aer Lingus indicated that it intends to proceed with the implementation of those elements of the cost reduction programme agreed with the four union groups that supported the proposals. In the case of cabin crew, who rejected the proposals, a new solution will incorporate redundancies, reduced salaries, new working conditions and the de-layering of cabin crew organisation. Aer Lingus will therefore notify the Department of Enterprise, Trade and Employment of the commencement of a 30-day compulsory consultation period as required by law. This clearly shows management's determination, and we might add the necessity to deliver on the €97m cost savings programme in full.
Meanwhile, talks between British Airways and the Unite trade union, which represents cabin crew, are due to resume after a deadline was extended. The union has a strike mandate until March 22nd and must give the company seven-days notice, leaving March 15th the final day before it must decide on strikes.
In Lufthansa's dispute over the deployment of pilots, the Vereinigung Cockpit Union will keep talking, even after a two-week negotiating period ordered by a court expired on Monday.
These developments all show the complexities involved in getting cost deals over the line in unionised airlines — and the necessity of delivering on those deals.