Aer Lingus Airbus a330-300
Taken by Lauren Jordan @irelandspotter on IG
Aer Lingus has recently been reported to be talking to their worker unions to cut 20% of their 4500 people workforce. Regarding recent reports from the RTE, the Irish carrier is about to begin negotiations with these unions to discuss about reducing its workforce by about 900 workers. The majority of these workers are distributed in Dublin, Cork and Shannon. These cuts have not been confirmed by the unions, airline or management. However, it seems there will need to be another meeting to be held in order to come to a conclusion.
In April, Aer Lingus ended up reducing their staff's working hours by 50% along with sentencing pay reductions. This is in response to their low travel demand due to the pandemic. They have stated that if the situation continues, further measure would be needed.
What is going on with IAG?
The airline has been apart of the International Consolidated Airlines Group (IAG) since the 14th of December 2014. They are also joined by British carrier, British Airways who also issued job reductions earlier this week. They are currently undergoing a restructuring programme which could leave as many as 12,000 workers job less.
The group has not yet requested any government support. However, they have began giving financial aid to Vueling and Iberia. These loans have been secured and have added up to €1.01 billion altogether. They will be paid back over the course of five years if all goes well. The bank, Istituto de Credito Oficial will guarantee these loans to the airlines. €750 million is meant to go to Iberia while the other €260 million is to go to Vueling. This is to help the airlines get back onto their feet during these struggling times while Spain gets heavily hit by the Coronavirus.
During the first quarter of the year, the group stated that they have fallen deeply into revenue fall. The situation has effected their €1.3 billion profits due to foreign currency and fuel hedging issues. The group announced in their stick market filing that: ’’IAG’s pretax profit was impacted by an exceptional charge of EUR1.3 billion resulting from the ineffectiveness of its fuel and foreign currency hedges for the rest of 2020 due to over-hedging.’’ ”The operating result in the first two months of 2020 was similar to that of last year, despite the suspension of flights to China due to Covid-19 from the end of January. All of the reduction in the operating result in the quarter compared to last year came in March. The majority of the reduction in IAG’s operating result was incurred by British Airways, followed by Iberia and Aer Lingus, while Vueling experienced a modest increase in operating loss.”
They have reduced their passenger capacity by 94% for April and May competing to last year. Depending on the lockdown and travel restrictions, the group hopes that this will improve in June.
In early April, IAG stated that they want to retire some of Aer Lingus’ Airbus A330 aircraft along with some of British Airways‘ Boeing 747-400 aircraft and Iberia’s Airbus A340-600 aircraft. This is as a cost cutting measure. British Airways have been retiring their aircraft over the last month but Aer Lingus and Iberia haven’t. It will be a matter of months before we find out what will happen with these airlines’ aircraft.
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