A bitter labour row over a leaked memo about cuts greeted new Aer Lingus chief executive Dermot Mannion when he assumed the leadership of the Irish state-owned carrier in August.
Mannion, who was recruited from Emirates, was faced with dealing with the public fallout of a leaked memo from the former management team. The memo details what labour union SIPTU describes as a list of possible “environmental push factors” to encourage some staff to leave. The memo, drawn up by the human resources department in response to a request by management for cost-cutting ideas, suggests a change of uniform, reduced overtime, no staff transport and closure or reduction of bases. Aer Lingus chairman John Sharman admits the language used in the document is “impersonal and clinical”.
“I must emphasise to you, despite what you may have read or heard others say in the media, this was never, and is not now, a statement of management policy or a definition of practice on the part of the company,” says Sharman in a letter to staff. Labour union IMPACT says that the carrier did try to impose unnecessarily difficult shift patterns that would have hit staff with families hardest, and claims to have resisted attempts to change agreements on part-time working and impose new uniforms.
IMPACT official Christina Carney says: “The current Aer Lingus chairperson has told us that he wants a good relationship with staff,” but warns: “We won’t tolerate further attempts to bully staff into submission.” One Dublin-based financial analyst said that the former management team, led by British Airways chief executive-designate Willie Walsh, was naïve to allow these ideas to be put on paper.
Analysts are worried that some of the momentum behind the airline’s startling turnaround since 2001 has been lost in the void between Walsh’s departure earlier this year and Mannion’s arrival. There is also a concern that the leaked memo will have damaged morale at the Irish airline.
SIPTU warns that the effect on industrial relations has been “corrosive and extremely damaging in a situation where members are already unsettled by yet another cost-cutting plan and proposals to privatise their company over their heads”. Unions are against privatisation and this resistance, combined with a lack of government willingness to push privatisation through, were the main catalysts for Walsh’s departure from the airline.
Mannion has made it plain that he sees long-haul operations as the key to the carrier’s future strategy, with growth opportunities on short-haul routes limited by the presence of Ryanair. Under Walsh, raising equity through privatisation was seen as a means of funding new long-haul aircraft, but that option is unlikely to be available to Mannion, given the lack of union, government or even public support.
However, the recent strong financial performance by the airline means that the state would be able to invest in new aircraft without infringing European rules on state aid, as it would be considered as being the equivalent of a rational undertaking by a private investor. Whether Dublin is willing to invest is not clear, however.
COLIN BAKER/LONDON
Source: Airline Business
