Aer Lingus has axed 600 jobs due to hit from Covid
IAG says it’s committed to developing Dublin hub
AER Lingus has already cut 500 jobs and is currently finalising an additional 84 redundancies as it grapples with the impact of the Covid pandemic.
The losses represent more than a tenth of the 5,000 people the airline employed at the end of June last year.
Its interim CEO, Donal Moriarty, confirmed the extent of the job cuts as Aer Lingus owner IAG revealed the scale of losses inflicted on the Irish carrier during 2020.
Aer Lingus plunged to a €563m loss last year, which included €202m of exceptional items. It had made a €276m pre-exceptional operating profit in 2019. Its passenger revenue slumped 81.4pc to €382m last year, while cargo revenue jumped to €88m in 2020 from €34m.
Mr Moriarty said Aer Lingus would have hired another 500 people by now had the pandemic not struck, in order to fuel growth. The airline had significantly expanded its services to North America since IAG acquired it in 2015.
But IAG remains committed to continuing development of Dublin Airport as a hub for transatlantic travel after the pandemic, said IAG’s CEO, Luis Gallego.
He said Aer Lingus had done an “excellent job” with its value carrier model, generating the best return on invested capital in the group.
“If things come back to the place where they were as we expect, for sure we will continue investing in Aer Lingus and development of the Dublin hub,” said Mr Gallego.
IAG has plans to initially shift five aircraft to Manchester to operate direct flights from the UK city to destinations in the United States this year. Mr Moriarty claimed that the plan “doesn’t involve taking aircraft that would otherwise be deployed in Irish airports”.
“Our fleet plan and the aircraft within our fleet is sufficient to allow us to launch services from regional UK to North America and for us to execute on our plans out of airports in Ireland,” he said.
Mr Moriarty also insisted that Aer Lingus is happy with progress made to date by Conor McCarthy’s Emerald Airlines, which in November was named preferred bidder to operate the Aer Lingus Regional service from the end of 2022. It’s currently operated by Stobart Air. Emerald Airlines has been in talks with lessors to secure initial aircraft to operate the service.
This week, IAG named the head of its cargo division, Lynne Embleton, as the new CEO of Aer Lingus. She’ll start on April 6. Ms Embleton is the first ever female chief executive at the airline.
Aer Lingus has underpinned its liquidity with a €150m facility from the Ireland Strategic Investment Fund (ISIF) that was inked in December. It has already drawn down €75m of that. It also received a €50m loan from IAG.
Mr Moriarty said the airline remains in continuing discussions with the Government and is keen to focus on “detailed planning for the restart of aviation”.
“The sector and Government need to start that planning in a meaningful way,” he said. “Aviation is a critical driver of the Irish economy and indeed will be crucial to the recovery.”