Aer Lingus hit by €80m pay claim from trade unions

Labour Court submission seeks a 5pc pay hike in each of the next three years

AIRPORT unions have hit Aer Lingus with a pay and profit-share claim of almost €80m, the Sunday Independent has learned.

Labour Court documents which have been seen by this newspaper reveal that airline staff are seeking a 5pc increase in pay each year for three years, which would cost the company €30m.

The unions are also demanding the introduction of an ongoing profit-share scheme, as well as the payment to staff, by way of a lump sum, of a share of the €233m profit reported by the company in 2016.

Based on the current level of profitability, a 5pc share would cost Aer Lingus €35m over the period.

The unions are also seeking €13m worth of double increment payments for two years to make up for increments that were not paid to staff between 2008 and 2016.

The pay claim follows the sizeable claim lodged by Siptu with Dublin Airport Authority, which was revealed by this newspaper last week.

“It is our contention that the exceptional financial performance of the company is in large measure due to the efforts of employees in Aer Lingus,” said the submission from Siptu, Impact and Unite.

The unions told the La- bour Court that the company had “in the region of €1bn of free cash” and has “outperformed all its peers within the IAG Group”.

Aer Lingus had achieved a return on invested capital in 2016 of 23.1pc, well ahead of its annual target of 15pc, it said. A spokesman for the airline had no comment.

Meanwhile, this newspaper has also learned that despite its strong performance, the airline is deeply unhappy with DAA after a serious malfunction of baggage belts at Dublin Airport caused it delays last week.

A botched software update, that DAA said was caused by an external provider, forced Aer Lingus to resort to trolleys and so-called “bingo cards” to handle baggage in Dublin’s Terminal 2.

In a memo, Aer Lingus chief operating office Mike Rutter described this as “a business process more suited to the 1970s”.

The problems had caused hundreds of bags to go missing and thousands of passengers to be delayed last week, said Rutter.

“This week’s service failures follow a number of other serious infrastructural issues at Dublin Airport and we continue to be very concerned about the DAA’s lack of investment and failure to address these key issues,” he wrote.

A MAJOR row has broken out between Aer Lingus and the DAA over what the airline’s chief operating officer described as “unacceptable infrastructural deficits” at Dublin Airport.

In a stinging memo seen by this newspaper, Aer Lingus chief operating officer Mike Rutter attacked the DAA over alleged lack of investment after baggage belt failures cost the airline hundreds of thousands of euro last week. Rutter said the airline has serious concerns over DAA’s failure to invest in key infrastructure such as taxiways, contact stands and baggage belts at the airport.

The attack was in an update Rutter sent to staff on Friday about “significant infrastructural issues” which arose on a number of days last week and caused major delays.

On Monday and Tuesday of last week Aer Lingus “experienced major operational disruption as the baggage belts failed in our T2 baggage hall”, said Rutter. “This occurred due to the DAA’s uploading of new software to the airport IT infrastructure, which rendered the baggage belts inoperable.”

This forced Aer Lingus’s baggage hall team to manually process bags using “bingo cards” to assign them to the appropriate aircraft. This, said Rutter, was a business process more suited to the 1970s.

The failure, which DAA said was by an external service provider, caused hundreds of bags to be short-shipped and caused significant delays to departing flights, he said. But Rutter wrote that the issue had “translated into thousands of dissatisfied Aer Lingus guests separated from their baggage and/or arriving late to their desired destinations”.

The technical problems stabilised mid-week but recurred on Friday morning when the baggage transfer belt in Terminal 2 malfunctioned, followed by the breakdown of all the baggage belts in the terminal, affecting all carriers based there.

This meant that check-in agents were forced to transport bags on trolleys to the baggage hall and again assign bags to aircraft using “bingo cards”.

“Today’s departures have been significantly delayed and the already large backlog of short-shipped bags at Dublin has grown even further with knockon costs for Aer Lingus running into the hundreds of thousands,” said Rutter.

“This week’s service failures follow a number of other serious infrastructural issues at Dublin Airport and we continue to be very concerned about the DAA’s lack of investment and failure to address these key issues,” he said.

Rutter said Aer Lingus continues to be “concerned with the DAA’s failure to invest sufficiently in the provision of taxiways, contact stands, baggage belts and many other aspects of important airport infrastructure and have raised these matters with the DAA at the highest level.”

A Dublin Airport spokesman said “an upgrade by an external service provider, which was introduced this week, did create some technical issues and we are working closely with the company in question and our airline customers to resolve them. Dublin Airport is currently investing €100m per year to upgrade and maintain its facilities for the benefit of airlines and passengers”.