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Statement by CEO Christoph Mueller on status of

Transformation Plan  

ISE: EIL1 LSE: AERL

Dublin, 01 December 2009:  Following an extraordinary meeting of the Board of Directors of Aer Lingus Group plc (the 'Board'), the Board approved the release of the following statement from Christoph Mueller, Chief Executive:

"Aer Lingus and all of its employees have not reached agreement in respect of all aspects of the proposed Transformation Plan. We have narrowed the gap with most union groups on the achievement of sustainable savings and this has brought us very close to signature with them.

The exception to this promising outcome is the Irish Airline Pilots Association (IALPA) and to a lesser extent, Cabin Crew. Instead of sustainable savings of a structural nature, only temporary savings over a short few years were offered by IALPA. Aer Lingus was asked for very high compensation in return. Our pilot compensation and productivity remains out of line with the compensation and productivity of our competitors.

The Board and Management believe that the majority of our staff understands that Aer Lingus needs to make significant and urgent change if it is to have an independent and successful financial future, and that they are committed to achieving this change. If successful, we can maximise the scale of the Company and keep staff numbers closer to current levels. However in the absence of real cost savings being delivered from all employee groups, we will have to resort to other measures. 

The Board and Management will now move to reduce capacity, further eliminating routes which are loss making as a result of our high cost base. This will result in the operation of fewer aircraft, which in turn will lead to additional redundancies beyond those included in the Transformation Plan. It is very likely that these redundancies will commence immediately and will be compulsory.

I remain confident that Aer Lingus can pursue an independent future. I wanted to prove that a unionised airline, Aer Lingus, could be turned around in Ireland. In this regard it has always been and remains our preference to secure the required cost savings through agreement with our employees. 

On this occasion it has not been possible to reach agreement with all our employee groups and we must now take whatever actions are necessary to stabilize the business, in the interests of Aer Lingus, its customers, the majority of its employees and its shareholders." 

 

Press Enquiries:

Enda Corneille                                                Shelia Gahan/ Brian Bell

Aer Lingus                                                     Wilson Hartnell Public Relations

Tel:      +353 1 886 2000                                 Tel:    +353 1 669 0030

                                                                              +353 87 234 2409 (SG)

                                                                              +353 87 243 6130 (BB)    

                                                                     Email:    sheila.gahan@ogilvy.com

          brian.bell@ogilvy.com

 

International

Victoria Palmer-Moore/Matthew Fletcher

Powerscourt

Tel:        +44 207 250 1446

Email:    victoria.palmermoore@powerscourtmedia.com

             Matthew.fletcher@powerscourtmedia.com

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