Aer Lingus board meets to discuss rescue plan

The board of Aer Lingus was to meet on Tuesday to discuss the options for a rescue package for the beleaguered Irish airline.

It is understood that high on the agenda for the October 9 meeting was the axing of hundreds of jobs, but there were hopes that the Irish government may be prepared to step in with an aid package.

Fears have been growing about substantial jobs losses at Aer Lingus since the terrorist attacks on the US led to a drop of around 80 per cent on some of the routes.

In a bid to boost passengers the airline announced a range of lower fares on Monday. In some cases fares have been slashed by up to 70 per cent, in an effort to bring back customers to the airline. Flights to London are on offer for £29 and flights to New York can be had for as little as £169.

The situation at Aer Lingus was discussed during a meeting of the Irish Cabinet, which debated how much aid should be given to the airline.

The Taoiseach Bertie Ahern said that fiscal losses at Aer Lingus were running at around IR£2 million-a-day and that the company’s cash reserves would be depleted early in the new year.

There is concern that under current EU rules it may not be possible to directly provide state substantial aid, but one of the options believed to be under consideration is a guaranteed loan scheme.

Unions are reported to have accepted that jobs losses are inevitable given the severe difficulties that the company are experiencing. However, union leaders, who have not yet been told of the scale of the jobs losses, have already called on the company to attempt to achieve as many jobs loses as possible through voluntary redundancies.

In comparison the US government has already pledged a $15 billion package to help airlines though the ongoing air travel crisis. (SP)