Former Aer Lingus chief executive Willie Walsh, who is now head of the International Air Transport Association, has said that the current dispute with pilots is going to have significant reputational damage for the airline and that the future does not look promising for Aer Lingus.
Speaking on RTÉ radio’s Morning Ireland, Mr Walsh, who started in Aer Lingus as a pilot, added that he struggled to have sympathy with the pilots. Seeking a 24 percent increase was “way out of line".
The situation for Aer Lingus was extremely difficult, particularly when its financial performance was weak relative to other airlines in IAG, he said. Employee costs in Aer Lingus were already higher as a percentage of total costs.
“The situation for the management is simply extremely complex, and I see very little room for them to manoeuvre given the demands that pilots have made.”
Aer Lingus could not afford to pay “anything close” to the 24 percent being sought by pilots, he said. “The impact that it would have on the future financial performance of the airline would seriously damage investment or any future investment in the airline".
The situation for Aer Lingus was “very, very risky.”
“I'm sure all of the employees in Aer Lingus watching what's going on will be deeply concerned, not just for the impact that it is having on customers, but also for the potential impact that it could have on the future of the airline.”
Aer Lingus had been doing "a good job" until the pandemic which had significantly weakened the airline. Its performance was weak relative to other airlines in AIG, he said.
You have huge sympathy for customers who are planning to travel because the disruption looks like it could be significant and ongoing for some time.
“The prospect for future investment would be seriously undermined if Aer Lingus was to concede anything close to what the pilots are demanding.
“If you look at the cost base of the airlines, I think the thing that jumps out at me is that if you combine the employee cost and fuel cost in Aer Lingus, that represents 54 per cent of their cost base, which is much higher than the other airlines in the group. And there's two aspects - employee costs are 23 per cent higher than the average of the group.
"But the fuel costs, which traditionally are the highest cost element in their lowest cost base, are very much dependent on the aircraft, and if we don't get new aircraft and invest in new aircraft, well, then those fuel costs will increase as well. So the future does not look very promising if these costs are not addressed.
“A cost increase for pilots wouldn't just stop at pilots because you can imagine what the other employees would say. I think you could expect further disruption down the road just so other employees look to copy that.”
“It's going to be very difficult to see how this will be resolved. You have huge sympathy for customers who are planning to travel because the disruption looks like it could be significant and ongoing for some time.”
As a former pilot, Mr Walsh was asked if he had sympathy for the pilots. “I would struggle to have sympathy. I think looking for 24 per cent pay increase is way out of line with anything that I've ever seen before.”
Meanwhile, The chief executive of the Irish Travel Agents Association, Clare Dunne, has warned “this is going to get a lot worse” about the disruptions faced by Aer Lingus customers because of the dispute with pilots.
Ms Dunne told RTÉ radio’s Morning Ireland that people had been “very imaginative” in their efforts to continue with their holiday plans despite the cancellation of flights.
Re-booking flights
While Aer Lingus has been “extremely helpful” in assisting travel agents in getting flights re-booked, the issue remained of how those people were going to get home. Would they face the same problems on their return if the dispute was not resolved, she asked.
“This is only the first tranche, this first five days of the work to rule and that eight hour strike on Saturday. But this is indefinite. So you know what we've got here it's a cumulative effect. And they say they're going to keep on going.
“So this is going to get an awful lot worse if they don't get around the table and sort it out.”
Ms Dunne said that travel agents had worked extra hours last weekend to assist people hoping to get away on their holidays. “Our agents will continue to do that as long as it's necessary.”
*This article was corrected at 11am on July 1st, 2024
