Aer Lingus cuts jobs and pay in a bid to save 97m a year

AER LINGUS, the Irish airline, is axing around 800 jobs as it seeks to save &euro;97m (&pound;90m) a year by 2011.<br /><br />The shamrock-crested carrier, which has fended off two hostile bids from Irish rival Ryanair &ndash; one of the most cost-efficient players in the industry &ndash; said it could not survive &ldquo;in a situation where staff are paid significantly more and operate less efficiently than comparable positions at its peers&rdquo;.<br /><br />New IT systems, updated working methods and a cut in the number of flights it runs will lead to 676 jobs going, while 100 staff have already been told their contracts will finish.<br /><br />The airline, which has been rapidly burning through its cash reserves, will cut the basic salaries of higher-paid staff, while all workers will see a drop in the allowances they receive.<br /><br />Aer Lingus has been struggling amidst slumping fares and high fuel costs.<br /><br />It made losses of &euro;73.9m in the six months to end of June, over three times the &euro;21.6m losses it made a year previously.<br /><br />Revenue fell to &euro;555m, down 12.2 per cent on the &euro;632m it made a year ago.<br /><br />Chief financial officer Sean Coyle said the airline was now bracing itself for staff anger and the possibility of strikes.