Aer Lingus imposes pay freeze in cost-cutting plan

Aer Lingus has imposed an immediate pay freeze on all staff until a cost-cutting plan has been implemented.

Even though employees were promised increases totalling 7.5 per cent under the "Towards 2016" pay agreement between employers and unions, the airline said they will not be paid until an agreement is reached on cost-saving measures.

Staff were due a 2.5 per cent increase yesterday and another next April plus a further 2.5 per cent annual increase under "Towards 2016".

The cost cutting plan, known as PCI (Programme for Continuous Improvement), was first signalled a year ago as part of the company's defence against a takeover bid by Ryanair. It aims to generate up to €20 million annually in labour cost savings and possibly €10 to €15 million more in other areas.

It was presented to unions in December 2006 and endorsed by the Labour Court in March 2007.

Aer Lingus chief executive Dermot Mannion said the freeze would stay in place until a new deal was struck with unions.