Aer Lingus pilots face a 10% pay cut, reductions in overtime payments, increased pension contributions and more flexible work practices under the findings of an arbitration tribunal.
However, arbitrator Kieran Mulvey has also recommended the establishment of a fund of up to €30m for productivity incentives for staff, though those funds would not be released until the airline returns to profitability.
Last October, Aer Lingus announced it was seeking cost reductions of €97m per year, with €74m of that to be secured through cuts in staff costs, including almost 700 voluntary redundancies.
Outline agreement on a cost-cutting package was reached with other grades in intensive talks at the Labour Relations Commission before Christmas. However, talks with the pilots' union IALPA broke down.
That dispute was referred to the Chief Executive of the Labour Relations Commission Kieran Mulvey, sitting as an arbitration tribunal.
In his decision, Mr Mulvey recommends cuts of 10% in pay and overtime rates. He says that increments should be foregone.
The number of flying hours for pilots without overtime, known as performance pay, should be increased from 570 to 620 hours a year. Up to 76 pilots may take redundancy.
When other elements are included, Mr Mulvey calculates that the overall savings package comes to almost €30m.
He says that revised terms and conditions for future recruits should be the subject of further negotiations to be concluded by 1 May, but stresses that that deferral should not impede acceptance of other elements of the decision.
Regarding the airline's plan to revise its pension scheme, Mr Mulvey points out that if the pilots have conceded benefit reductions, Aer Lingus should continue to contribute 21% of salary to the pension scheme.
He also refers to the removal of the threat of costly legal proceedings being taken by the pilots union to make Aer Lingus fund the deficit in the pension fund. Mr Mulvey also recommends renegotiation of certain collective agreements to be completed by 21 January.
He urges the airline to set aside a fund of between €20m and €30m to provide phased productivity incentives to all staff including pilots, though those funds would only be released when the airline returned to profitability.
Aer Lingus thanked Mr Mulvey for his work in this arbitration process, particularly over the holiday period. The airline will now consider his findings fully and thoroughly.
A spokesperson for IALPA said it would be inappropriate to comment publicly until such time as the members had considered the document. The pilots will hold a general meeting on Thursday.
