Aer Lingus 'reluctantly' accepts expert panel recommendationsFriday 27 June 2014 18.19
Aer Lingus has "reluctantly" accepted the recommendations of an expert panel on how to solve the row over the deficit in its pension scheme.
The purpose of the expert panel was to try and find a solution to the pension row at the airline after unions and management failed to implement recommendations issued by the Labour Court in January and May.
The airline's chief executive Christoph Mueller said the implementation of the solution will be very complex and will require a concerted effort by all of the parties concerned.
Mr Mueller said the solution recommended by the expert panel involves a significant increase in payments from company.
Aer Lingus said it intends to increase the initially proposed €110m payment into the company's pension scheme to €146.7m for current employees.
It will also make a further payment of €44m, up from a proposed payment of €30m, for deferred members of its pension scheme - employees who have yet to reach retirement age.
"Aer Lingus reluctantly accept the increase in payment recommended by the Expert Panel on the basis that the panel's report represents a full and final solution capable of acceptance by all the parties and would definitively address the funding issues in the IASS," the company said in a statement.
It said it believes the report from the expert panel represents a proposal which, if implemented in a full and timely manner, could mitigate the significant industrial relations and other risks related to the funding difficulties faced by the Irish Airlines Superannuation Scheme (IASS).
"In addition, the recommendations would place pension provision for current and former employees on a significantly improved and more stable footing than would otherwise be the case if the Scheme were to be wound up in the absence of an agreed solution," it added.
Before seeking shareholder approval, Aer Lingus said it will engage directly with ICTU and trade unions on the expert panel's recommendations.
"A significantly improved industrial relations environment is also a key requirement and a functioning internal dispute resolution mechanism must be established for this purpose. We strongly encourage all parties to work collaboratively to achieve these goals," Mr Mueller said in today's statement.
Aer Lingus shares closed 4.3% higher in Dublin on the back of the announcement.
Minister for Transport Leo Varadkar said he welcomed the airline's "significant response" as well as the statement from the DAA.
“The panel’s report provides the best and last opportunity to resolve the long-standing difficulties in the IASS," he said.
"I now urge all other parties involved to also accept the panel’s recommendations.”