There are fears of significant cost cuts and possible job losses at aircraft maintenance company SR Technics, after Aer Lingus announced that the company was retaining only one of its four maintenance contracts with the Irish airline.
Aer Lingus has confirmed that it is retaining SR Technics for its line maintenance contract for the next 10 years.
However, SRT Technics has lost three other Aer Lingus contracts. Fears are now mounting that there may be job losses at the company.
Last year Aer Lingus announced that it was putting its four aircraft maintenance contracts out to tender - line maintenance, airframe maintenance, components, and wheels and brakes.
It was known that SRT could survive the loss of some of the work, but that if it lost line maintenance, the viability of the Zurich-based company's branch in Ireland would be in doubt. This could lead to a potential loss of up to 1,500 jobs.
SRT's retention of the crucial line maintenance contract is relatively good news. However, the loss of three other contracts raises questions about cutbacks - and some sources have speculated on the possible loss of up to 200 jobs.
An internal document seen by RTE News says SRT needs €9.8m of investment in 2008 and a further €12.5m over the following four years. The company is targeting a minimum annual cost reduction of €5m, and plan to achieve this by a 'hiring freeze and head count reduction'.
The document points out that funding for a redundancy plan is not available. It warns that conditions of employment concessions must contribute significantly to the €5m target.
If that can not be achieved, a pay freeze from April 2008 - which would generate full year savings of €2m - must be considered, the document adds.
Staff working conditions to be targeted for cutbacks include extending the working day, company holidays and annual leave. The company would also focus on sick leave payments, overtime, rosters, and contract cleaning.
A spokesperson for SRT said the company would now be reviewing its operations in light of the Aer Lingus decision, but not comment on possible implications at this time.
Meanwhile, Aer Lingus says it is talking to Sabena Technics/TAT Group in France for the base maintenance contract, Lufthansa Technik in Germany and Honeywell International for components maintenance and Goodrich Corporation in the UK for wheels and brakes maintenance.
Meanwhile, SIPTU shop stewards at Aer Lingus were meeting at Dublin Airport to discuss the possible industrial dispute on Monday. Aer Lingus has threatened to suspend SIPTU staff members who refuse to co-operate fully with new cost-cutting work practices which the company is introducing on Monday without full union agreement.
SIPTU, which represents about 1,700 ground staff, has accused the company of provoking a strike and of failing to give unions adequate information about the implications of the proposed changes. The shop stewards will be discussing whether there is any possibility of avoiding the dispute and how they will react if staff are suspended on Monday.
