The chief executive of Aer Lingus has called for Irish airports to be allowed to set their own charges.
Addressing the media following the airline's AGM in Dublin, Christoph Mueller said that in Ireland's darkest hour, when we urgently need tourists to visit, to increase airport taxes by 39% is 'insane'.
The airline boss said we could not talk about entrepreneurial behaviour or free market economics if big parts of the economy were still regulated.
Mr Mueller said Terminal 2 at Dublin Airport looks good, but it cannot develop itself into a job-killing machine. Worldwide, he said, airlines talk to airports directly, but here in Ireland airlines must talk to the regulator, who sets the charges.
Mr Mueller said that any further cost-cutting at Aer Lingus would be a result of the very weak performance of the Irish economy. He denied that further cost reductions, flagged by the company yesterday, were as a result of a multi-million euro settlement with the Revenue on foot of the botched 'leave and return' redundancy scheme.
Mr Mueller said the company would outline more about the cost reduction programme at the start of June. He said it would be going too far to compare another round of cuts to the last round of reductions, known as Greenfield, which cut €97m of costs.
Mr Mueller said that, under Greenfield, staff would not be approached for any further cost cuts until 2012, and the company was committed to that pledge.
As a result, he said, the company would in the first instance try to reduce its fuel prices, and it would go back to the Dublin Airport Authority and the Government to seek a reduction in airport charges. He said a 39% increase in airport charges could not be passed onto tourists and visitors.
Defending his own pay packet for last year, which topped €1.1m, Mr Mueller said targets had been exceeded and other management and staff had also benefited as a result through a gain-sharing programme. He said he and all other members of management had already taken a pay cut.
Mr Mueller said it was hoped the economy would come out of a trough next year and that this would compensate for increases in fuel prices and the impact of a strong euro. But in the meantime management had an obligation to watch costs, he said.
Chairman defends controversial scheme
Earlier, the airline's chairman defended its handling of a 2008 redundancy scheme, which led to payiment of a settlement of €29.5m to Revenue earlier this year.
Addressing shareholders at the airline's AGM, Colm Barrington said the 'leave and return' scheme was a major restructuring. He said that, despite the settlement, it had resulted in cost savings and work practice changes that turned the performance of Aer Lingus around.
The scheme saw 715 staff who were made redundant return to the company weeks later on inferior terms and conditions.
Mr Barrington said that, owing to an ongoing review by the board of the circumstances that led to the scheme, he could not comment further. But he said once the review was complete the board would discuss it further and take any action required.
But Mr Barrington, who was re-elected chairman at the meeting, did not commit to publishing the review findings.
Defending the company's decision not to pay a dividend to shareholders, Mr Barrington said economic conditions remain awful, fuel prices are increasing, the euro has strengthened considerably and the company is not 'out of the woods' yet.
He said it would therefore be premature to pay a dividend and to do so would be damaging to shareholders.
Ryanair, which is a major shareholder of Aer Lingus, has been making its voice heard at the meeting. Howard Millar, chief financial officer of Ryanair, questioned whether the company would be taking legal action against the lawyers who gave legal advice on the drawing up of the leave and return scheme, and asked if anyone had been fired over the debacle.
He also challenged the re-election of ICTU general secretary David Begg to the board, questioning his suitability and conduct - a challenge rebuffed by Mr Barrington. Mr Millar also called on the company to pay a dividend of €30m to shareholders.
