Tommy Broughan (Dublin North East, Labour)
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I welcome the opportunity to finally debate the critical threat to Aer Lingus jobs and our national strategic aviation connectivity. I have asked for this debate on this matter at least six times over the past three weeks. However, it is deplorable the Minister for Transport is not in the Chamber to respond to my questions.

The threat to jobs and working conditions at Aer Lingus is now serious. Aer Lingus management has reportedly set a two-week deadline for agreement on a €97 million per annum cost-cutting plan which includes the astonishing loss of 676 jobs in Dublin, Cork and Shannon.

This terrible news comes after an incredible direct haemorrhaging of several thousand aviation jobs over the past 18 months including at SR Technics, the Dublin Airport Authority and Ryanair. The loss of another 676 jobs, including 489 pilot, cabin crew and ground staff and 187 back office jobs, at Aer Lingus will be a hammer blow to communities in Dublin, Cork and Shannon already under severe pressure. I am sure most colleagues have heard from Aer Lingus workers who are shattered at the current proposals from Mr. Colm Barrington, chairman of Aer Lingus, and Mr. Christoph Mueller, chief executive officer.

Aer Lingus staff believe the current management plan could see pay cuts of up to 40% for remaining workers. IMPACT cabin crew representatives this afternoon told the Oireachtas Joint Committee on Transport that the new terms would see new cabin crew start on as little as €16,754 per annum, rising to an incredible €18,754 per annum. This is the yellow-packing of jobs at the airline.

Everybody, including staff and their representatives, acknowledges the massive difficulties in the aviation sector and the large and often painful changes that are taking place in this industry. The merger announced last week between British Airways and Iberia is an example of this. Aer Lingus management has posted losses of €93 million in the first half of this year when traffic volumes increased but fares fell. It has also blown €400 million of its cash horde in incredible bad management decisions.

The global and domestic recession has significantly impacted on the aviation industry. The suspicion remains, however, the current turmoil in the industry may be used by the new Aer Lingus management team to implement a savage and severe programme of cutbacks. There is already a disturbing move towards outsourcing at the company with the use of Astraeus crews on Aer Lingus planes flying out of Belfast.

Will the Minister enlighten us on the use of Astraeus airlines by Aer Lingus and how the terms and conditions of Astraeus crews differ from those of Aer Lingus workers? What did the Minister know about this development? Staff rightly fear this is the start of their replacement by contracted staff on massively reduced pay and working conditions.

More disturbing is the so-called Project Greenfield as devised by Mr. Christoph Mueller and Mr. Colm Barrington. A core part of this proposal is the transfer of Aer Lingus to the UK aviation register. More surprising is the fact that Ryanair is not on this register but the Irish one. Aer Lingus, in effect, will become primarily a British-based airline on the UK Civil Aviation Authority register with a negative impact on jobs and connectivity in Ireland. Has the Minister been briefed on Project Greenfield? Did he approve it through the three Aer Lingus directors he appointed to the board?

Two representative of Aer Lingus management told the committee on transport an hour ago that the Minister supports the loss of 676 jobs at Aer Lingus with the reduction of pay and working conditions for the 3,000 remaining workers. This will mean immense hardship for the people of north Dublin, Meath, mid-Leinster, Shannon and Cork. It is incredible that the Minister would support this and that Irish tax and legal social obligations could potentially be at least partially avoided at a company where the State has a 25% stakeholding.

Aer Lingus staff have already made many sacrifices through the implementation of a series of previous cost-cutting plans. In 2008 staff proposed 4% to 8% pay cuts and some senior and higher paid staff worked without pay for up to four weeks in order to protect key US routes including the Shannon to JFK route. It is unacceptable that the Ryanair and Irish Ferries model would be applied to Aer Lingus workers. This is a Ryanair takeover of Aer Lingus by stealth. Will the Minister explain in simple economic terms how Aer Lingus can run a transatlantic and global aviation operation on Ryanair-style, short-haul terms and conditions?

The Minister for Transport has the key responsibility for the 25% state stakeholding in Aer Lingus. He must immediately direct the Government's directors on the board to oppose current outsourcing practices, Project Greenfield and associated plans. The Minister and the Government must recognise the key employment and connectivity role of Aer Lingus in Ireland's core national interest, a role it has played in the past 70 years. The Minister for Transport, Deputy Dempsey, must stop this race to the bottom by Aer Lingus, which is becoming a pale imitation of Ryanair, because if this continues the company will have no future.

Dara Calleary (Mayo, Fianna Fail)
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This matter has been referred to the Department of Enterprise, Trade and Employment as it relates to jobs. I wish first to brief the House of the overall situation in regard to the aviation industry before dealing with the issues in regard to Aer Lingus.

The Deputy will be aware that the Tánaiste, on behalf of the Government, has taken a proactive role during this year to maximise and retain our skills base in the aviation sector following the decision by SR Technics to cease operations at Dublin Airport. Following that decision, the Government's priority was to take all possible steps to maximise the potential of the skills base and infrastructure at Dublin Airport and to retain as many jobs as possible in the sector.

The Tánaiste, therefore, immediately tasked IDA Ireland and Enterprise Ireland to work with SR Technics and other interested parties to find the best possible outcome for Dublin. The two State agencies then engaged additional aviation sector expertise and set about establishing a team to market the Dublin operation internationally through their overseas office network. They received a total of 16 expressions of interest in the facility, each of which were contacted to evaluate their level of interest in the operation and to encourage and, where possible, assist them in putting forward investment proposals to take over all or part of the operation.

In addition, SR Technics received more than 30 direct expressions of interest in the operation, subsequently receiving five bids from interested parties for parts of the business. I understand that following this process SR Technics subsequently negotiated and reached a provisional agreement with a bidder for the sale of the APU and landing gear assets. However, it transpired that the bidder planned to remove the assets from the country, which would have had a terminal effect on the continuation of a maintenance, repair and overhaul, MRO, business in Dublin. Following direct intervention by the Tánaiste, a reversal of that decision by SR Technics was secured and a subsequent bid from Dublin Aerospace Limited, an Irish based company, for the APU and Landing Gear assets was accepted. The Government, through Enterprise Ireland, assisted that bid.

On 2 September, the Tánaiste formally announced the establishment of Dublin Aerospace Limited as a new aviation maintenance provider at Dublin Airport. The company plans to provide 226 jobs within five years with the support of the Government through Enterprise Ireland. Dublin Aerospace Limited aims to establish a best-in-class MRO facility at Dublin Airport, servicing APUs, landing gear, base maintenance and training.

I should also point out to the House that the garage business unit of SR Technics has been successfully taken over by the M50 Truck and Van Centre, who secured the Airside vehicle maintenance contract from SR Technics. In addition, I understand that SR Technics is to continue to operate the line maintenance contract for Aer Lingus until such time as a suitable alternative operator is identified and agreed as acceptable by both companies.

I want now to refer directly to the issues raised by Deputy Broughan in regard to Aer Lingus. In terms of the ongoing restructuring of Aer Lingus, it is clear that the company intends to make a significant number of redundancies across its operation. My Department has to date been notified of redundancies of 676 employees, including ground services, cabin crew and pilots. These redundancy levels are on the basis of agreement being reached on the company's proposed restructured business model. I understand that portions of these are also to be achieved through the outsourcing of various activities at the airline. This is, as pointed out by Deputy Broughan, understandably a difficult time for the employees of Aer Lingus to be affected and I understand that engagement between management and the unions is ongoing.

A sustainable Aer Lingus operation based in Ireland and competing with other airlines for business to and from Ireland is in the best interests of Irish passengers, the Irish economy and airline employees in the long term. I draw the Deputy's attention to the statement made during the week by the National Implementation Board and to my response to a parliamentary question on legislation to protect employees which was tabled by another Deputy. I assure the Deputy that the Government remains fully committed to the aviation sector and to supporting a vibrant air passenger operations based in Ireland.