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AppendicesAppendix ISubmission from the Aer Lingus Craft Group of UnionsDestination the Future:A New Flight Plan for TEAM Aer Lingus
THE CRISIS THE FINANCIAL STORY1 Total turnover over the past three years to 31st March 1994 — £307 million. 2 Foreign earnings over the last three years — £147 million. 3 Team expect to generate 76.5% of future turnover from foreign sources. 4 Annual payroll is approximately £50 million with £35 million spent locally and £15 million paid to the exchequer. 5 While the company claims net losses of £56 million over the last three years, a closer examination of these figures reveals that the total severance/redundancy costs included in this are £28m, stock and equipment write down of £16.5m and bad debts at £8.6m, which totals £53m. The redundancy and write-offs should be the responsibility of Aer Lingus because: A They were necessitated by decisions taken within Aer Lingus in connection with the restructuring of the group e.g. change of fleet B The values placed on assets and liabilities transferred by Aer Lingus to Team Aer Lingus three years ago did not take account of the likelihood of these events. 6 The company has incurred finance charges over the three years of IR£12.5 million due to inadequate equity funding. 7 The company has generated operating profits of £1.75 million in the last 3 years. If we exclude bad debts, this rises to an operating profit in excess of £10 million. 8 These results were sustained during one of the worst trading periods of aviation history. 9 The management accounts show the company’s sales for April 1994 ahead of budget by 39%. 10 One of the principal reasons for the company running out of cash is managements’ failure to collect from overseas debtors. THE STATE OF PLAYIn June, Team Aer Lingus will run out of money unless we resolve the present crisis. That will mean: • No wage payments. • We will not be able to trade. • There will be no equity injection by Aer Lingus. • It could signal the tragic end of one of the country’s largest and most prestigious companies. • 1900 core jobs would go with hundreds of knock-on lay-offs. • An annual £50 million per year would disappear from the local economy with £15 million being lost in returns to the exchequer. • Foreign revenue of over £40 million per annum would be lost. • It would cost £20 million per year in social welfare payments. • It would be a Digital-scale disaster multiplied by two and a half times. At present the management of Team Aer Lingus has forced us into a conflict on issues which, even if resolved, will not come near solving the company’s growing problems. Our livelihoods and those of our families hang in the balance. We want to move forward. We want management to tackle Team’s core problems. We agree with the board of Aer Lingus that a comprehensive and integrated rescue plan with a short and long term focus must be drafted and agreed. Staff have been flexible and realistic in the past. In March we agreed landmark changes saving £14 million and giving the company unprecedented functional flexibility and mobility. In the last two years our total investment in the company based on cost savings and increased productivity comes to a staggering £34 million. Our only return for that has been accusations of inflexibility and an uncertain, bleak future. We will continue to make sacrifices where necessary but only as part of a market-led rescue plain and based on some tangible acknowledgement of those sacrifices. Many of the previous management team have moved on and with the welcome arrival of our new Chief Executive, we have an opportunity now to build bridges of cooperation and partnership. We have many groundbreaking ideas on how to achieve further cost savings, greater productivity and increased business. We have researched and discussed ways of harmonising relations between workers and management. We know it will mean change. Change for us, our work practices and our relationship with Team Aer Lingus. But it will also mean change for the company. Increased focus on sales and marketing, new product lines, better quality customers and a restructuring of procedures and accountability. THE NATURE OF THE CRISISManagement defines the solution to the Team Aer Lingus crisis in short-sighted and exclusively internal terms. But in reality there are many factors at play. FACT They have failed to react to changes in the market which have caused a downturn in business. The arrival on stream of new competitive facilities and the stagnation in the airline passenger business has caused the selling of excess maintenance capacity worldwide. FACT Opportunities for new business and different kinds of business have been ignored or mismanaged. FACT The £25 million equity commitment secured on the basis of the Cahill plan is an illusion. The full £25 million is already earmarked to be repaid in full in respect of
FACT Incredibly, progressive staff proposals on some cost-savings initiatives and increased productivity have been blocked. FACT The company is owed in excess of £17 million most of which management can’t collect from customers around the world. FACT Team’s restructuring plan of June 1993 which formed part of the Cahill Plan submitted to Government was fundamentally flawed. It did not provide for the loss of the Aer Lingus 747 fleet and other business. It did not make adequate provision for certain payroll, severance and other costs leading to a requirement to borrow in excess of £15 million at harsh commercial rates. FACT £12.5m of the £25 million was to fund a severance programme in the company. This figure was totally inaccurate. To date management have committed to spend £28 million on early retirements, mostly their own. FACT Aer Lingus has refused to inject the £25 million until management present a revised, comprehensive, integrated and realistic business plan. FACT Independent analysis tells us that management’s latest rescue proposals are hopelessly inadequate focussing entirely on achieving cuts in earnings. This is a knee-jerk, panic response to internal rather than external and overview factors. FACT Even if we accepted this strategy, contrary to what management have guaranteed us, independent analysis tells us that our jobs cannot survive. The package will not come near saving and securing Team Aer Lingus. FACT The company does not have a coherent market-based plan which is focussed on restoring profitability and addressing the cash needs of the business. FACT Added to that, trading with Aer Lingus will drop from 50% to 23.5% of total sales. The future of the company depends on the cooperation and interdependence of 3 key players — Management, Workforce and Aer Lingus. FACT £12.5 million of the £25 million was to fund a much-needed investment programme in the company. That crucial money is not now available. FACT Our wage structure is one of the lowest in Europe. Further wage reductions will not make TEAM more effective — increased investment in vital technology will. TEAM - HOW IT HAS EVOLVED1936 The Technical Division of Aer Lingus run by Johnny Maher consists of a small set of passenger steps fitted with pram wheels, a biscuit tin of spare parts and a locally manufactured battery cart. Aer Lingus offers its first flights from Dublin to Bristol in association with Blackpool and West Coast Air Services. In September the first service to London is launched. Aer Lingus buys a DH 86A aircraft and a second Rapide aircraft. Most of the overhaul is carried out by cross chanel firms. 1937/38 As air travel becomes more popular, the company carries 2,908 passengers. A fourth aircraft, a DH86, is bought. Many Air Corps technicians now join the company full-time. Most technical problems stem from the canvas and wood bodywork on early aircraft. 1939 3,810 passengers leads to the acquisition of two Lockheed 13s which signals the end of the wood and canvas fuselage. A decision is made to concentrate airline purchase on the DC3s, new to the market. Just as a new era looks ready for take-off Britain declares war on Germany. 1940 Purchase of the first DC3 in California. Aer Lingus moves from Baldonnel to Dublin Airport. 1939 - 45 With the emergency, flights dwindle to two per week and in 1944 they are finally suspended for 5 months. The technical division is as quiet as any other sector of the airline. 1946 Aer Lingus buys 10 DC3s and its Technical Division embarks on a recruitment drive to keep pace with service demand. The ending of the war sees civil aviation develop over the following years into a major worldwide industry. 1953 Aer Lingus takes a first step towards today’s Team by winning a certificate of approval from the British Air registration Board to manufacture components for the B170 aircraft for the Bristol Aeroplane Company. Early 1950’s An extension to Hanger 2 is completed. The Technical Division grows rapidly mirroring the growth of Aer Lingus proper. AUGUST 1951 The airline carries its one millionth passenger. 1954 The first of a series of Viscount 707s and 708s are introduced. 1957 Over 3 million passengers have travelled with Aer Lingus. 1958 Aer Lingus becomes the first non-Dutch company to purchased aircraft from Fokker. A fleet of Fokker Friendships goes into service. 1959 3 Boeing jetliners are acquired for trans-Atlantic service. 1960 Aer Lingus begins doing airline maintenance for Pan Am and other airlines in Shannon. 1961 A jet hanger to house the new Boeings and workshops is completed The company launches its apprenticeship scheme for maintenance and engineering posts. Successful applications spend five years studying engineering, science, mechanics, workshop technology and electrical engineering. 1965 A second jethanger is provided by expanding hanger 4. Early 60s As Aer Lingus grows and develops, a strain is put on communications between staff and management. 1966 The Production Department sets up a Works Council consisting of elected staff and management which meets once a month. More emphasis is placed on training and education. Late 1960s These years see major investment in jet engine overhaul facilities at Dublin Airport. The company begins to replace its large fleet of Viscounts with a smaller fleet of new Boeing 737s which require less maintenance. This leaves surplus capacity which Aer Lingus begins to try to sell to other airlines. This policy was to lead to the eventual setting up of Team Aer Lingus. 1969 First completed jet engine overhaul completed. 1970 ALERT — Aer Lingus Engineering Reliability Technique is introduced. This means that the ‘life’ and ‘performance’ of systems and components can be evaluated and recorded. Maintenance wins two major international contracts — Indian Airlines and Trans Polar Services, Norway. 1971 The maintenance department is now maintaining a fleet of long-range Boeings twice the size of the Aer Lingus fleet. 1975 By now over 40 airlines are using what has been renamed — the Aer Lingus Maintenance and Engineering Department. 1976 Aer Lingus buys a subsidiary — Aviation Traders (Engineering) at Standstead Airport. Early 1980s The end of the expansion years of the 70s puts the future of maintenance and engineering in question. Further expansion versus stagnation is hotly debated. 1981 A decision is taken to expand, Aer Lingus buy Aermotive Ireland as a specialist jet engine overhaul company. Other subsidiaries include DevtecLtd, Shannon Repair Services and Aplex Trading Ltd. 1985 Aer Lingus becomes the world’s largest supplier of aviation services to the African continent. 1986 Aer Lingus celebrates its 50th birthday. By this time the Maintenance and Engineering Group are bringing in revenue of £100 million and providing services to every continent but Australia. 1988 The Company begins another fleet replacement programme and once again it looks as though there may not be enough work for the 1600 staff of Maintenance and Engineering. A radical decision is taken. An investment programme is announced, a new giant hanger is to be built, with the cooperation of the workers major improvements in quality and productivity are introduced all under the wing of one exciting new company — TEAM AER LINGUS. THE IRISH AEROSPACE INDUSTRYNational Aerospace TaskForce Report May 1992 The following extracts from the above report give a clear overview of the principal trends in the International and Irish Aerospace industries. THE INTERNATIONAL AEROSPACE INDUSTRYThe world aerospace industry can be broadly divided into three segments: • Civil aeronautics, • Military aeronautics and • Space activity. The developments in military aeronautics have no direct impact on Ireland. The civil aeronautics segment is characterised by enormous up-front costs and long pay-back periods. This has increasingly forced even the largest manufacturers to form joint ventures and consortia. The most significant recent developments in the civil aeronautics segment have been the major dip in passenger demand following the Gulf war, the recession and the ending of the Cold War. In particular, reduced orders in the military aviation field following the ending of the Cold War have diverted the attention of the major manufacturers from the military sector to the civil sector. All of these factors are likely to lead to an extremely competitive civil aeronautics segment, at least in the short-to-medium term. Despite this the prime manufacturers are still optimistic that the high level of annual deliveries achieved in the late 1980’s will continue throughout the 1990’s. In the space segment, the single most significant development is the growing dominance of Europe. Ireland, through its membership of the European Space Agency, is well positioned to take advantage of this. THE IRISH AEROSPACE INDUSTRYThe Irish aerospace industry is dominated by the activities of Aer Lingus and GPA and their subsidiary and associate companies. As a result, it is concentrated around two ‘hubs’, one at Dublin and the other at Shannon. The Irish aerospace industry falls into three relatively distinct segments. • The maintenance, overhaul and repair segment is by far the most significant with total employment of some 3,500 people. • The manufacturing segment is less developed with total employment of 600. • The final segment, international services, employs 800. The aerospace industry as a whole, therefore, employs a total of 4,900 people. In addition, there are approximately 8,300 employed in the airlines and other related activities which are not dealt with in this document. The Aer Lingus group had revenues of £786 million in 1991 and employed 12,261 people (7,305 in Ireland). The airline now operates 34 aircraft. Aer Lingus companies like Team Aer Lingus maintain aircraft; others like Airmotive Ireland repair and overhaul jet engines, while companies like PARC Aviation provide skilled aircrew and other personnel to world-wide customers. GPA, together with its affiliates, is the world’s largest aircraft operating lessor. It manages a portfolio of over 400 modern aircraft, with 100 airline customers in 47 countries and has annual revenues over $2 billion. The companies within GPA’s sphere of influence includes Shannon Aerospace (airframe maintenance), Shannon Turbine Technologies (engine component repair) and its other ventures (spare parts distribution, aircraft painting and refurbishment and engine support). These will provide the impetus for the World Aviation Park sponsored by Shannon Development. For the purposes of analysis the sector falls into the following three distinct segments (Appendix provides a detailed list of the companies operating in each of these segments): •Maintenance, Overhaul and Repair •Manufacture •International Services The development of each of these segments is described in detail in the following paragraphs. MAINTENANCE, OVERHAUL AND REPAIRTeam Aer Lingus, employing 2,000 in its new facility at Dublin Airport, supports the aircraft fleet of Aer Lingus and outside customers, and is well poised to capitalise on its reputation for quality and cost efficiency to secure more business. Shannon Aerospace will initially maintain and paint Boeing 737 and MD 80 aircraft, and is due to open in September 1992 with an employment potential of 1,000. Airmotive Ireland repairs and overhauls jet engines while PWA International and SIFCO re-manufacture and refurbish engine casings and engine turbine components respectively. Shannon Turbine Technologies will also become involved in similar activities on high pressure turbine components. These companies currently employ 900, and have a potential employment of 1,500. Other companies such as SRS Aviation and GPA Expressair provide painting, maintenance and repair services on a variety of aircraft to a large range of customers. In total, the Maintenance, Overhaul and Repair segment now employs approximately 3,500 people. MANUFACTUREThis is a much smaller segment than Maintenance, Overhaul and Repair and has a mix of overseas and domestic companies involved. The overseas companies are involved in a fairly diverse range of activities with, for example, Garrett (Waterford) making jet engine blades, Moog (Cork) hydraulic actuators, and Acromil, which has recently established a manufacturing facility in the World Aviation Park in Shannon, manufacturing airframe components. Irish companies such as Hito and Engineering & Design make aircraft parts for Boeing. There are a number of small companies involved in the various design and manufacture programmes of the European Space Agency (ESA). Examples include Devtec which designs and manufactures parts for the Ariane rocket engine, and Farran Technology one of a number of companies manufacturing sophisticated systems for ESA. In total, the manufacturing segment now employs approximately 600 people. INTERNATIONAL SERVICESA number of Irish companies provide international services to the world aviation industry. The paramount enterprise in this category is, of course, GPA, the aircraft leasing company, which now manages one of the largest aircraft fleets in the world Following GPA’s success, other companies such as IACO and IAS have established aircraft financing operations in Ireland. Aer Lingus and Aer Rianta also offer consultancy services to developing countries. The soon to be established Irish Aviation Authority also has potential in this area. A number of aerospace companies have located in the International Financial Services Centre in Dublin, including Airbus Industries, Aircraft Management Services Ltd. (T.A.T.), GPA Capital Dublin Ltd. and Orix Ireland Ltd. Ireland also has a strong position in international aircrew leasing and placement, with PARC Aviation being one of the largest companies in this field in the world. In total, this segment now employs approximately 800 people. OTHER ACTIVITIESAer Lingus employs approximately 5,000 people in its passenger, freight and related activities in addition to those already mentioned. Aer Rianta, the airport authority, is spreading its commercial activities into East Europe and elsewhere. Similar developments are expected from the yet to be established Irish Aviation Authority. There is also employment in other airlines, flying clubs and the Army Air Corps. However, the Task Force did not examine the companies, segments and issue under this heading and they are not dealt with further in this document. Altogether these organisations employed approximately 8,300 people in 1991. HISTORIC GROWTHSince 1980 the aerospace sector in Ireland has grown from an employment base of 2,200 to 4,900 today, an increase of 123%. The employment performance of the three main segments over this period is summarised as: Employment Performance 1980 — 1991
THE SOLUTION FOR FURTHER INFORMATION CONTACT DENIS SMYTH TEL: 705 2017 / 088 542 072 c/o TEEU, 5 CAVENDISH ROW, DUBLIN 1 TO STEPS TO A NEW TAKE-OFFThe problems we face are not unsolvable. The current atmosphere needs to be changed from adversarial to one of mutual trust and common purpose. The stakes are too high to allow the conflict to continue. We offer the hand of cooperation and friendship. We are determined to bring about the radical changes necessary to save and develop Team Air Lingus. Here are, what we believe to be, the essential steps necessary to do this. STEP 1 For the immediate survival of the company, Aer Lingus should inject the full £25 million committed under the Cahill Plan and leave it in the company — not take it back immediately as planned. STEP 2 Management must implement the March 1994 Agreement in Full — thereby saving £14 million in the financial year 1994/5. STEP 3 Management and workforce to commission and contribute to a viable joint development plan for TEAM under the new CEO, Donnacha Hurley. STEP 4 The current productivity, measurement system shows an increase of 50% over 1989 levels. This equates to savings of £10m annually of which the staff share is £1.5 million. We suggest that another 50% increase is possible with the establishment of jobtime standards. We want immediate steps to ensure the introduction of proper job time standards. Only by doing this, will it be able to tender for work on a realistic basis and later to control and schedule the workforce in completing contracts. STEP 5 As cashflow is a major problem, steps must be taken to ensure that customers are invoiced correctly and on time and that all monies owed are paid within agreed credit terms. STEP 6 Agreements have cleared the way to stop outsourcing valuable work from TEAM Aer Lingus. Over 50% of this work, worth £4 million, could be completed in-house at TEAM. STEP 7 Take immediate action to recover the £17.5 million of debts owed to TEAM by European and African airlines. STEP 8 We need to urgently develop new Markets and new products (see market insert) for 1995/6. Without this action there will be no future for TEAM. STEP 9 We look forward to a fresh and positive beginning with our new CEO, Donnacha Hurley. We agree with Mr. Behan that a new, competent and experienced management structure must be built so that we can all go forward together with trust and commitment for a brighter future. STEP 10 We believe that equity participation should be granted immediately to all Team Aer Lingus Staff. Labour/management relations at Team must be solved if we are to journey together on a flight plan to survival and security. The atmosphere must change from adversarial to cooperative. In countless examples around the world and specifically in the aviation industry, worker participation programmes have resulted in harmony, increased competitiveness, greater productivity and higher profits. It’s time that we all became a true ‘Team’ Aer Lingus. The workforce have born the brunt of cost savings and face a request for more. The workers have effectively invested £34 million (£14m recently) in the company with nothing to show for it but a bleak future. As a matter of justice and in line with the Government’s thinking, it is reasonable to seek a share of the equity of the business and a right to be part of the decision-making process at the highest level. We are more than anxious to play a meaningful part. THE MARKETIn 1991 the management of Team Aer Lingus identified their market niche— C+D checks for ageing aircraft, mainly Boeing B747 and B737. The management believed that when it came to Quality, Turnaround & Cost, they had a competitive edge. Quality refers to standards of work and Team has a very high reputation in this area. Turnaround refers to the number of days needed to service an aircraft. For example, for every day a jumbo is grounded, it costs the owners $100,000. Team Aer Lingus has a good reputation on turnaround. Cost refers to the number of hours multiplied by the cost per hour plus parts. It is in this area that management claim that Team is now uncompetitive. They claim that the market has fundamentally changed over the past six months and that instead of being able to charge $60 per hour, they can get only $45 or less. WHAT REALLY HAS CHANGED?The management tell us that the recession has reduced the size of the market. We accept that the Gulf War did cause a recession but that is over now. Aer Rianta reported an increase in passengers for 1993, though Aer Lingus share of the overall market has dropped. THE MANAGEMENT TELL US THAT THE PRICE HAS DROPPED IN THE MARKET.When quality and turnaround are equal this is predictable. We accept that the price has dropped and this is one reason why our group agreed to give £14 million in wage cuts (cost reductions) and also agreed to work with the management to improve our productivity to further reduce costs and regain a competitive edge. The price of labour has not dropped by any significant amount over the last six months. THE MANAGEMENT SAY THAT COMPETITION IS INTENSE AND GROWING.Many new companies entered the market over the past number of years and we are aware that competition has been intense. However, several of these companies have now suffered substantial losses and have quit the market. ARE THERE NEW MARKETS THAT TEAM AER LINGUS CAN EXPLOIT?Yes. When Team Aer Lingus identified the ageing aircraft market they were right, but that market has now fundamentally changed. When Boeing designed the B747, they never expected it would last 20 years. Boeing has had to call up many modifications to be carried out to a deadline which is now fast running out. These include: •The Floor Beam Modification •The Lap Joint Modification (5 million work hours) •The Section 41 (9 million work hours) •The Pylon Modification (15 million work hours) •Cargo Conversions: This applies to B747 and B737 New Technology aircraft. In the case of B737 these conversions are done after, rather than, during manufacture. When a company leaves an aircraft in to be serviced, much like your car, it is an inconvenience. Some of these modifications, for example the D Check, take six weeks. Airlines naturally want to get all modifications completed during the same downtime. The fact that Team Aer Lingus doesn’t offer Section 41 or some other of these major modifications, is a major weakness because airlines will go elsewhere. It stands to reason that in order to compete, Team Aer Lingus must move into the modification business. Management is refusing to take this step. THE UNIONS - OUR TRACK RECORDThe Craft Group of Unions at Team Aer Lingus has been painted by previous management as inflexible, militant and uncooperative. This propaganda was used to put vulnerable workers under pressure so that cost cutting of their earnings could take place. The irony is that our record is one of realism, openness and a willingness to make sacrifices for the good of the company. The media has reinforced this unfair view while we don’t have the adequate resources to tell our story. Here we set the record straight: FACT Following intense negoriations with management in March of this year, we agreed massive changes in work practices, a multiplicity of shift arrangements, and functional flexibility and mobility which, if implemented by management, will amount to savings of £14 million. FACT For 20 years, our unions have shown dynamic leadership pushing for cost-saving changes, increased productivity and higher competitiveness. FACT In 1987 we insisted on and part-funded the cost of an independent international study on productivity at Team Aer Lingus. FACT We presented management with ‘Trade Integration’ which meant that the workforce went from 11 grades down to just two — mechanical and avionic. This paved the way for the development of Team Aer Lingus. FACT Because of our commitment, productivity has increased by 50% since then. We believe that with a cooperative management, this could be improved even more. FACT As an example, on our own initiative, we managed to reduce the total number of hours needed to perform a ‘Lap Joint Modification’ from 30,000 hours to only 10,000 hours. FACT We have consistently led the battle to improve performance. This has been through formal and informal avenues. FACT For the past four years, we have accepted the ‘bar coded clocking system’. This provides information on ‘real time’ and quantifies all inefficiencies and matters that require management intervention. FACT We have collaborated with management in the setting up of ‘productivity improvement teams’ and quality programmes for each business unit. These initiatives failed not because of resistance on our part but because of lack of support by management. FACT We are anxious to improve productivity to make Team more competitive. We would like to see the implementation of modern programmes like TQM, Deming, SPC, BPR and Benchmarking. FACT We have produced our own strategic plan for Team Aer Lingus. Analysis of this by other concerned parties have found it innovative and progressive. If implemented, this plan could save the company a further£14 million. PRESS CLIPPINGSCHARLES J HAUGHEY’S VIEWSpeech by the Taoiseach, Mr. Charles J. Haughey, T.D. at the Official Opening of TEAM Aer Lingus Monday 6 May 1991 at 2.30 pm It is a particular personal pleasure for me to open this gleaming new hangar and officially launch TEAM Aer Lingus, the new subsidiary company. One has only to look around to see that this is one of the most impressive and exciting developments in the industrial and technological life of our nation. I have followed the development of this project with a neighbourly interest and now that it is coming on stream I extend my sincere congratulations to Aer Lingus and in particular to all those in TEAM Aer Lingus who have been involved in bringing this impressive; high-tech project successfully to this stage. Aer Lingus has played an outstanding role in national development since its founding over 50 years ago. It has been the national flag-carrier in countries overseas, and has earned a high reputation for competence and professionalism in an extremely challenging and ever-developing industry. It has become a highly respected player in a global industry, but has remained intrinsically Irish. The contribution which Aer Lingus has made to technological development in Ireland, to the economic infrastructure and especially to the development of tourism has been immense. Not the least of the achievements of Aer Lingus has been its ability to adapt successfully to the cyclical nature of the aviation business. They have done this creatively by establishing other ancillary businesses to underpin and sustain the core air transport service, which is so important to the nation and which will increase in importance as we seek to compete in new, open European and worldwide markets. Very soon we will be the only country without a land link to Europe and will rely more than ever on the quality and reliability of our air transport links. These ancillary businesses have in general been an outstanding success for Aer Lingus and have fulfilled their role extremely well. The diversity of these ventures has been remarkable ranging from hotels to robotics, from hospital management to information technology services. The Government are committed to the progress and development of successful and profitable State companies, may of whom, like Aer Lingus, perform vital strategic functions in the national economy. The State founded these companies for particular purposes. We want them to be successful, and we are determined that they will have the opportunity to grow and develop and respond to the challengers of the marketplace. One particularly important achievement of Aer Lingus has been the way in which the company has developed a world role in the technology of aircraft maintenance and overhaul. Beginning with the early bi-planes and moving through all of the various phases of aircraft development to the massive jumbo jets. Aer Lingus has consistently maintained a high reputation for the safety and professionalism of its aircraft maintenance. These skills formed the basis of a diversified business which began in the early 1970s, providing technological services to the airlines of the world, culminating in this most impressive development, which we open today. TEAM crisis as cash runs outBy Elaine keogh TEAM Aer Lingus will run out of money, putting 1,700 jobs and the future of the four-year-old company on the line, within the next couple of weeks. The maintenance subsidiary of Aer Lingus, which is losing £1m a month, has also failed to complete its restructuring plan to secure a £25m equity injection from Aer Lingus. And a new report by financial consultants Fielding Flynn & Associates says even that cash injection would not meet the company’s needs. Commissioned by the Craft Workers Union to examine the restructuring plan and the problems facing TEAM, the consultants also found the restructuring plan of June 1993 submitted to Government to be fundamentally flawed. It did not provide for the loss of the Aer Lingus 747 fleet, which is being replaced, leaving even less work for TEAM staff. The loss of the fleet has led to 100 redundancies— also not included in the plan — which will have to be paid for out of the same £25m. FF & A says the entire equity from Aer Lingus is already earmarked to be repaid in full to Aer Lingus for loans advanced by them to TEAM. In fact, loans to Aer Lingus amount to £30m. This is in addition to £40m equity from the parent company. Other anomalies exist between what is proposed and what the consultants say is possible. These include discrepancies between the time (and therefore the cost) of contract work undertaken by TEAM and the actual time/cost at the end of contracts. These shortfalls, which have amounted to thousands of hours, were charged to Aer Lingus, according to Des Branigan of Social and Industrial Research. A former ICTU advisor, he was retained from 1982-88 by the Craft Workers Union and says Aer Lingus was effectively subsidising TEAM’s clients. The figures on TEAM’s performance on contracts show that in one instance the estimate was for 20,187 hours but the actual hours it took to complete the job came to 41,976. A communique to staff from John Behan early last week said the company has no work for a large number of people in June when it will run out of money. He said they must have the rescue package in place by then to allow the equity injection take place. The plan includes a 10 per cent pay cut, new work practices and a stronger management role for 250 technical supervisors. The alternative is, John Behan said, a huge lay-off of staff and a non-viable business. TEAM is living on a day-to-day basis and, without agreement on a viability plan, 600 summer redundancies are imminent. There are also fears among the workforce that when the company runs out of money the doors will be locked for the quiet summer months and they will be taken back on next winter on management’s terms and conditions. The company spokesperson confirmed that if there is no work the doors will be closed, but that a crisis in a company has rarely been so clearly signalled. Likewise, he said, the solution is equally obvious. The Craft Workers Union says it is considering its position in relation to the FF & A report. Denis Smyth says it is shocked at the findings. “Our confidence in current management’s ability is shattered and Bernie Cahill appears to be embarking on a policy of industrial terrorism,” he added. If there is no agreement on a viability plan by June, TEAM will have a serious cashflow problem and company sources say it will face a commercial crisis. Six hundred redundancies will follow and if there is still no agreement, sources say the alternative is to close it down. The future for TEAM, according to FF & A, requires restoration to profitability in the medium term, a minimum investment of £10m and an aggressive marketing and cost structure to allow it compete on the international market. With time and money running out and the possibility of demonstrations and Dail protests at any unilateral company action, newly-appointed chief executive Donnacha Hurley has an unenviable task ahead of him. United Airline workers agree to pay cutsBy Richard Tomkins In New York Employees of United Airlines, the world’s biggest airline, have agreed to take pay-cuts of up to 23 per cent in return for shares that will give them a controlling stake in the company, it emerged yesterday. They have also agreed to forgo wage increases for the next three years, take cuts in fringe benefits and accept changes to working practices that will together save the airline $5.2bn over the next 12 years, or $3.3bn in today’s money. In exchange, employees will get stock under an employee share ownership plan that will give them between 53 per cent and 63 per cent of United’s shares, depending on how the share price performs over the next year. The intended effect of the transaction - one of the biggest employee buy-outs - will be to achieve drastic cuts in United’s costs and enable it to fight back against low-cost carriers such as Southwest Airlines, which have been driving down fares on short-haul routes in the US and grabbing market share. Full details of the plan emerged as United Airlines filed its proposals with the Securities and Exchange Commission. The plan has already been agreed by labour unions and management but has yet to be approved by shareholders, who will vote on it in about two months.
Tony Andrews Gerald Greenwald: sought to ally fears of worker control The prospectus shows that the biggest pay cuts will fall on pilots. All have agreed to take a cut in hourly pay rates of 15.7 per cent, and those working for a new low-cost operation that will take over United’s short-haul flights will take a further reduction of 7.1 per cent. Maintenance crew and other blue-collar workers have agreed to a pay cut of 9.7 per cent and will also lose the 5 per cent rise they were due to receive next month. Like the pilots, they have also agreed to forgo pay rises for three years except on promotion, and will not get any “snap-back” to previous pay levels when the pay freeze ends. On top of the $3.3bn resulting from pay cuts and other benefit reductions, United expects to make other savings as a result of its decision to set up a low-cost, short-haul airline-within-an-airline dubbed “U2” - for example, through more intensive use of its employees and assets. The total of all savings over the next 12 years is estimated at $4.9bn in today’s money. United believes this will enable it to lower operating costs per available seat mile on short-haul routes by 30 per cent to 7.4 cents - only slightly above Southwest’s 7.2 cents - while continuing to offer frills, such as assigned seating and first-class accommodation. In a presentation to analysts yesterday, Mr Gerald Greenwald, the former Chrysler vice-chairman chosen by United’s unions to replace Mr Stephen Wolf as chairman and chief executive, sought to allay concerns in the investment community that the airline would be subject to worker control. He said the unions would nominate two of the board’s 12 members and have a say in the selection of four other independent directors. “But the company must be managed in a professional manner, and management is clearly not a role that they seek.” Mr Greenwald said the unions would, however, have the power of veto over asset disposals worth more than $1bn, over the selection of “inappropriate or inexperienced” board members, and over big mergers or non-airline acquisitions. United’s existing shareholders will get a basket of $25.80 in cash, $31.10 in debentures and $31.10 in preferred stock for every share they hold, together with half a share in the recapitalised company. The existing shares were $1½ down at $126¼ in early trading. Brussels to probe aid for airlinesBy Gillian Tett in Brussels The European Commission is to investigate the state aid which Portugal and Greecehave offered to their national airlines, TAP-Air Portugal and Olympic Airways. The investigation is likely to fuel the long-running row between member states over the Commission’s efforts to curtail state aid to airlines - a dispute that seems likely to gather pace with the announcement of a new state package for Air France in Paris this week. The Commission’s investigation into TAP follows the Portuguese government’s approval two months ago of a Es180bn (£687m) aid package for the airline, designed to bail out the loss-making group as part of a broader restructuring programme. This aid, which would absorb TAP’s Es124,4 debts, will be allocated in four tranches over the next four years, according to the plans submitted to the Commission by the Portuguese government. At the same time the Commission will examine the Ecu2bn (£1.51bn) of state aid that the Greek government has offered to Olympic Airways. This aid is to be split into two parts, with Ecu1.1bn designated to absorb Olympic’s previous debts and Ecu96m earmarked for future capital projects. Commission officials said yesterday the investigations into state aid for airlines were now almost standard policy, given the increasingly tough line that the Commission has taken in recent years towards state subsidies in European industry. Last December the Commission approved I£175m (£168m) aid for Irish carrier Aer Lingus after a similar investigation, although it insisted the aid could only be used to restore the company to financial viability and could not be used to distort the market. A more controversial investigation into the FFr1.5bn (£174m) of aid for Air France is under way, with results expected in several months. The question at stake will be whether the Greek and Portuguese aid represents a “one-off” attempt to make the airlines viable for future competition, Commission officials said. Although they insisted that “one-off” aid was still permissible, under Commission rules, aid that could seriously distort the market would not be permitted. Air France rescue deal ready to take offTHE French government said yesterday it was putting the final touches to a restructuring package for the loss-making flag carrier, Air France, which will include a large cash injection and fresh job cuts. Mr Christian Blanc, Air France’s chairman, is expected to announce the once-and-for-all rescue plan today after discussions with the airline’s unions. Mr Blanc’s predecessor, Mr Bernard Attali, resigned last November after the conservative government backed down in the face of a crippling strike over a cost-cutting plan. A statement from the office of the Prime Minister, Mr Edouard Balladur, said the state would subscribe to a recapitalisation in stages provided Air France’s employees agreed to a restructuring plan. The Budget Minister, Mr Nicolas Sarkozy, told a news conference that the state had “decided to do its duty” for the airline, which is expected to show a loss of around 7.5 billion francs ($1.3 billion) for 1993. He declined to confirm a report in the daily Liberation that Air France had asked for 20 billion francs ($3.4 billion) over three years. The afternoon daily Le Monde said French authorities had estimated that 10 to 20 billion francs ($1.7 to $3.4 billion) was required and that about 15 billion francs ($2.6 billion) was the figure being discussed. Whatever the figure, the European Commission will be eyeing it very closely. The EU Competition Commissioner. Mr. Karel van Miert, warning last month that Air France was “playing its last card”, said that the state aid would have to be accompanied by a viable plan to put the carrier back on its feet. — (Reuter) Air France cash plan likely to provoke EU rowBy Paul Betts in London and Gillian Tett in Brussels The French government is set to provoke a head-on confrontation with the Brussels authorities and European countries, including Britain, by agreeing to inject up to FFr20bn (£2.31bn) in Air France, the troubled French national airline. The government said yesterday it would approve a significant recapitalisation for Air France if the state-owned airline’s 42,000 employees and their unions approved a restructuring plan drawn up by Mr Christian Blanc, the airline’s new chairman. The government refused to give details of the recapitalisation and restructuring programme which the airline will unveil today. But it said Air France had asked for “a very large sum”. French government officials would not confirm press reports that the airline was seeking a. FFr20bn capital injection. “In the current state of things I cannot confirm this figure. I simply want to tell you that the state has decided to do its duty by Air France,” a spokesman said. EU row likely over Air France cash planAir France, which lost FFr7.5bn last year and has debts of FFr37bn, has been struggling to put together a restructuring programme to restore the airline to a competitive footing and return it to profit. An earlier restructuring programme involving 4,000 job cuts was rejected by unions and led to the resignation of Mr Bernard Attali, then Air France chairman, after the government refused to back his strategy. The latest restructuring attempt is not expected to involve compulsory redundancies, Both the French government and the airline’s new management have been at pains to avoid another politically damaging confrontation with the airline’s workforce and unions. Mr Blanc’s proposals are also expected to include eventual employee share ownership in exchange for wage cuts and other productivity improvements. The government indicated yesterday it would inject funds into the airline in tranches. The first would follow approval by the unions of the restructuring plan, and subsequent tranches would be subject to the successful implementation of the recovery programme. Air France, which has lost money since 1989, has already received state aid totalling FFr5.84bn in 1991 and 1992. The EU is currently investigating another FFr1.5bn aid package made last year. The EU has recently recommended an end to all state aid for European airlines, but has agreed to allow financially strapped national carriers to receive one last package of state support as long as they launch a thorough restructuring programme. Openness needed to save jobsTHE management of Aer Lingus has come in for much of the blame for the precarious state of the company. And certainly the directors of Team Aer Lingus would seem to be acting with very little sense in issuing protective notice to its 2,000 staff at Dublin Airport. The company is involved in airline maintenance and refurbishment. The union have been told by the company that, because of the downturn in international market, all staff would be placed on protective notice from tommorrow. The company claims this is necessary because of the unions’ negative attitude. The proposal is that all staff work three out of four weeks for the summer period. But who can blame the unions for refusing to participate in what they term piecemeal negotiations, until the entire viability plan for Aer Lingus is on the table. When, in March, Bernie Cahill was appointed executive chairman and set up a task force to put together a recovery plan, we made the obvious point that it was heading for trouble. The main union involved, SIPTU, insisted the Government must indicate the size of equity before they would agree a recovery programme with management. However problematical this demand, without the close involvement of the union, there was bound to be unease and resentment. Now hardly a week goes by without some leak from the Cahill proposals. Most of the stories are concerned with massive lay offs. Yesterday SIPTU introduced a new and unsettling element by claiming that, in order to avoid the political fall out, the Government are delaying the Cahill report until after the Dáil adjourns. In all the circumstances, the timing of Team Aer Lingus’s protective notice against the men is ill-judged and can only be completely unproductive. Very hard decisions will have to be made in saving Team Aer Lingus and the parent company. Acceptance of the plan will hardly be facilitated by this bullish attitude of Team Aer Lingus management. On the other hand, the longer announcement of the plan is delayed the greater the scope for suspicion and eventual intransigence. Surely the most sensible thing is to: suspend all further rationalisation measures until the entire range of proposals are out in the open. It will be flendishly difficult enough then for wise heads to try and find an accommodation which will not jeopardise one of the nation’s largest employers. Fly at your peril in danger zones, travellers are toldBy Harvey Elliott, air correspondent AIRLINE passengers were warned yesterday that they could be risking their lives by flying in much of Asia, Central Africa, the former Soviet Union and South America. The International Airline Passengers’ Association has published a list of countries which, it alleges, are “the most dangerous areas in the word for airline passengers”. China came in for particular critism. The Washington-based organisation said that it “does not have an aviation infrastructure to handle the airline traffic of the 1990s, does not have the capital allocated or the expertise to create one quickly and does not have enough trained personnel to make it work”. The organisation gave its warning in the Travel Safety Alert newsletter sent to 450,000 members worldwide. It was based on the number and severity of accidents in each country, the quality of air traffic control, training of staff, the number of hijackings, safety of airports and security record. Flights within China, Korea and India were classified as unsafe, as were all countries in central Africa, the Commonwealth of Independent states, and flights through the Andes and into or out of Colombia. David Stempler, the group’s executive director, said: “We cannot over-emphasise the risks that airline passengers face in these areas and we urge our members to avoid them when possible Most of our members live in areas where airline travel is very safe and may not realise the risks they face in other areas.” The report mirrors growing concern in Britain about the safety of some foreign airlines. The Foreign Office’s Travel Advice Unit says in its latest bulletin that passengers flying within the former Soviet Union may be subject to long delays and cancellations as well as overloading. “It is not knowrr whether maintenance procedures are always properly observed,” the unit says. In its regular survey of airline safety, Flight International magazine also criticises both China and the former Soviet Union, although it claims that China is taking steps to overcome its bad reputation for safety. A spokesman for the Air Transport Users Council in London said that it was difficult to draw general conclusions from particular incidents in foreign countries. He added: “We are, however, worried by some of the reports we are getting, especially in relation to Aeroflot, and have asked the Department of Transport for a response.” The Times reported last month that the DoT was ready, if necessary, to ban Aeroflot from flying into Britain unless officials answered “immediately” allegations of a lack of safety procedures on take-off. There has been no response yet from Moscow. US airlines push for more UK slotsBy Paul Betts, Aerospace Correspondent American Airlines and Delta Air Lines, two of the biggest US carriers, are urging the Washington administration to renounce the bilateral aviation agreement between the US and the UK unless the UK grants greater access to US carriers into London’s Heathrow airport. They are also urging the withdrawal of British Airways’ ticket code sharing rights with USAir. Failure to reach a compromise agreement by March 17, the deadline for the renewal of BA’s existing code sharing rights with its US partner, USAir, risks provoking severe trade tensions between the two countries. The UK has already warned the US it would consider limiting some US airline flights into Heathrow if the BA code sharing rights were not renewed. In turn, this is likely to lead to US retaliation against flights by BA and other UK carriers into the US market. Mr Robert Crandall, chairman of American Airlines, yesterday renewed his attack on what he considers the UK’s “protectionist” stance towards BA. “The US should renounce the bilateral agreement to get a balanced solution. The US should not allow European carriers to participate in our market, by far the world’s biggest, unless we get equal economic opportunities in their markets,” he said in London. Apart from more access into Heathrow, Mr Crandall wants the right to fly into Heathrow from the US and then into other international destinations. He also argued that scarce take-off and landing slots at Heathrow should be auctioned in the same way as they are bought and sold at Chicago. Mr Crandall also attacked BA’s ticket code sharing arrangement with USAir as “nothing but a matter of consumer deception”. Under the code sharing deal, BA and USAir can market each other’s flights under the same ticketing code. Through the code sharing system. BA was able to market under its own ticket code more than 20,000 combinations of different destinations from which his airline was excluded because of the UK government’s unwillingness to give American Airlines broad operating rights at Heathrow, he argued. In a document filed with the US Department of Transportation, Delta said the UK government “has been on notice for at least one year that the continued renewal of the code sharing authority was dependent upon material progress on liberalisation in the bilateral negotiations”. However, United Airlines, the largest US carrier, has opposed a confrontation with the UK government and disassociated itself from the intense lobbying efforts by the other two big US airlines. The UK government and BA have both rejected the US demands. BA said it wanted its agreement with USAir, in which it holds a 24 per cent stake, approved in full by the US government but “not at any price”. Although the UK carrier favoured “open skies”, Sir Colin Marshall, BA’s chairman, told the British American Chamber of Commerce last week: “If, however, the US strategy remains geared to the notion that their airlines should be allowed to have free pickings in our British market while theirs remains closed, I can summon up reserves of any amount of patience.” Sir Colin disclosed that talks between the two governments had taken place in Washington last month. American Airlines chief steps up war on BA-USAir dealClinton urged to ditch UK air treatyMichael Harrison Industrial Editor ROBERT Crandall, chairman of American Airlines, yesterday called on the Clinton administration to renounce the bilateral air treaty with Britain in a last-ditch attempt to force concessions from the UK in the row over the British Airways-USAir link-up. Revoking the treaty, known as the Bermuda 2 agreement, would put a freeze on BA’s investment in USAir and stop its code-sharing arrangement with the carrier. But it could also seriously hamper Virgin Atlantic’s US expansion plans. The US Transportation Secretary, Federico Pena, has to decide by 17 March whether or not to allow BA and USAir to continue code-sharing. This is the arrangement whereby BA is able to offer through flights across the Atlantic to destinations within the US it does not serve but which are part of USAir’s domestic network. In return for continued code-sharing rights, US airlines want increased access to Heathrow and beyond into the rest of Europe. Yesterday, however, Mr Crandall, the most vociferous US critic of the BA-USAir deal, went still further, arguing that what was needed was a “worldwide aviation agreement that would permit any airline to fly wherever it chose and charge whatever it wished without regard to the country in which its office happened to be located”. Speaking in London yesterday, Mr Crandall said that BA should only be allowed to link up with USAir if US airlines were permitted the same access and economic opportunities in countries they flew to. Later he told a lunch organised by the Canadian and American chambers of commerce: “At this point it appears that nothing short of US renunciation of the US-UK bilateral will send a signal clear enough to drive home US unwillingness to tolerate the continuing imbalance of economic opportunities now available to the carriers of the two countries.” The BA-USAir agreement fooled passengers into thinking they were flying an entire journey on one airline, he added. Britain has threatened to ban US flights into Heathrow if the codeshare agreement is not extended. But Mr Crandall warned that the US would win any “retaliatory game of tit-for-tat”. One of the obstacles to granting US carriers more access to Heathrow is the shortage of take-off and landing slots. Mr Crandall said this could be overcome by trading slots as happens in the US, where they can change hands for $6m-$8m. He also backed the idea of “perimeter rules” as London’s three airports to reduce congestion at Heathrow and encourage more long-haul airlines to start using Stansted.
THE CRAFT GROUP OF UNIONS LEAD THE WAY FORWARD FOR TEAM AER LINGUS A MAJOR DOCUMENT ‘DESTINATION: THE FUTURE’ IS LAUNCHED THIS MONTH, TEAM AER LINGUS WILL RUN OUT OF MONEY UNLESS WE RESOLVE THE PRESENT CRISIS. THAT WILL MEAN: ✈ NO WAGE PAYMENTS. ✈ WE WILL NOT BE ABLE TO TRADE. ✈ THERE WILL BE NO EQUITY INJECTION BY AER LINGUS. ✈ IT COULD SIGNAL THE TRAGIC END OF ONE OF THE COUNTRY’S LARGEST AND MOST PRESTIGIOUS COMPANIES. ✈ 1900 CORE JOBS WOULD GO WITH HUNDREDS OF KNOCK-ON LAY-OFFS. ✈ AN ANNUAL £50 MILLION PER YEAR WOULD DISAPPEAR FROM THE LOCAL ECONOMY WITH £15 MILLION BEING LOST IN RETURNS TO THE EXCHEQUER. ✈ FOREIGN REVENUE OF OVER £40 MILLION PER ANNUM WOULD BE LOST. ✈ IT WOULD BE A DIGITAL - SCALE DISASTER MULTIPLIED BY TWO AND A HALF TIMES. AT PRESENT THE MANAGEMENT OF TEAM AER LINGUS HAS FORCED US INTO A CONFLICT ON ISSUES WHICH, EVEN IF RESOLVED, WILL NOT COME NEAR SOLVING THE COMPANY’S GROWING PROBLEMS. DESPITE AGREEING FAR-REACHING, COST-SAVING CHANGES IN OUR WORK PRACTICES WORTH £14 MILLION, WE ARE NOW BEING TOLD THAT WE HAVE AGREE THE FOLLOWING DRACONIAN CHANGES: ✈ A 16% WAGE CUT ✈ A COMPULSORY 48 HOUR WEEK (NO EXTRA PAY) ✈ THE USE OF EAST EUROPEAN AND THIRD WORLD CONTRACTORS. OUR LIVELIHOODS AND THOSE OF OUR FAMILIES HANG IN THE BALANCE. WE WANT TO MOVE FORWARD. WE WANT MANAGEMENT TO TACKLE TEAM’S CORE PROBLEMS. WE AGREE WITH THE BOARD OF AER LINGUS THAT A COMPREHENSIVE AND INTEGRATED RESCUE PLAN WITH A SHORT AND LONG TERM FOCUS MUST BE DRAFTED AND AGREED. WE WANT TO CONTRIBUTE TO THAT PLAN IN A MEANINGFUL WAY. STAFF HAVE BEEN FLEXIBLE AND REALISTIC IN THE PAST. IN THE LAST TWO YEARS OUR TOTAL INVESTMENT IN THE COMPANY BASED ON COST SAVINGS AND INCREASED PRODUCTIVITY COMES TO A STAGGERING £34 MILLION. OUR ONLY RETURN FOR THAT HAS BEEN ACCUSATIONS OF INFLEXIBILITY AND AN UNCERTAIN, BLEAK FUTURE. WE WILL CONTINUE TO MAKE SACRIFICES WHERE NECESSARY BUT ONLY AS PART OF A MARKET-LED RESCUE PLAN AND BASED ON SOME TANGIBLE ACKNOWLEDGEMENT OF THOSE SACRIFICES. THE WELCOME ARRIVAL OF OUR NEW CHIEF EXECUTIVE, DONNACHA HURLEY, PROVIDES AN OPPORTUNITY NOW TO BUILD BRIDGES OF COOPERATION AND PARTNERSHIP. WE HAVE MANY GROUNDBREAKING IDEAS ON HOW TO ACHIEVE FURTHER COST SAVINGS, GREATER PRODUCTIVITY AND INCREASED BUSINESS. WE HAVE RESEARCHED AND DISCUSSED WAYS OF HARMONISING RELATIONS BETWEEN WORKERS AND MANAGEMENT. THE PROBLEMS WE FACE ARE NOT UNSOLVABLE. THE CURRENT ATMOSPHERE NEEDS TO BE CHANGED FROM ADVERSARIAL TO ONE OF MUTUAL TRUST AND COMMON PURPOSE. THE STAKES ARE TOO HIGH TO ALLOW THE CONFLICT TO CONTINUE. WE OFFER THE HAND OF COOPERATION AND FRIENDSHIP. WE ARE DETERMINED TO BRING ABOUT THE RADICAL CHANGES NECESSARY TO SAVE AND DEVELOP TEAM AIR LINGUS. CONTAINED IN OUR DOCUMENT ‘DESTINATION: THE FUTURE’ WHICH WE LAUNCH TODAY ARE, WHAT WE BELIEVE TO BE, 10 ESSENTIAL STEPS NECESSARY TO ACHIEVE THIS INCLUDING: ✈ AER LINGUS SHOULD INJECT THE FULL £25 MILLION COMMITTED UNDER THE CAHILL PLAN AND NOT TAKE IT BACK IMMEDIATELY AS PLANNED. ✈ MANAGEMENT SHOULD IMPLEMENT THE MARCH 1994 AGREEMENT IN FULL — THEREBY SAVING £14 MILLION IN THE FINANCIAL YEAR 1994/5. ✈ WE SUGGEST THAT ANOTHER 50% INCREASE IN PRODUCTIVITY IS POSSIBLE WITH THE ESTABLISHMENT OF JOB TIME STANDARDS. ✈ TEAM SHOULD RECOVER THE £17.5 MILLION OF CUSTOMER DEBTS ✈ WE NEED TO DEVELOP NEW MARKETS AND NEW PRODUCTS FOR 1995/6. ✈ WE BELIEVE THAT EQUITY PARTICIPATION SHOULD BE GRANTED IMMEDIATELY TO ALL TEAM AER LINGUS STAFF TO FOSTER HARMONY, INCREASED COMPETITIVENESS, GREATER PRODUCTIVITY AND HIGHER PROFITS. IT’S TIME NOW TO SOLVE PROBLEMS. BUT EVEN THOUGH TIME IS NOT ON OUR SIDE, WE MUST ACHIEVE LONG-TERM SUSTAINABLE SOLUTIONS NOT KNEE-JERK, DANGEROUS AND INEFFECTIVE RESPONSES. THOUSANDS OF LIVELIHOODS ARE AT STAKE. MILLIONS OF POUNDS IN THE ECONOMY ARE AT STAKE. THE PRESTIGIOUS IMAGE OF IRELAND IS AT STAKE. IT’S TIME NOW FOR US ALL TO BECOME A REAL ‘TEAM’ AER LINGUS.
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