Union at Irish carrier Aer Lingus holds ballot on cost-cutting

Dec 2, 2008, 9:11 GMT

Dublin - Trade union members at Irish flag carrier Aer Lingus were due Tuesday to conclude a ballot on cost-cutting measures, following a take-over offer by rival Ryanair, Irish national broadcaster RTE reported.

Low-cost airline Ryanair offered on Monday to take over privatized national carrier with a bid of 1.40 euros (1.78 dollars) per share, which would value the airline at 748 million euros.

Aer Lingus late Monday rejected the offer.

SIPTU union leader Gerry McCormack said Ryanair's offer would have 'little or no effect on the ballot, except to make members even more determined than ever to defend decent pay and conditions within the aviation sector,' RTE reported.

Aer Lingus reported a loss of 22.3 million euros for the first six months of 2008, down from a profit of 2.6 million euros in the same period of 2007, due to high cost of fuel.

It is currently in dispute with its employees over a cost-cutting plan.

Ryanair said the deal would be worth 325 million euros in cash to shareholders, employees and the Irish government, which owns just over 25 per cent of the airline.

It also said it would double the size of the Aer Lingus fleet from 33 to 66 aircraft over the next five years and create more jobs.

McCormack said that given Ryanair's track record, promises about the fleet expansion and job creation 'would carry little credibility' and even if they were credible 'it still raised the spectre of a monopoly position for an airline not noted for its concern for the public.'

Ryanair's previous offer from September 2006 was rejected by the Irish government and Aer Lingus, which called it 'ill- conceived, contradictory and anti competitive.'