The looming pension deficit at Aer Lingus looks set to become a major political issue before any sale of the airline is undertaken, it emerged yesterday.
A recent actuarial report from consultants Mercers warned that if the pension fund linked to Aer Lingus continued to pay out inflationary increases, it would run into a deficit of more than €336 million.
Following a presentation yesterday from the Retired Aviation Staff Association (Rasa), members of the Joint Oireachtas Committee on Transport said they wanted the Aer Lingus chief executive Dermot Mannion to appear before them to discuss ways to resolve the problem. Officials from the Department of Transport are also likely to be called before the committee.
Several members said any privatisation plan should not be implemented until the pension issue was addressed.
The members of Rasa said they wanted pension increases to be linked to earnings in future. They also want the company and existing staff to almost double their contributions to the pension fund, which is known as the Irish Airlines (General Employees) Superannuation Scheme.
Róisín Shorthall TD told the committee the Government needed to act on the issue very soon before the company was in the hands of private investors. However, the chairman of the committee, John Ellis, said he was confident the employees, with 14.9 per cent of the equity, would "use their muscle".
Senator Timmy Dooley, Fianna Fáil, said it was important all parties be brought before the committee, including the Dublin Airport Authority, which is also a member of the pension scheme, along with SR Technics, formerly Team Aer Lingus.
Spokeswoman for Rasa Maireád Hayes said the company had proven to be unhelpful in addressing the issue. "Aer Lingus management will continue to say that the pension scheme at present, within the rules, meets the minimum funding standard. This view takes no account of the future. The actuary's view is that the contribution revenue is too low to meet current and future benefits," she said.
Meanwhile two unions, Siptu and Impact, informed the committee yesterday that Aer Lingus had harassed and put unfair pressure on staff over the last two years.
In evidence to the committee, Impact representatives Christina Carney and Michael Landers, said management tried - and in some cases succeeded - in forcing staff out by making their working lives "uncertain, miserable and unstable".
