Profits at FLS Aerospace slumped to €269,000 from €6.19 million (46 million kroner) in January to March amid weak demand after the attacks on the US last September.

The profits slid in what is usually the company's strongest quarter and it warned that only a small operating profit was expected for the full year.

The former TEAM Aer Lingus, which employs about 1,600 people at Dublin airport, said staff reductions would not be fully effective until the end of June. The Danish-owned aircraft maintenance group had a target of 200 voluntary departures from its Irish operation.

Its quarterly statement said: "FLS Aerospace expects no improvement in the market situation this year, so the organisation remains under pressure to adjust costs. . . Notwithstanding signs of improvement, the aircraft maintenance industry remains affected by the terrorist events on September 11th."

The company's owner, FLS Industries, said it would present a new strategy for "optimising the value" of the conglomerate on August 29th.

Asked whether the strategy would have implications for staff in Dublin, a spokeswoman said: "We're coming through our own restructuring, looking at our own strategy for the next three years in terms of the service offering and customers we have. That's all being developed at the moment and that will obviously feed into the strategy that FLS group will present in August."

The new strategy follows a very difficult period for the company, which has seen its largest shareholder, Potagua, indicate intentions to sell its stake. Attempts last autumn to sell FLS Aerospace to US group United Technologies foundered amid the fall-out from the September attacks and its chief executive, Mr Stephen Henderson, resigned earlier this year.

The spokeswoman said: "Right now we're not looking at selling. It's business as usual but they will look at a sale in the medium term."

The company's revenues in the first three months of the year fell to 784 million kroner from 873 million a year earlier. Despite trading difficulties, the company said its cash position had improved in the first quarter with investments amounting to 27 million kroner.