Aer Lingus is unlikely to abandon any transatlantic routes in a radical overhaul designed to reverse losses.

It is also understood that senior figures in the State company accept that major trading difficulties will continue into next year.

Managers are expected to report to the airline's executive in a round of meetings next week. They were asked last month to assess cost and revenue projections for its winter schedule and for summer 2002.

The most crucial element of the discussions will centre on the use of the airline's fleet.

While the possibility of withdrawing from a small number of European routes will be examined, there is a reluctance to abandon any element of the US business.

This proved very lucrative when the airline was growing in the past seven years and its investment when introducing new routes, such as the Baltimore/Washington service, was heavy.

The discussions next week are likely to centre on scheduling and the frequency of flights.

If possible, aircraft may be redeployed to profit-making routes from loss-makers.

The outcome of that process will determine the company's staffing needs.

It is likely the plan will see a reduction in the number of temporary staff hired next summer. Aer Lingus recruited about 600 workers this summer - about 10 per cent of its 6,000-strong workforce.

The aim is to prepare a recovery plan that will be presented to the company's board at a meeting on September 27th.

There is an acceptance, however, that the plan may have to be amended at a later date if trading deteriorates further.

The airline has informed its 6,000 staff of a €38 million (£30 million) deficit in the first six months of the year on revenues of €548 million. It is understood the worsening performance continued in July, with the losses neither growing nor reversing.

In preparing a recovery plan, the company is likely to order the development of a new internet site for bookings or significant changes to the current service, which is perceived to be too complicated.

Its introduction has not resulted in large numbers of customers migrating online.

Discretionary spending has been banned and Aer Lingus wants to review the efficiency of its frequent-flyer programme.

Also crucial to the process will be an assessment of the expenditure used to deliver its service at economy and higher levels.

The company is reviewing direct costs, such as expenditure on fuel, landing and baggage-handling charges, regulatory fees and other expenses.

Before the end of the year, it must decide whether or not to proceed with the purchase of four Airbus A319-type aircraft for short-haul flights.

Scheduling costs are likely to reflect a desire to spend less on overnight accommodation for workers on evening flights from the Republic who return on morning flights.

Expenditure on information technology will be reviewed next week, as well as the company's internal communications programme.

Also under scrutiny will be business units such the company's charter and tourism operations.

While Futura, the charter airline wholly owned by Aer Lingus, has not been formally put on the market, it is likely to be sold if a suitable bid emerges.

Because the Government is expected to appoint an outsider to succeed the late Bernie Cahill as chairman, the plan will be implemented by a figure new to the company.

The Government is expected to move quickly to appoint a new chairman, who will be in place in time for the meeting on September 27th.

Those familiar with the situation say there is confidence that the plan proposed can be delivered.

While the process of appointing a new chief executive was well-advanced, it was delayed by Cahill's death on August 17th.

It is thought that certain figures who were unsuccessful when the position last became vacant were approached this summer after the company sacked Mr Michael Foley.

He rejected the report of a board subcommittee that upheld two complaints against him of sexual harassment.