Aer Lingus may have to cut back operations by even more than the 25 per cent already indicated to remain viable in the current economic climate.
Meanwhile, the Minister for Public Enterprise, Ms O'Rourke, has warned that the company is in such poor financial state that Government intervention cannot save 700 jobs the airline intends to cut. She was speaking in Brussels after meeting her Belgian counterpart and president of the EU council of transport ministers, Ms Isabelle Durant yesterday.
Officially, Aer Lingus is refusing to comment in advance of its board meeting to approve a rescue package next week.
However, sources within the company said yesterday that the full 25 per cent cut in costs indicated on September 18th would be necessary - and possibly more would be needed. Any residual hopes that passenger demand would pick up seems to have evaporated and traditional ways of drumming up business, such as fare cuts, may be in the offing.
Already the well-signalled decision not to pay the 5.5 per cent due under the Programme for Prosperity and Fairness this month is a foretaste of things to come. Reducing job numbers will be a key element of any savings package.
It will cost the airline £38 million to pay the awards already conceded in full, and it has still to strike a deal with its 550 pilots.
However, the £38 million is based on a workforce of 7,000. The shedding of 700 seasonal staff will make relatively little difference to the wage bill but cutbacks in pilots and cabin crew to match the reduction in flight services could achieve significant gains. It is understood that preliminary discussions between IMPACT and the company on pilot numbers yesterday made little progress.
Management is still preparing new figures on the number of pilots needed for next week's board meeting. Similar exercises are being undertaken with other groups.
It is a sign of the changed times that cleaners and caterers, who had earlier rejected company offers on local pay increases by large majorities, settled all outstanding claims last Friday. Despite the loss of most of the cabin crew to IMPACT, SIPTU still represents the vast majority of Aer Lingus personnel and the issue of cutbacks will be raised at the union's conference in Tralee tomorrow.
Yesterday, SIPTU national industrial secretary, Mr Noel Dowling, refused to be drawn into speculation on further job cuts at the national airline. He said that even the figure of 1,700 already indicated was based on no financial support being forthcoming from either the EU or the state.
"I get no sense of urgency from the Government that they are out there making much of a case for State assistance", he said. "The whole debate they are engaging in is in the context of what the EU will allow and competition rules.
"You have to contrast that with the Government stance on corporation tax, when Charlie McCreevy had no problems saying he wouldn't be dictated to by Brussels."
Mr Dowling said he had no doubt that any aid would have to come from the Exchequer rather than the EU.
Yesterday, Ms O'Rourke said the Government would only consider State aid on the basis of a tough restructuring plan.