The Dogfight Over Shannon

Ireland Calling with John Spain

The Dogfight Over Shannon

August 23, 2007

By John Spain

IF you were flying Aer Lingus to or from New York on Tuesday, August 21, (EI104/105) or to or from Chicago on Wednesday, August 22 (EI122/123), well I’m sorry for your trouble. This week, on Tuesday and Wednesday, the several hundred pilots who work for Aer Lingus were due to have a two-day strike right across the airline, causing major disruption to passengers not only on trans-Atlantic routes but on routes all over Europe as well.

They called it off with just about 12 hours to go, in time for all the European flights to be restored but too late to save the trans-Atlantic flights mentioned above. As I write an uneasy peace has broken out, but it’s too early yet to say whether more trouble lies ahead.

The dispute is over the different pay and conditions that the airline is planning to offer to pilots working out of its proposed new Belfast, base and the refusal of the airline to negotiate with the pilots’ union about this.

The new Belfast base is already causing major grief here, as we outlined in this column last week, because Aer Lingus is to end its Shannon-Heathrow service so that it can use those valuable Heathrow slots for a new Belfast-Heathrow service.

Business and tourism leaders in the Shannon region have been predicting the death of the west if this goes ahead, and the whole issue has blown up into a national drama.

So far the government is holding firm, insisting that since Aer Lingus is now a private company after its privatization a year ago, it must be left to make its own decisions purely on a commercial basis. The government insists it can’t intervene, even though it is still a 25% shareholder.

Many Aer Lingus staff are also unhappy about what’s going on at Shannon. But that’s not the reason for this week’s action by the pilots.

Now pilots, as we all know, are very privileged workers who enjoy special glamour and status and pay packets almost as big as their egos. They’re not the kind of workers you usually expect to see on a picket line. Yet Aer Lingus pilots are so angry that they were prepared to implement an airline wide shutdown this week, and may yet do so.

Why? The pilots were striking because they see the Aer Lingus proposals for Belfast as the thin end of a wedge that eventually could affect their pay and conditions in the south.

And the principles involved in the dispute are being watched with great interest by unions and workers in many other companies here because they are part of a much wider attack on traditional worker rights. This may sound rather dry and boring, but stick with me and you will see that the principles involved are of great importance.

Aer Lingus has several hundred pilots who all fly out of Dublin or other airports in the south of Ireland. As well as being a part of the wider trade union movement here through the IMPACT union they are also represented by their own organization, the Irish Airline Pilots Association (IALPA). Over the years the IALPA has established very good pay and conditions for its members as well as an excellent pension scheme.

This costs money, of course, and is one of the reasons why Aer Lingus is still a higher cost airline than some of its competitors. So when Aer Lingus decided that it was going to open its first base outside its home country if you count Northern Ireland as somewhere foreign it decided that it would recruit pilots for the Belfast base and decide on their pay and conditions without reference to the agreements with IALPA in the south.

The pay will be somewhat similar, but the conditions will not be as good and the pension scheme will have no guarantees, unlike the pilot pension scheme in the south. In comparison with its Dublin base, the Aer Lingus base in Belfast is going to be a low cost pilot operation.

On top of that, the refusal of the Aer Lingus management to negotiate with the union was potentially even more damaging. Taken together, what was being proposed was clearly a direct threat to pilots in the south.

The idea that pilots’ pay and conditions should be related to where they are based is not something new. In fact it is now an established part of sections of the aviation business in Europe and elsewhere.

So if a big European low cost carrier (like Easyjet, for example) has bases in Britain and Bulgaria, pilots based in the two countries may not get the same money. There’s some logic to this since the cost of living in Bulgaria is a fraction of that in Britain.

But Dublin and Belfast? Is anyone seriously suggesting that the same logic applies or is it not simply that Aer Lingus is using the technical fact that Belfast is not in the south to try to pay less up there?

This raises the intriguing idea that Aer Lingus, the “national” airline of Ireland, regards the north of Ireland as a foreign country. And them with the big green shamrock on their tails!

Of course it’s all about money, not politics. But the Aer Lingus stance is even more transparent when you realize that they are trying to have it both ways. On the Heathrow slots issue they apply exactly the reverse logic.

Let me explain. When the airline was being privatized a year ago, both Aer Lingus management and the minister responsible spent a lot of time trying to convince a skeptical public that the Heathrow slots would be protected.

Various undertakings were given regarding the slots Aer Lingus has at Heathrow airport, slots it got in the first place because it was our national airline. These undertakings were generally understood to mean that a privatized Aer Lingus would not be allowed to sell the Heathrow slots used by flights from Irish airports.

The Shannon people are now insisting that these undertakings mean that their slots at Heathrow cannot be switched to Belfast, which is part of Northern Ireland, and they are threatening a legal challenge on that basis.

But the Aer Lingus position is that Belfast and Shannon are both Irish because they are both on the island of Ireland and Aer Lingus is free to switch Heathrow slots between them. So when it suits Aer Lingus Belfast is “Irish,” but when it doesn’t suit them Belfast is “foreign.” Which is very Irish in its own way, I suppose.

It’s easy to poke fun at this, but there’s a very serious issue at stake here. And that is the way so many Irish companies are now using every trick in the book to cut the pay and conditions of their workers.

And the favorite trick is what is called “outsourcing,” moving parts of the work to a cheaper location either abroad or to regions in Ireland where pay rates are lower and unions less organized. We’ll be coming back to this management stroke in a future column here because it is a cheap trick now being used by some of the best known companies here, a Gordon Gekko-style trend that needs to be exposed.

The Aer Lingus pilots may not be the best example of downtrodden workers and they are unlikely to have much public sympathy for that reason, but the principle is the same.

Of course it’s easy for managements in big successful companies to say that their workers are overpaid or inefficient simply because they have negotiated pay in line with their companies’ success. But in the case of Aer Lingus it was the ground staff — including the bloated management — that needed reform much more than pilots, who these days have to work rosters that are so demanding that some concerns about safety have been expressed.

It’s conveniently forgotten by the managements of these companies that it was the workers who built the company wealth in the first place, and they should be sharing in the success instead of being treated so shabbily. But these days in post-Celtic Tiger Ireland, the power lies with major shareholders and managements who hold big share options. It’s all a macho game of driving down costs by dumping high pay workers, ending guaranteed pension rights and moving work to cheap locations.

While all this has been going on over the past week, Michael O’Leary of Ryanair has been having enormous fun at the expense of Aer Lingus. He even offered to rent Aer Lingus some planes and crew to ease the plight of passengers on flights cancelled because of the strike. Since he and the Aer Lingus management are arch enemies he must have enjoyed that almost as much as all the publicity it generated.

You will remember that he tried to take over Aer Lingus after it was privatized but was stopped by the European Union rules on competition. He has been increasing his stake ever since.

Last week, while attention was diverted, he upped his stake in Aer Lingus further to just under 30%.

So the combination of his 30%, the government’s 25% and the extra shares held by the workers add up to a clear majority of the shares. O’Leary has now put it up to the government by saying that he will join with them if they want to demand an emergency board meeting of Aer Lingus. That would allow the board to give new policy directions to the Aer Lingus management, perhaps reversing the decision on the transfer of Heathrow slots from Shannon to Belfast.

So O’Leary has called the bluff of the government which has been insisting all week that they could not intervene. Talk about making mischief!

No one can figure out exactly what O’Leary is at since Ryanair runs flights to other London airports from Shannon, and says

it will increase these when the Aer Lingus Shannon–Heathrow service ends. Maybe he’s just providing the rest of us with some much needed amusement as this awful summer the wettest for many years finally drips to a close.

Share this story: digg this | Add to del.icio.us

Print Save Discussions

Discuss

Email a friend