Industrial action seems imminent for Aer Lingus pilots due to their union, Ialpa, announcing an undefined work to rule commencing from June 26th. This decision is backed by a majority union vote in support of industrial action pushing for a pay claim exceeding 20%.
The potential impact of this symbolic action is massive concerning Aer Lingus’ revenue as the airline gains the majority of its profits during the summer months. For instance, out of its €236 million operating profit earned in the previous fiscal year, €196 million was generated from July to September.
The proposed industrial action could considerably disrupt passengers, with the airline flying an estimated 36,000 customers daily during the summer peak last year, and projections for this year increasing to around 40,000. Prolonged strike actions could potentially cost millions in compensating, refunding, or rerouting inconvenienced passengers and affect numerous holiday itineraries.
As a part of the International Airlines Group (IAG), containing British Airways and Iberia, Aer Lingus possesses a robust fallback plan due to its parent company’s €37 billion balance sheet. This monetary strength enables some losses to be absorbed and additional resources to be drawn upon from the group, such as planes and crew, should the need arise to substitute scheduled flights or hire additional support from other airline companies.
This advantage places Aer Lingus in a sturdy stance to endure a prolonged strike by its pilots. Despite the potential decline in business, the era of low-cost flights does lead to an optimistic outlook of swift business reinstatement post-dispute.
Nonetheless, this financial windfall is a double-edged sword for IAG. While the short-term safety of the pilots’ employment is ensured thanks to their intended strike action, the repercussions potentially include reduced investment in the airline, redirecting new planes towards other airlines within the group.
This condition has led to a stalemate, with pilots holding fast to their demand for a salary hike, nearly twice the current offer. Given their current generous compensation, the likelihood of public compassion is highly questionable.
Albeit, Aer Lingus attempted a resolution with a wage increase of 8.5%, and the Labour Court suggested a 9.25% boost, Ialpa insists on over 20% increase due to the escalating cost of living issues among others.
Concessions from both parties will be essential to bridge the gap, and IAG harbours reservations about the broader group impact if they yield to the Irish pilots. Nevertheless, all parties are aware that eventually, a compromise must be reached. The current question is whether the substantive discussions will commence before or after the initiation of industrial action.
There are occasions when industrial conflicts are resolved only after the starting action forces all sides to negotiate. However, the magnitude of the impending disruption now compels the parties involved to engage in dialogue beforehand and prevent a massive inconvenience to passengers.