More sh*te at Aer Lingus.

Muggy Dev

This from Ireland.com this evening....

"Siptu has served strike notice on Aer Lingus this evening over what it says is a company decision to "unilaterally downgrade" the working conditions of its employees.

National industrial secretary Michael Halpenny claimed strike notice was issued because the airline is coercing temporary employees to sign employment contracts offering significantly worse pay and conditions, by refusing to extend current employment for contract staff beyond January 31 stnext year.

By the end of January 2008, permanent staff positions and temporary contract extensions will be subject to agreement to new work terms and conditions of less pay for more hours, Mr Halpenny said. Many of the staff affected are "vulnerable migrant workers" with limited English language skills, he added.

Strike action will consist of rolling four hour work stoppages throughout Tuesday, November 20 thand Friday, November 23rd at Dublin, Cork and Shannon airports.

Siptu is also seeking support from the Irish Congress of Trade Unions (ICTU) and has called for an "all-out picket".

Mr Halpenny said: "This latest attack on our members comes on the heels of a pay freeze imposed by the company simply because our members have not agreed to allow the company to cut their pay and conditions.

"The justification for this relentless attack on the living standards of workers on, or near the average industrial wage, is that Aer Lingus rates are 'not competitive' in aviation sector terms," he said.

"The methodology on which this claim is made has never been disclosed and the only airline that has labour costs significantly lower than Aer Lingus is Ryanair, which outsources so much of its work that comparisons with its direct labour costs are meaningless."

Aer Lingus, which has been battling with unions to cut overheads since its privatisation last year, averted flight disruptions in October after reaching a last-minute deal with pilots over a disputed new base in Belfast."

dogmatix

Aye, but whose fault is the lates sh*te at Aer Lingus? Going from what i've seen on another thread, I would assume you think this is all the unions fault? But from what I see in your thread above (and having seen nothing else yet) it appears that the unions are right to call for a strike.

Muggy Dev

dogmatix wrote: »

it appears that the unions are right to call for a strike.

You´re certainly entitled to that point of view.I,however,come from a different perspective.If you can´t run your business in the best possible way,then shut it until you can or get out of the businness altogether.Quite simple really.

Aer Lingus is riddled with restrictive work and payment practices and no credible public company can tolorate this situation.Check out the share price of Waterford-Wedgewood for proof. I differ from the EI Board in that I would never have gone for the program of cost cutting efficiency from the outset (some 12 months ago now) but instead gone for 1000 redundancies which correctly represents the level of overstaffing in this case.

After that,correcting the existing problem would be a lot more simple.

zuutroy

I'm sick of it. Every time I try to come home there's some ****e now...have had to book a Ryanair flight AGAIN just in case it all goes to pieces, that is assuming they're not suspended by Saturday and I dont get out at all!

Muggy Dev

zuutroy wrote: »

I'm sick of it.

We all are, but things are coming to a head now.The company have warned that it will suspend staff if they fail to give an undertaking that they will not take industrial action next week.Deadline,close of business Monday.

Unlike the "Belfast row" where a potential settlement was always within sight(depite the fog) this row now looks like following the same pattern insofar as a potential lockout of employees but this time non SIPTU employees will be put on protective notice and,utimately, no-one will get back in untill they sign up to the company´s cost cutting plan.


Next week should see the the final lancing of the boil.Expect an eruption of puss......unless the EI Board bottle it of course.

zuutroy

Got lucky with getting a Ryanair flight later in the day for 10euro including charges.

Muggy Dev

Good for you,mate!:)

dogmatix

I can't disagree with the notion of running a business in the best possible way - but not at the cost of squeezing all possible gains out of employees for the smallest possible renumeration. I call that exploitation - Aer Lingus may be riddled with restrictive work practises but it is a profitable company and not some creaking business, deep in the red.

Your idea of simply going in and making 1000 people redundent seems a bit callous - no doubt many 100's would accept redundencies but many 100's would not, and not necessarily the workshy/restrictive practises ones either. The impression I get that people can be regarded as a 1000 units to be hired/fired as and when the economic outlook of a company dictates is not an environment I would like to work or live in.

As in your first post, from the information posted it would seem to be perfectly sane and right for Siptu to call a strike. Once again we have the management firing a missile into the employees to start a strike. But i'd like to see a statement or information from the mangement as to why they have unilaterally gone ahead with this so as to get a balanced view as to the dispute.

Muggy Dev

dogmatix wrote: »

But i'd like to see a statement or information from the mangement as to why they have unilaterally gone ahead with this so as to get a balanced view as to the dispute.

Fair point. Here´s the link to Dermot Mannion´s letter to SIPTU members working in Aer Lingus:

http://www.rte.ie/news/2007/1113/aerlingus1.html

pclancy

Feck are they going ahead with this on Tuesday? Im flying with them on my last leg back from Beijing from Amsterdam to Dublin... :O

Muggy Dev

Results for the first half of this year for the company reveal a serious tale of woe which has largly gone un-noticed by the mainstream media.

Compared with the first six months of ´06, operating profits were down to 2.6 million from 10.6 million on an increase of revenues of 12.9% to 574 million. These are extaordinary numbers and show a company strugling and failing to be competitive. All of the companies main rivals have published better than expected results for the same period.

Incredibly and contrary the concensus in the market that the company is overstaffed,employement levels rose from 3551 to 3770 for the same period.

Even if Belfast is a success and Mannion´s plan for 20 million in cost saving are achieved,neither of which are a foregone conclusion, it is difficult to see the company can grow in a meaningful way unless it can significantly reduce its payroll costs.

From the heady days of the stockmarket launch when shares peaked at 3.20 euros, the shareprice is now rooted in the doldrums and languashing at 2.15 euros. Investors will have limited patience for a company that does not tackle it´s fundamental problems.

dogmatix

I caught the end of Prime time last night with Mannion and the guy from Siptu. And was listening to morning ireland today. Neither was impressive. Morning ireland said that one of the Union gripes is that management keep coming to them with demands for cost cuttings - workforce agree to them only to have management returning 4 months later looking for more cost cuttings.

Now I don't know what the real reason for the problems at Aer Lingus are but at the very least the management need to say exactly what the problems are, what exactly they need to do to fix them and why their previous plans failed. If the previous plans failed because management where deficient (in creating the plans, implement them or both) then management needs to be sacked - starting with Mannion.

As for belt tightning - well senior mangement need to lead by example and take cuts in their own salary and bonus packages before asking those people who can probably least afford to take cuts. Mannion could start the ball rolling start by giving a detailed breakdown of his base salary, bonus package and stock options.

As for travelling - never, ever fly Aer Lingus! BM will get people to heathrow no problem and BA to Gatwick. Oh and Ryanair I suppose (although i'd sooner insert a red hot poker up a certain part of my anatomy where a cotton bud would be kinder then fly with those bullying bast*rds).

FlutterinBantam

dogmatix wrote: »

Now I don't know what the real reason for the problems at Aer Lingus are but at the very least the management need to say exactly what the problems are, what exactly they need to do to fix them and why their previous plans failed. If the previous plans failed because management where deficient (in creating the plans, implement them or both) then management needs to be sacked - starting with Mannion.

As for belt tightning - well senior mangement need to lead by example and take cuts in their own salary and bonus packages before asking those people who can probably least afford to take cuts. Mannion could start the ball rolling start by giving a detailed breakdown of his base salary, bonus package and stock options.

As for travelling - never, ever fly Aer Lingus! BM will get people to heathrow no problem and BA to Gatwick. Oh and Ryanair I suppose (although i'd sooner insert a red hot poker up a certain part of my anatomy where a cotton bud would be kinder then fly with those bullying bast*rds).

Well if you dont't Dogser I certainly do....Two words... COST BASE.

Way too high for the fares being charged.
Work practices which the current fare structure cannot sustain.

As I see it :two choices for the workforce.

Get real and understand that times have changed-change or get out.

Watch the company sink like Sabena and Swissair.


Its really fairly simple!

dogmatix

Cost base? Says who? Aer Lingus management? I'll take that with a pinch of salt! Sometimes the cost base argument is trotted out by a company management to justify unfair work practises. The Cost base argument was used by Irish Ferries when they where cutting staff and their working conditions to the bone - they claimed their main competitors on the irish sea had much lower cost bases. But they deliberatly neglicted to include their main competitor Stena when composing their figures.

So i'll say it again - Aer Lingus are a profitable company not a loss making company and not up sh*t creek like SAS and Sabena were before they went belly up. BM charge similar or higher fares on the heathrow route and you never hear about problems from them.

Maybe profits of between 40 and 90 million a year (depending on who you believe or what paper you read) is not much when a modern jet airliner can cost up to 100's of million a pop but it is still a profit not a loss.

As I said in post 12 - the unions are claiming management present plans, the workforce agree to them and then the management come back looking for more. Is this true? If it is then the problem is not the workforce but the management and maybe the management needs to get real and get out.

FlutterinBantam

Quote DOGMATIX "Cost base? Says who? Aer Lingus management? "

Yes! along with almost every other economic commentator in the land.

Muggy Dev

dogmatix wrote: »

that people can be regarded as a 1000 units to be hired/fired as and when the economic outlook of a company dictates is not an environment I would like to work or live in.

I take it from your remarks that you currently work in the public sector,where workers are sheltered and protected from the harsh commercial realities of the private sector. Although, judging by Brian Cowen´s remarks earlier today,that may all be about to change. Public sector reform is now on the political agenda and about time too!

Gobán Saor

Muggy Dev wrote: »

I differ from the EI Board in that I would never have gone for the program of cost cutting efficiency from the outset (some 12 months ago now) but instead gone for 1000 redundancies which correctly represents the level of overstaffing in this case.

And you know this correctly represents the level of overstaffing because....?

How do you know it's 1000 not 900 or 1100? Or 500, or 50? or zero?

FlutterinBantam

In my opinion overstaffing is not the major problem.

Getting more productivity, at less cost, from the current workforce IS the problem.

less cost doesn't mean a pay freeze,or pay reduction,just means less people on overtime rates covering for people who are not working due to restrictive practices,sick leave,absenteeism etc.

Its not rocket science.

Muggy Dev

Gobán Saor wrote: »

How do you know it's 1000 not 900 or 1100? Or 500, or 50? or zero?

These numbers were widely reported from Ryanair at the time of their bid.Identified were:100 U.S. based cutomer support staff, 600 general administration staff and remaining baggage handling,catering and cleaning staff whose functions would be farmed out to contractors.

So,lets assume that an average salary cost here,including taxes and pensions,of 50K,then savings in a full year of 50 million euros would acrue.Given that Aer Lingus current cost per seat is 80 euros while Ryanair´s is 40 euros then this move would go a long way to redressing this imbalance and set the company up for future earnings and share price growth.

dogmatix

Flutterer - Quote: "Yes! along with almost every other economic commentator in the land".

Really? Where's the evidence - point me to a good weblink that can give me a breakdown on this "cost base" argument from AL management. You know - facts, figures, counter arguments. Until then I reserve the right to take the "cost base" argument with a pinch of salt.

Muggy_Dev - Nope, I work in a publicy quoted software company that like most software companies does not have (or encourage) unions. I am not in fact a member of any union, I have no company pension and little other benefits other then my base salary. It's interesting to note that what I would regard as basic fair play and respect for other people, you immediatley assume i'm taking this stance because i'm working in a cosseted work environment somewhere. I mean I would never assume Muggy_dev that you where a very well paid and pampered senior manager in some large multinational who is completly insulated from the real day to day realities of life in the 21st century celtic tiger.

One point I would like to make and I feel it is a very important one, is that it is all well and good to push the profits argument but neither of you are considering or have any apparent interest in the "human factor". Employees are not economic units on some balance sheet to be deleted at will when company profits fall below a certain threshold - they are people, human beings. I just don't get the impression that Mr Mannion thinks that way and it annoys me he has so little apparent consideration for his workforce when he is earning what is in effect a small fortune each year. There has to be a better way for AL then the current situation - for management to swagger around trying to show everyone that they have a set of "cojones" as the yanks like to say does not equate to good management.

FlutterinBantam

Why do you have the impression EI mgmt "swagger"around.

Can you direct me to a website(other than pprune or the Socialist party) which supports that argument.

Muggy Dev

I apologise for my assumption in an earlier post Dogmatix, but let me re-assure you that I am neither highly paid or pampered. If only....

The human context is valid in the context of all companies whose management and workforce are pulling together to try to make things work for everyone involved.What you´ve got to remember about Aer Lingus s that this was up untill recently,a semi-state company with all the inertia,baggage (no pun intended),restrictive work practices and payments that go with that territory.What the current board are trying to do is make their company as competitive as,I have no doubt,yours is.The trouble is that to get from point A to the promised land in Aer Lingus´s case,because of the background and the history,it´s going to take a fair degree of pain.

I hinted at it earlier,but as time goes on I´m more of the view that the current board are just not up to the job.They hired another 200 staff in the first half of this year.WTF!

Gobán Saor

Muggy Dev wrote: »

These numbers were widely reported from Ryanair at the time of their bid.

And you believed them, did you?:rolleyes: Did it never occur to you that O'Leary might just have picked a nice round number like 1000 out of his head?

Muggy Dev wrote: »

Identified were:100 U.S. based cutomer support staff, 600 general administration staff and remaining baggage handling,catering and cleaning staff whose functions would be farmed out to contractors.

Of course there aren't 600 "general administration" staff. Most of these are actually in check-in, reservations etc. Look at the Aer Lingus defence document sent to shareholders for details.

Muggy Dev wrote: »

So,lets assume that an average salary cost here,including taxes and pensions,of 50K,then savings in a full year of 50 million euros would acrue.

Minus of course what the contractors would charge for these services. Bags still need to loaded, aircraft need to be cleaned and long-haul passengers need to be fed! Might put a big hole in your €50mil.

Muggy Dev wrote: »

Given that Aer Lingus current cost per seat is 80 euros while Ryanair´s is 40 euros then this move would go a long way to redressing this imbalance and set the company up for future earnings and share price growth.

Only 25% of Aer Lingus (or indeed most airlines costs are staff related. So only 20 of that €80 is staff costs. Even if you could remove 25% of the staff (about 1000 people) and save the entire cost (which you can't because of the cost of contracting in the services) you'd only knock €5 off that €80 figure.

Gobán Saor

Muggy Dev wrote: »

They hired another 200 staff in the first half of this year.WTF!

Ah, they also bought 2 additional long haul and 4 additional short haul aircraft (a fleet increase of more than 10%.) Sadly, aircraft still don't fly themselves. That means more pilots, cabin crew etc. Which, oddly enough, is what nearly all of the 200 extra people are.

Muggy Dev

Gobán Saor wrote: »

And you believed them, did you?

The Ryanair numbers were never rebutted by Aer Lingus (or indeed,anyone else)when this claim was made.Indeed the company cynically used these figures to create a "you´re better off with us" scenario in the minds of its employees.Furthermore,it was widely expected at the time by the financial and general media that the company would out-source all non-core employment such as catering,cleaning and baggage handling.A no-brainer first step in terms of putting your house in order.This did not materialise.Instead we get the much lauded P.C.I with it´s promise of 20 million in annual cost savings when implemented.Is there anyone out there who,in the light of recent events,has any confidence in this plan? Does anyone believe that by re-arranging a few deck chairs, 20 million will plop to the bottom line? The market certainly does´nt. EI shares currently standing at 2 euros.


So Mr Saor, perhaps you might take a squint at this:

http://www.ireland.com/newspaper/breaking/2007/0830/breaking12.html?via=rel

...and advise us of what steps you would take to put this company back on a sound footing.

dogmatix

C'mon Flutter - lets not get silly now. You stated that AL mangement say it's a high cost base and that most other economic comentators in ireland agree. I just wanted some evidence of your statement - or at least a breakdown of the AL management argument. You where making a statement of fact and that requires evidence unless you ment it as an opinion.

In my post #20 I was not making a statement about AL management - just a mildly humourous comment to illustrate a point. That does not require evidence or backup. I didn't think anyone would really believe Dermot Mannion swaggers around the AL head office buck naked from the waist down so all see he has a fine set of family jewels.

On the other hand - if FlutterinBantam is the boards.ie id of Dermot Mannion then I apologise and can understand your being miffed. I'm sure your Cojones are just fine and need no validation to the wider world.

I did vote Labour in the last election but dear god, no one could describe Labour as socialists anymore!

As to your post #18 - it's a resonable point and I can't disagree with a lot of it. Maybe it's all down to ensuring management can get their staff to work more efficently without asking them to lose benefits. A good management team might be able to do so - I would think if the AL management where to lay out their plans to staff and public, accept responsibility for implementing these plans and share the benefits (and losses) with the staff then the onus would be on the Unions and staff to step up to the mark. But from my point of view management are not doing this - and currently I am siding with the staff/unions in AL.

Muggy_dev - post #22. Valid point and no doubt lots of restrictive practices as mentioned in flutters post #18 also. But I think management are approaching this thing like a bull in a china shop (no Flutter, I can provide no links to videos of Mannion running riot in the house of ireland on nassau street...), and not considering the human aspect side of things. I agree the current management are not up to the job. Agreed that AL needs a smarter set of managers.

With regards to this debate i'm speaking as someone who has seen this thing happen in one of my former companies. A clueless management putting forward incoherent plans to put the company back into profitability, plans fail, so their solution would be to make another 30 or 40 staff redundent in the next quater. They did this for 3 years and seemed genuinely surprised at the plummeting staff morale. Needless to say no member of the senior managment or the board of directors ever resigned.

FlutterinBantam

Very simple horse.


Check to overtime stats of Aer LIngus versus its competitors.

Muggy Dev

Interesting article in today´s Indo:

http://tinyurl.com/yrdvgd

....with share price down to 1.92 euros and shocking half year results, sentiment in the market beginning to turn against the company.

FlutterinBantam

Obviously the workforce are still living in overtime land!!!!

Gobán Saor

Muggy Dev wrote: »

The Ryanair numbers were never rebutted by Aer Lingus (or indeed,anyone else)when this claim was made.

Wrong. They did. See the Aer Lingus defence document.

Muggy Dev wrote: »

So Mr Saor, perhaps you might take a squint at this:

http://www.ireland.com/newspaper/breaking/2007/0830/breaking12.html?via=rel

...and advise us of what steps you would take to put this company back on a sound footing.

Well, you've got a business with low percentage staff costs (about 25%) and yet a high level of customer interaction with staff (Check-in, cabin crew etc.) That suggests that a management strategy of constantly attacking staff pay and conditions while awarding management handsome bonuses is likely to fail.
They COULD try the Southwest Airlines model (which Ryanair claims to but doesn't) - where there is a philosopy of treating staff well and management and staff work together to improve the business. See, it pays to be nice to your staff. Southwest happens to be the most heavily unionised airline in the US and also, consistently, the most profitable. Go figure.

FlutterinBantam

You ARE assuming that the same enlightened thinking from both sides that exists in Southwest occurs in Aer Lingus??

heh heh..heh heh heh....no sir ,it does not.