Aer Lingus Board Backs Pensions Payout
Aer Lingus's board of directors has backed a proposal to make a once-off contribution of EUR€140 million (USD$183 million) to employee pensions as part of a deal to avoid possible strikes at the Irish airline.
The deal aims to address a hole in a pension scheme which employees at Aer Lingus share with other aviation industry workers and which had a deficit of over EUR€700 million at the end of 2011.
The threat of a large payout has weighed on the Aer Lingus share price in recent years.
The proposal will be put to shareholders following talks with unions and pension fund trustees and will be implemented if staff and union members also agree, Aer Lingus said in a statement on Friday.
Low-cost airline Ryanair, which owns 30 percent of Aer Lingus and this year failed in a third takeover attempt, has said it opposes a pension pay-out, but does not have enough votes to block it alone.
Britain's Competition Commission is to rule by July on whether to force Ryanair to sell its stake in Aer Lingus due to competition concerns.