DUBLIN: Aer Lingus employees approved proposals to plug the airline’s pension deficit yesterday, a major hurdle in resolving an issue that analysts say has weighed on the Irish carrier’s share price for years.
The scheme, which employees at Aer Lingus share with other aviation industry workers, has a deficit of more than ¤700m ($874.16m) compared to Aer Lingus’ market capitalisation of ¤800m.
Under the deal, which must still be approved by regulators and shareholders, Aer Lingus has offered to make a one-off ¤191m payment. The payment does not apply to a separate pilots’ pension scheme.
Just over 70 percent of eligible Aer Lingus employees voted to approve the deal in a ballot organised by the Irish Congress of Trade Unions, Aer Lingus said in a statement.
Shares briefly surged 10 percent on the news and were 7 percent ahead at 1440 GMT.
“One of the main milestones has been achieved today,” Chief Executive Christoph Mueller told journalists at a briefing to announce new transatlantic routes. “We have been waiting for this for five years.”
If the deal is approved by pension scheme trustees, the airline plans to ask shareholders to back the agreement in December. It also needs approval from the country’s pension authority.
The scheme has dogged Mueller since he became chief executive in 2009 and its resolution would be a major milestone ahead of his planned departure early next year.
Reuters
