IMPACT cabin crew disruption - Aer Lingus

Dublin & London, 25 January 2011: Aer Lingus Group plc (“Aer Lingus”, “the Group”) notes media speculation regarding the business impact of the current dispute with IMPACT cabin crew members. This dispute arises as a result of the ongoing refusal by these employees to operate revised rosters.

Aer Lingus commenced its “Greenfield” cost reduction programme in late 2009 in order to ensure the future viability and cost competitiveness of the Group. A core element of the “Greenfield” programme was the requirement by cabin crew to achieve 850 flying hours per annum. This requirement was accepted by 93% of cabin crew in a ballot in March 2010 and was subsequently affirmed under legally binding arbitration by the Labour Relations Commission 5 months ago.

Aer Lingus has developed revised rosters in line with international best practice to achieve the 850 flying hours per annum requirement, as agreed under the “Greenfield” programme. However, IMPACT cabin crew members refused to constructively engage with management in the development of these rosters and instead commenced a work-to-rule programme in October 2010. IMPACT cabin crew members subsequently refused to operate these revised rosters on the final phase of their introduction on 17 January 2011. As a result of this refusal, approximately 180 cabin crew have now been removed from the Group’s payroll.

As a commercial entity, Aer Lingus has a reasonable right to expect that all parties with whom it has contracts, including staff, honour their contractual commitments. For operational and financial reasons, Aer Lingus can no longer tolerate a situation where IMPACT cabin crew members unilaterally decide that previously agreed contractual agreements do not apply to them. As a result, Aer Lingus is today commencing disciplinary proceedings against these staff members, which could ultimately result in the termination of their employment with the Group.

Aer Lingus will apply its best efforts to minimise passenger disruption caused by this non-cooperation by IMPACT members over the coming days. Despite these efforts, Aer Lingus currently expects it will be forced to cancel up to 10% of its flight schedule, subject to daily review. The Group will be proactively cancelling flights on high frequency routes in order to be able to offer customers alternative travel options as soon as is practicable.

Aer Lingus will continue to lease aircraft and crews from other airlines in order to minimise passenger disruption. At current levels, the financial cost of these leases is not material in the context of the Group’s operations. However, a continuation of the dispute could have an adverse impact on passenger bookings which could, in turn, have a potentially significant impact on the Group’s trading performance.

The responsibility for any adverse financial impact of this disruption is attributable directly to those IMPACT cabin crew members who have decided not to operate their agreed rosters. This decision has been taken at the expense of Aer Lingus, its passengers and shareholders, including a significant number of current and former employees who own shares in the Group.

Aer Lingus will make further announcements as appropriate.

ENDS