Irish airline Aer Arann to cut jobs, routes

DUBLIN/IRELAND: Irish regional airline Aer Arann announced on Monday it plans to cut up to a quarter of its work force and reduce services to cope with Ireland's deepening recession.

Aer Arann specializes in connecting Ireland's smaller regional airports and major islands with Dublin, Britain and western Europe. It is privately owned but receives state aid for operating most of its routes within Ireland.

The Dublin-based airline said it was opening negotiations with labor unions in expectation of laying off up to 100 employees, about a quarter of its work force.

Aer Arann also plans to cut routes or flight frequencies, and will try to lease four of its 13 aircraft to other airlines. The airline declined to detail any of its plans to reduce services. Aer Arann grew throughout the Celtic Tiger boom of 1994-2007 in line with Ireland's swelling disposable incomes and appetite for foreign travel.

Even as Ireland's economy began to falter earlier this year, Aer Arann kept adding new routes to Amsterdam; Bordeaux, France; Faro, Portugal, and Malaga, Spain. Last year it carried more than 1.1 million passengers.

The airline is owned by a private consortium led by Galway-based entrepreneur Padraig O Ceidigh and does not publish earnings. It competes on some routes with much bigger Irish rivals Ryanair and Aer Lingus.

Ireland has officially fallen into recession after recording negative economic growth for the first two quarters of 2008. The government and independent economists forecast that the recession will continue until at least 2010 while unemployment already at a 10-year high of 6.3 percent will rise above 7 percent soon.