Shannon Airport has announced it is to issue temporary layoffs, a voluntary severance scheme, reduced working hours and incentivised career breaks in widespread reductions to their cost base.
Correspondence was issued to staff on Monday by CEO of Shannon Group, Mary Considine informing them of the need to implement cuts across the Airport. Although some Ryanair flights have resumed since last Wednesday, it is only operating at 20% of targeted traffic for the month of July.
Forecasted passenger numbers are expected to be down 70% on traffic last year, Considine outlined to staff. She cautioned that current economic predictions estimate it will be “at least three years” before the aviation industry returns to 2019 levels.
Revenue has taken an “immediate and unprecedented decline” as a result of COVID-19, the CEO stated. “In response, we made difficult decisions” which included temporary layoffs and a shorter working week for employees. Discretionary spending has also been tackled by management which includes eliminating the costs of contractors and reducing energy output.
Considine highlighted, “It is now clear that these initiatives are not enough to bring the Airport to anywhere close to break even in the medium term”. Thus, management have decided to introduce “more substantial” reductions including the amount of employees.
Noting that the aviation sector was battling in unprecedented times, the Clare native said it is facing its biggest challenge to date. “Taking the actions we are proposing will allow us to secure the future of the Airport and enable us to rebuild a thriving Shannon Airport”.
A voluntary severance scheme is to be launched and employees with two years service as of the first day of this year will be eligible. The terms of the scheme include a statutory redundancy payment of two weeks’ pay per year plus one week, an additional payment for four weeks of service. The total sum payable is capped at 104 weeks’ pay while for those aged over 60 the total payment is capped at the lower figure of two years’ pay or half of the remaining pay up until retirement. A €5000 lump sum is to be added for reskilling, training and educational purposes.
Applications for career breaks of six months to three years for staff members who have two years service given from January 1st of this year will be considered as part of the cost-cutting measures. Management are also looking to receive applications for a temporary or permanent reduction to working hours of employees.
Over the coming weeks, management are to begin accepting applications for the severance scheme, career breaks and reduction to working hours. A review of the management structure of the Airport is to also take place.
“Immediate actions” are needed to cut the cost base for those remaining employed in the Airport to “align the headcount in the business with the level of scheduled passenger traffic”.
There will be a continuation of reduced working hours for staff that remain on with more temporary layoffs to also follow with the end of Government’s Temporary Wage Subsidy Scheme scheduled for mid-August.
All employees earning more than €30,000 per annum will be issued with a 20 percent pay cut. The reductions will not reduce the earnings to less than €30k for any employees earning more than the amount. The payroll reduction is to be in place from September 1st of this year until April 1st in 2023.
Management have also identified that a twelve hour team-based shift working arrangement is needed in the Shannon Airport Fire Station.
Clare TD, Cathal Crowe (FF) criticised the timing of the announcement. “I know the airport is under immense pressure at this time but surely they could have waited for the Aviation Taskforce to conclude its work before considering staff reductions”.