Aer Lingus must shed 800 jobs

Bloxham Stockbrokers have warned that Aer Lingus must shed 800 jobs or 20% of it's workforce as the airline faces steeper than predicted losses of €150m for the current year.

Bloxham said that in order for the airline to avoid a financial crises a non fuel related saving of €250m is required.

In the downgrading of Aer Lingus, Bloxham also said that the airport departure tax of €10 introduced by the government his spring will have a detrimental impact on load factor this coming winter, a period which the broker forecasts will see Aer Lingus 'sharply cutting fares' in the face of intense competition. "As a result, yields on short-haul could fall 15% alongside a 20% drop in long-haul yields," it said.

The once famed Aer Lingus cash pile is also now under serious threat. From a high of €757m in late 2007, the war chest is forecast to shrink to less than €300m by early next year. If the rate of decline in cash reserves is not stemmed beyond that date, Aer Lingus will have just 18 months to survive without external intervention.