IASS pensions settlement causes pre-tax loss at Aer Lingus
Aer Lingus suffered a pre-tax loss on the back of its €190m payment to settle the dispute over the underfunded Irish Airlines Superannuation Scheme (IASS).
The Irish flag carrier suffered a pre-tax loss of €180.3m, but would have seen a profit of €72m had it not been for a number of one-off costs, including the €190.7m payment to launch a new defined contribution (DC) plan.
The plan will offer benefits to members of the IASS that have seen their future IASS payments reduced as part of the proposal to tackle the more than €700m deficit, which the company was barred from solving through additional contributions.
The airline’s preliminary results for 2014 showed that the Pensions Authority had signed off on the IASS funding proposal in late December, with the €190m immediately placed in an escrow account.
“Aer Lingus Limited has also been involved in a separate set of discussions concerning the Pilots Scheme, a single employer scheme for Aer Lingus pilots,” the report added.
It noted that, following negotiations with the pilots’ union, a funding proposal for their scheme had been submitted to the regulator in early December.
The company also disclosed professional and legal fees of €6.4m in 2014, which it said “principally” related to settlement talks relating to the IASS.
Aer Lingus currently faces a lawsuit from the pensioners of the IASS, with a group representing pensioner interests’ threatening a High Court case worth €170m over the benefit cuts suffered by retired workers.