I will be as brief as I can. The first thing to point out is that Aer Lingus is one of the most profitable airlines in Europe if not in the world. It is publicly owned and by any standard a national asset. This is the backdrop from which we approach the matter. The accumulated profits of Aer Lingus are in excess of €200 million for the past three years and further profits of €95 million are projected for this year. The market value of the company varies between €500 million and €750 million with the slots at Heathrow constituting an unknown quantity as they are traded on the grey market. While the value of the slots is very difficult to quantify, all the experts agree it is substantial.
SIPTU represents approximately 2,500 workers and the bulk of the effects of cuts will be felt among our members. I will not dwell on the background of what happened with the survival plan, which was discussed at the last meeting of this committee. I simply restate that the survival plan was fully supported by the workforce that delivered 2,000 jobs cuts in total, pay freezes and consequential work changes. Our members delivered and the company's fortunes have been sharply contrasted with those of airlines such as Sabena and Swissair, which went to the wall, and Alitalia, which did not wake up and smell the coffee until very recently. Aer Lingus has a successful workforce, which has proved its point and embraced change.
On 26 July this year, there was a further demand from the board of the company for substantial job cuts of 1,325. This demand is based on a business plan that is predicated on a new business model which despite the protestation of the management seeks to emulate Ryanair. Our members' jobs are required to be sacrificed to pay for this low-cost model. While the model has proved itself in the short-haul market, it is highly speculative as far as long-haul flights are concerned. No evidence, plans, schedules or financial projections have been advanced for the other pillar of this proposal, which is the pioneering role on longer-haul routes. The cuts are to be achieved through outsourcing existing jobs, which means, in essence, that the jobs of our members will be yellowpacked. They will be taken from our members and handed to outside contractors. Third-party handling denies revenue streams to the company. There will be a discontinuance of major functions, such as cargo, downsizing and undermining and diminishing of conditions for workers such as cabin crew. There is a plethora of mechanisms by which the cuts are to be achieved.
Our members have protected themselves against unilateral action. Our preference is to negotiate and while we will do that, if the company seeks to impose change unilaterally on our members, we are in a position to react. It is not something we wish to do, but it is important the company knows we can. We are opposed to this plan. Aer Lingus is a highly profitable company and the jobs cuts are extreme by any yardstick. Our members have proven that they are well capable of delivering continuous change and have done so even since the survival package was introduced. Another important point is that most of the staff of Aer Lingus chose to remain and put their shoulders to the wheel during very difficult times. It is ironic that their thanks is a demand for further job cuts.
Despite all of this, there are no plans within Aer Lingus to build up a capital reserve to provide for future funding and fleet replacement. We seem to be proceeding on a wing and a prayer. To categorise what we have been presented with as a business plan is a misnomer. Not only is outsourcing a proposal to yellowpack our members' jobs, it is in clear conflict with commitments entered into by Government with the trade union movement on measures to prevent a race to the bottom. It is also being carried out in a manner that is in conflict with transfer-of-undertakings legislation and the acquired-rights directive in so far as quotations are being sought that do not provide for the legitimate right of all our members in areas such as catering to transfer to a new contract with the same rates and conditions of employment.
The effect of the plan in other areas will be to pile on more work. The discontinuance of cargo services has offended the community and business. While the business plan places reliance on the development of a long-haul venture, it does so in a highly speculative manner with no evidence whatsoever. We are in a facilitation process and intend to reach a negotiated solution. Clearly, we require the company to do the same. I share the concerns of my colleague, Mr. Cody, that Aer Lingus may seek to enforce change.
On the issues of ownership and the Goldman Sach's report, the Irish Congress of Trade Unions has elaborated the general position of the unions to the Cabinet sub-committee. Public ownership and staff co-operation have been the proven basis on which Aer Lingus has recovered to find itself highly profitable. The twin pillars of public ownership and staff co-operation have provided stability and social partnership, the mechanisms by which Aer Lingus has developed in a highly competitive environment. We need look no further than New Zealand for an example of how not to proceed. Having been privatised, Air New Zealand had to be taken back into public ownership at enormous cost to the taxpayer.
In summary, our position is that Aer Lingus is not in difficulty. It is a highly profitable company that bears no comparison with any other traditional flag carrier. It has done the business. The contribution of the workforce has been enormous and decisive. The business plan put forward by Aer Lingus is not a plan for business but a plan to cut jobs out of a desire to emulate certain other low-cost carriers and their practices. The proposal to outsource jobs in particular is in conflict with commitments entered into by Government and, we are advised, in conflict with the law governing the transfer of undertakings and the rights of employees. The proposal to be a pioneer in lower cost, long-haul travel lacks substance and certainly fails to constitute a basis on which to demand job cuts.
While our members have indicated by their actions a commitment to negotiate change on an agreed basis, it cannot be at the price of handing over their jobs in a race to the bottom. The Government as a social partner has a key obligation to engage with the trade unions on the future of Aer Lingus and on measures to maintain standards of employment and to avoid a race to the bottom.
I reiterate that there is no impediment to the State investing in Aer Lingus in accordance with EU rules. That point has been covered by my two colleagues. What is needed is a measured strategic approach involving the social partners and primarily the workforce in agreeing the future for our national airline, based on the preservation of the maximum number of sustainable secure permanent jobs, in accordance with agreed terms and conditions. Most importantly, such an approach needs to recognise the legitimate concerns of consumers, the community and other legitimate stakeholders in the delivery of service and the discharge of the functions of the national airline recognising its vital role in the infrastructure of the State and its contribution to economic development.
