Aer Lingus must drive down its operating costs in its home country to UK levels to survive, the airline’s corporate affairs director said, as cuts involving more than 15 per cent of staff were announced.

Enda Corneille, the corporate affairs director, said that Aer Lingus was also applying for a UK operating licence to set up a subsidiary carrier that would operate from its Gatwick and Belfast bases.

“Our operating costs in the UK are 40 per cent lower than in the Republic of Ireland — that’s the kind of savings we need to achieve,” Mr Corneille said.

He was speaking after Irish trade unions said that they would fight a restructuring plan that would cut 676 jobs in an effort to reduce annual operating costs by €97 million (£89.5 million) before the end of 2011. The troubled semi-state-owned airline, which employs 3,900 people, said that the majority of redundancies would be sought on a voluntary basis.

However, Mr Corneille painted a bleak picture of the consequences of fighting what amounts to a rescue plan. “We’ve lost €93 million for the first half this year and there are forecasts of up to €150 million losses for the full year, which we aren’t contesting,” he said. “We need to stabilise the company and stop the cash-burn, but we can’t do that until we get the costs down to, or near to, the level of our competitors. And it has to be achieved quickly.”

He said that a six-week consultation period would close on November 18. “If we don’t get agreement by then, we will have to consider what other options we have,” he said.

The long-haul sector was dragging down the airline, with many fares not even covering the taxes. Mr Corneille said that Aer Lingus’s operating costs were twice as expensive as those of Ryanair, the rival Irish airline that has launched two takeover bids and holds nearly 30 per cent of its shares, yet half as productive.

He acknowledged that yesterday’s announcement was “quite stark and shocking ... many people wouldn’t have seen the depth of the problem before”.

Siptu, the Republic’s largest union, called the rescue plan “extreme and draconian and an overreaction” to the difficult economic climate.

Impact, the trade union, described the cuts as “savage and severe”. Unite, which represents skilled technical workers at Aer Lingus, said that it would “resist any attempt to impose job cuts or change the conditions on which its members are employed, without prior negotiation and agreement”.

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