AER LINGUS is to lay off 100 staff by the end of this year, saying it needs to cut payroll costs in order to remain competitive.

The airline said this morning it would launch a voluntary severance scheme hoping to reduce the workforce by 100 by the end of this year.

The airline spent €266.7 million on payroll costs last year, for a staff base of over 3,500.

Chief executive Christoph Mueller said the cuts to staff numbers were necessary after performance data for the first quarter of 2013 was released.

The airline recorded an operating loss before exceptional items of €45.5 million in the first three months of this year – €9.4 million more than the same period in 2012.

It said this was largely as a result of planned changes to its long haul fleet, a slight weakening in its performance on UK-Ireland routes, and the start-up costs of its ‘wet lease’ arrangement with Virgin, where Aer Lingus will supply aircraft and staff to operate flights between London and Edinburgh on Virgin’s behalf.

Changing exchange rates and higher airport and fuel charges had also had an impact.

“While we had expected increased operating costs in the first quarter, the Q1 performance highlights the need to continue to review our cost base to protect profitability for the rest of 2013 and beyond,” Mueller said in a trading update this morning.

“In line with the ongoing requirement to streamline our organisation structure and identify cost saving initiatives, we are launching a voluntary severance programme, with a goal of reducing headcount by approximately 100 staff by year end.”

Total passenger numbers were up by 2.2 per cent for the first quarter, with long haul passenger numbers up by 5.6 per cent. Fares per passenger were 6.5 per cent higher than the same period in 2012.

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