Aer Lingus has warned that it is considering compulsory redundancies and reviewing its operations in Cork and Shannon Airports.
The airline has announced an operating loss of €316m for the second quarter of the year as the coronavirus crisis continues to hit the aviation industry.
In a statement, Aer Lingus said Irish Government policy has made things even more difficult.
“The catastrophic impact of COVID-19 on the aviation sector has been compounded in Ireland by the implementation of the most restrictive travel policies in Europe and the failure to implement supports for the sector,” it said.
It said “significant redundancies” are now required right across the business. They will be implemented on a voluntary basis where possible; however, the airline they will make them compulsory if necessary.
The airline is also “reviewing the scale” of its flying programme from Cork and Shannon Airports as well as the “ongoing viability” of its bases in each region.
Aer Lingus is owned by the International Airlines Group (IAG).
IAG Chief Executive Willie Walsh said the Aer Lingus was not in danger of folding and insisted it will be competitive when the industry recovers.
He warned that the recovery process will be a lot longer than many people originally thought.
“We were hoping to get back to about 50% of our capacity in July,” he said. “We are flying at about 20% today so that is a much slower build-up in recovery that we had originally expected.
“I think that is consistent with a lot of other airlines. I think the industry consensus would be that it will be 2023, probably 2024 before we get back to 2019 levels of passenger demand.”
The losses Aer Lingus announced for the second quarter of the year compare to a €78m profit in 2019.
Its passenger revenues are just over a third of what they were last year.