Aer Lingus executives have warned that over "North of 1,000" people are likely lose their jobs as the struggling airline battles with unions to cut costs.
The airline needs to save $146 million by 2011. It was only last year when the airline restructured and cut costs. Both the unions and airline executives have failed to reach a compromise.
Chief executive Christoph Mueller announced that non-profit routes would be closed in the New Year if demands were not met.
The Aer Lingus board of directors held an "extraordinary" meeting yesterday and outlined its line of action. Mr Mueller said, "The board has decided to move," and "It is regrettable."
Mr Mueller said the 676 job cuts sought has now climbed over 1,000 and revealed that they had been "so close to an agreement" with union officials and that the deal "was almost ready for a signature."
The breakdown of talks followed seven weeks of tough negotiations.
Agreement was nearly reached with nearly all Aer Lingus staff, except for pilot and cabin crew.
The pilots had offered a 10 per cent cut in wages and other savings. The pilots alone offered savings of $45 million. However, pilots wanted an extra 4 per cent stake in the airline. and executives felt that the stake was "too high" and the concessions were "not sustainable."
The pilots already own 4.5 per cent of Aer Lingus and a share and saving scheme proposed by the pilots would have netted them a further $18 million in shares.
It is highly likely that a strike will occur if Aer Lingus fails to compromise with the unions.
Impact represents the Aer Lingus cabin crew and has submitted a cost saving plan to the airline. The union has announced that it is still "available to discuss alternatives with the company."
The National Implementation Body is likely to intervene in the dispute. SIPTU official Gerry McCormack has said the union "would welcome an intervention to get this resolved."