The scale of the planned shake-up at Aer Lingus took many by surprise when the airline announced it on Thursday.Up to 500 jobs, one out of every 13 staff, could go as the airline grapples with rising costs and increased competition for transatlantic business.Aer Lingus will stop flying from Dublin to Denver, Las Vegas and Minneapolis in the US and to Split in Croatia, this autumn and reduce some other services to summer only.Unions representing the airline’s 6,500 workers expressed shock at the number of job losses proposed, warning that they would oppose compulsory redundancies.Aer Lingus made it clear that it needed to cut costs when it announced in May that it had lost €103 million in the three months to March 31st, €48 million more than during the same period in 2025.Chief executive Lynne Embleton said the airline would scrutinise costs, down to suppliers’ bills, to meet targets set by its parent, International Airlines Group (IAG).[ Aer Lingus to cut up to 500 jobs and drop routes out of DublinOpens in new window ]By then, Aer Lingus had closed its base in Manchester, from where it flew to New York, Miami and Barbados.Subsequent internal memos to staff showed the company was weighing cuts to its schedules, while it left several senior managers go earlier in the summer.Airline group IAG, which also owns British Airways and Iberia, demands that its airline subsidiaries earn operating margins of 12-15 per cent before it will invest to allow them expand their businesses.[ Darragh O’Brien to axe Dublin Airport cap ‘as soon as possible’Opens in new window ]Broadly, that means that IAG expects every €1 spent on day-to-day business to return between €1.12 and €1.15. In Aer Lingus’s case, that return is around €1.10.So it must increase that return while dealing with higher costs, including fuel, whose prices have soared as a consequence of the US-Iran war.IAG ordered 70 per cent of its needs for this year in advance, but Aer Lingus still has to buy the other 30 per cent for around double what it paid last year.Then it faces tougher competition for North American business. US carriers including United Airlines, Delta and JetBlue have increased aircraft and seats on their flights to and from Dublin by up to 45 per cent.Will the State’s plan for the Carlton Cinema site revitalise O’Connell Street? Listen | 25:33Aer Lingus is cutting operations as politicians pass a law ending a 32 million annual limit on passengers at its biggest base, Dublin Airport, something it has sought for years.Meanwhile, regulators propose reducing what Dublin can charge airlines for passengers by 15 per cent next year, prompting Ryanair to pledge an additional two million seats to the Irish airport in 2027.Consequently, not everyone agrees that job cuts and a partial retreat from North America are the solution.Irish Airline Pilots Association (Ialpa) president Capt Daniel Langan argued that while Aer Lingus’s margins may lag BA and Iberia, it outperforms most other European carriers, some of whom will lose money this year.His union also questions the Manchester closure, as it says that business was making the required 15 per cent return.Ialpa and fellow union Fórsa look set to take a tough stance in talks with Aer Lingus, which looks set for a hotter than usual summer.