Aer Lingus will unveil the most radical cost-cutting plan in its history within weeks as its bankers shut off funding to the airline because of the rate of cash it is burning through, the Sunday Tribune has learned.

The airline has sought to fund aircraft purchases through standard aircraft finance deals, but lenders have told the carrier that until it pushes through a radical new re-structuring plan no borrowings can be extended.

The plan, which dwarfs any previous cuts at the airline, will involve large-scale job losses and outsourcing across a range of services. The airline has the main components already in place but wants new chief executive Christophe Mueller to be available to make the announcement.

The recent attitude of aircraft finance companies has focused management attention on the problem of the company's cash burn.

None of the main Irish banks provides aircraft finance and it is understood the specialist lenders have told Aer Lingus its current operating losses are too high to extend fresh financing.

Aer Lingus is determined not to pay any of its leasing or aircraft purchase payments through its own cash and wants to use standard aircraft financing agreements instead.

Like all airlines, Aer Lingus needs aircraft financing companies to underwrite its short-haul fleet orders which have not been cut back as severely as the orders for long-haul aircraft.

Ryanair recently awarded mandates to a syndicate of banks for $1.6bn of aircraft financing for 55 aircraft delivered between November 2009 and October 2010.

The syndicate of banks is comprised of BNP Paribas, Calyon, and Sumitomo Mitsui Banking Corporation. It is understood these type of banks and financial providers are not prepared to fund the requirements of Aer Lingus.

Aer Lingus is to publish its results for the first six months shortly and it is likely that it will not be able to provide any guidance on its 2010 financial performance.

Operating losses for the first half of the year are described as "disappointing" by sources within the airline.