Most Aer Lingus watchers and staff members expected a certain level of unvarnished communication from German chief executive Christoph Mueller when he took up his position a few weeks ago.

Last week, as the airline announced yet another cost cutting plan, the airline's staff finally got what they expected. "We do not have enough work for all the people employed by Aer Lingus,'' was the simple, frank and sparse message from Mueller, a former TUI Travel executive.

Cuts are cuts, but the method of communication has changed over the years depending on the chief executive running Aer Lingus. Dermot Mannion had a grand fatherly image, despite his relative youth, which made staff reductions appear on the surface somehow less threatening.

Willie Walsh, while certainly not universally popular at the airline, managed to garner some staff approval due to the generous terms of redundancy he was able to extend to those leaving the carrier.

Even the famous Cahill plan at the airline, unveiled in 1993, was sweetened for the workers who got shares in Aer Lingus as part of Employee Share Ownership Plan (ESOP).

But Mueller was not prepared last week to sweeten the message either in his form of communication or in terms of the financial benefits on offer. The airline's statement, which was signed off by Mueller, even mentioned the unthinkable for Aer Lingus unions – compulsory redundancies.

Mueller is no stranger to angry groups of striking workers. He famous walked directly into a crowd of striking workers at Sabena in August 2001 shortly after the airline announced 1,600 job losses. A BBC picture of Mueller from the period shows him walking past the group impassively as he is eased through the crowd by security men.

It's hard to imagine a similar scene at Dublin Airport just yet, but there is no doubt that Mueller has been given a strict mandate by the company's board and shareholders to slash costs and "right size" the business for a deep and severe recession.

While last week's announcement should be seen in that context, the broader question of Mueller's ultimate destination has yet to be asked by most analysts of the company. What is Mueller's long-term plan for the carrier?

The Sunday Tribune understands that in the long term, Mueller would like to execute a trade sale, not to Ryanair, but to one of the 'big three' of European aviation – British Airways, Lufthansa or Air France-KLM. He believes, as do many shareholders, that if he can make Aer Lingus profitable, it could attract a takeover bid, particularly with its array of Heathrow slot pairs and its relatively new Airbus fleet.

Earlier this year, shareholders made their views known to Aer Lingus about the company's seemingly endless drift. The shareholders were fed up with the erosion of the airline's cash position, its controversial decision to "revise" its 2009 earnings guidance and its overly ambitious fleet renewal programme.

The company and its board were told to get their financial house in order. The message was clear: Dermot Mannion had to go and a replacement had to be brought in to "right size" the business, curb the capital expenditure plans and stop the cash draining away. Despite early indications that Brian Dunne, the airline's former chief financial officer would return to take on this task, Mueller was parachuted in instead.

With a long track record in aviation, albeit mixed, Mueller was given strong support as the ideal candidate by Aer Lingus chairman Colm Barrington. So far the market has placed its confidence in Barrington's choice. Most of the UK and Irish aviation analysts for instance are recommending their clients to either retain the company's shares or to increase their positions.

NCB Stockbrokers last week boldly said it expected the airline to "near" breakeven point in 2010 on an underlying basis, subject to the proviso that sales remain relatively stable. If Mueller can get his package of cost reductions through and find some way to curb losses at the long-haul part of the company, he may yet retain the faith of his shareholder base.

But what then? The plan, from talking to sources at the company, is to lure in a trade sale buyer and in that way finally return value to the carrier's long-suffering stockholders. While the government will always have a political excuse to block a Ryanair bid, an offer from an Air France or a Lufthansa would come under the broad category of "any port in a storm".

Clearly neither Air France-KLM are in a position to snap up smaller regional carriers at present and in Lufthansa's case it has enough problems devising a strategy to make its recent purchase of BMI worthwhile. Nevertheless, two years from now, things could be different and Mueller is believed to hold the view that Aer Lingus will attract not a shred of buying interest while it is in its current parlous state.

As one executive said last week: "The cash is the key. Keep and maintain the cash and we give ourselves a chance of possibly getting involved in some international tie-ups in the future''.

Cost savings of €97m certainly go some way to doing this and the cash reserves at Aer Lingus, plus its Heathrow slots, mark the carrier out from other regional players which are currently on the sales block, like for example Czech Airlines. This airline, which is also laying off staff, recently only attracted a solitary bid in an auction and that came from a local consortium of businessmen, not from one of the large trade sale buyers.

The threat from Aer Lingus to acquire an Airline Operating Certificate (AOC) in the UK and start flying from the UK to destinations outside Europe is not seen by aviation sources as very significant at this time. Very few significantly sized European carriers, in fact arguably none, have ever managed to depart their chief hub and start earning most of their revenue outside their home market.

Aer Lingus would effectively be flying long-haul or semi-long haul destinations if it went the AOC route and its track record in recent times on such routes has been patchy at best (anyone remember Dubai?). Its brand is barely known outside Ireland, the UK and the US, so one wonders how hard it would be to generate originating traffic from markets in the Africa, the Middle East or Asia.

Still the threat to pick up an AOC and move elsewhere is one way to concentrate minds among the unions who last week voiced fierce opposition to the cost cutting plan. But there is probably little they can do to hold Mueller back. Ironically the scale of Mueller's cash position gives him a certain strength. While the airline would prefer to avoid a destabilising strike and its consequent impact on booking levels, most analysts were sketching in a loss for 2009 calendar year anyway, so a strike over the next two months would be far from fatal.