The Defence budget for 2011 has been cut by 4%, the only details I can find so far are:
Reduction in the provision for allowances for overseas deployment by the Defence Forces. Reduction in the number of civilian employees attached to military installations. Acquisition of replacement equipment, building and maintenance projects will be deferred or cancelled.
I've no idea how this will affect the Air Corps, I'm sure the details will come out in time.
http://www.budget.gov.ie/budgets/2011/2011.aspx
