Dramatic restructure planned for Iberia
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British Airways’ partner airline Iberia is to be restructured under plans to help the carrier compete better with low-cost alternatives.
Parent company IAG laid out plans that will see the airline’s network cut by 15%; 25 fewer aircraft and 4,500 jobs lost to help cut its cash losses. There will be a focus on ancillary revenue and a new website design to help its proposed turnaround in profitability to EUR600m (GBP479m) minimum from 2012.
IAG warned of a more ‘radical reduction’ if it cannot reach agreements with unions by 31 January, particularly on jobs and long-haul routes from Madrid, but said it would enter the talks in ‘good faith’.
“Iberia is in fight for survival. It is unprofitable in all its markets. We have to take tough decisions now to save the company and return it to profitability. Unless we take radical action to introduce permanent structural change the future for the airline is bleak,” said Rafael Sánchez-Lozano, chief executive of Iberia.
It comes after IAG’s third quarter results blamed Iberia and Hurricane Sandy for its operating loss of GPB95m. Willie Walsh, chief executive of IAG said the group performance is “coming back to the levels seen in 2011”, with BA seeing operating profit of GBP228m compared to Iberia’s operating loss of GBP209m.
