UPDATE 2-IAG's Iberia signs initial wage deal with cabin crew

Tue Feb 25, 2014 6:37am EST

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MADRID Feb 25 (Reuters) - Spanish airline Iberia, part of International Airlines Group, said on Tuesday it had reached an initial agreement with its cabin crew over measures to improve productivity, a key step to ensuring its viability.

Iberia has lost business to low-cost rivals and has been negotiating new labour conditions with its unions since the end of last year. It signed a deal with its pilots on Feb. 13 and is still in talks with ground crew.

The company, with a history of cabin crew strikes over wages and staff numbers, said the measures include linking salary rises to group profitability from 2015, similar to an accord reached with pilots earlier this month.

"(The preliminary agreement) is a fundamental step to building the new Iberia, reducing its cost structure and establishing the cornerstones for profitable development," Iberia Chairman Luis Gallego said in an e-mailed statement.

In November, IAG raised its 2015 operating profit goal to 1.8 billion euros ($2.5 billion) from 1.6 billion, citing savings from integrating budget carrier Vueling, improved margins at BA and a recovery at Iberia.

Shares in IAG, which is due to present fourth-quarter results on Friday, were trading 0.7 percent higher in Madrid by 1120 GMT, in line with the Spanish blue-chip index.

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