* Parent company has spent 700 mln euros on Iberia revamp
* Airline now well on path to recovery-Walsh
By Rhys Jones
LONDON, Oct 22 Recovering Spanish carrier Iberia
will return to profit next year for the first time since 2010,
the chief executive of its parent International Airlines Group
The Spanish airline became unprofitable in all markets,
including long-haul, following its merger with British Airways
in 2011. It was hit by competition from low-cost rivals and
high-speed trains, labour disputes and a recession that has left
a quarter of Spaniards out of work.
IAG has spent around 700 million euros on restructuring
Iberia, which reduced losses for the first time in almost three
years in the three months to the end of June.
"Iberia was in a significant crisis but is well on the path
to recovery. Iberia will be profitable next year, like British
Airways (BA) and Vueling already are," IAG boss Willie Walsh
said at the Airport Operators Association annual conference in
London on Tuesday.
IAG, Europe's third-biggest airline group by
market value, owns Iberia, Barcelona-based budget carrier
Vueling, which it bought earlier this year, and BA.
Earlier this year Walsh said Iberia, Europe's biggest
carrier to Latin America, would return to profit at some point
"Iberia is still loss making at the moment but we will bring
them back to profitability next year," said Walsh, without
specifying which measure of profit.
IAG has cut 1,700 jobs at the Madrid-based carrier and aims
to take that figure to 3,000 by 2014 as part of plans to focus
on long-haul routes which it believes can become profitable.
Many full-service carriers such as BA have slashed jobs and
shelved growth plans as they grapple with high fuel prices and a
weak economy and fight to defend market share against nimbler
low-cost rivals such as Ryanair and easyJet.
Lufthansa, itself in the middle of a deep revamp,
on Tuesday issued 2013 profit guidance that fell short of
expectations, driving its shares lower.
Walsh also said that IAG would look at its legal options
over Italy's rescue of struggling carrier Alitalia, which he
says constitutes state aid which is prohibited under European
Italy has patched together an emergency 500 million euro
bailout of near-bankrupt Alitalia, including the state-owned
post office and banks Intesa Sanpaolo and Unicredit
"We're going to look at it (legal options) carefully because
it is blatant state aid and we're opposed to it. Europe has got
to stand up and implement the rules that exist," said Walsh.