Nov. 09 - British Airways owner IAG will axe almost a quarter of Iberia's workforce and cut capacity to save the loss-making Spanish flag carrier and restore group profitability. Joanne Nicholson reports.
▲ Hide Transcript
▶ View Transcript
Four thousand, five hundred is today's daily digit in Europe.
That's how many jobs are to be cut at the Spanish airline Iberia after its parent company IAG posted a 96 percent drop in nine-month operating profit.
IAG - which was formed by the merger of British Airways and Iberia last year - also plans to reduce the Spanish carrier's fleet by 25 aircraft.
In a statement, IAG chief executive Willie Walsh said: We want Iberia to be strong and successful.
For too long the narrow self interest of the few had damaged the company's long term future.
He then added that IAG would not hesitate to take the necessary steps to protect the interests of shareholders, customers and employees."
News of the cuts comes a day after IAG offered 113 million euros to take full control of the low-cost airline Vueling
It's Spain's second largest carrier by passenger numbers and has prospered despite the weak economic climate.
That bid along with the move to cut jobs will surely be hot topics when company officials meet with investors in London today.
Iberia's Chief Executive, Rafael Sánchez-Lozano follows the sentiment of the parent company.
He said Iberia is burning 1.7 million euros every day, and that it has to modernise and adapt to the new competitive environment.
Spanish unions have been expecting layoffs at Iberia for months because of the country's recession, as well as a shifting of Iberia's short to medium routes to the low-cost carrier Iberia Express.
But there's still uncertainty over IAG's ability to continue to grow the airline.
Analysts now think IAG will use Vueling to provide short flights to link up with for Iberia's long-haul network, taking advantage of its lower cost-base.