Cambia IberiaBy IAG | November 9th, 2012 | Posted in Aviation News | No Comments
Cambia is Spanish for change. The Spanish people have been hammered with an economic meltdown (along a few other EU nations). The changes the Spaniards have been facing has been forced on them. Forced change is nasty. Nobody wants it.
So how about this news?
IAG outlined what it describes as a “comprehensive plan” to restructure Iberia. The Spanish flag-carrier will see 4,500 jobs go, with routes and aircraft also to be cut. Some 25 aircraft will be removed from the fleet as network capacity is cut by 15% in 2013, as the airline focuses on profitable routes. The plan is supposed to add €600m per year in profitability at Iberia by 2015. IAG also said it will launch a series of new commercial initiatives, designed to boost unit revenues, including increased ancillary sales and website redesign.
Rafael Sánchez-Lozano, Iberia’s chief executive, said: “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. However this plan gives us a platform to turn the business around and grow.” Remember when Iberia would not get into bed with BA because of its pension gap? How times have changed.
The changes include suspending loss making routes and frequencies and ensuring there is effective feed for profitable long-haul flights. A deadline of January 31st, 2013 has been set to reach agreement with the unions over job losses. If agreement is not reached, deeper cuts and a more radical reduction in the size and scale of Iberia’s operations will take place to secure long haul traffic flows at Madrid and safeguard the company’s future, Iberia said. “The Spanish and European economic crisis has impacted on Iberia, but its problems are systemic and pre-date the country’s current difficulties,” continued Sánchez-Lozano. “The company is burning €1.7m every day. Iberia has to modernise and adapt to the new competitive environment as its cost base is significantly higher than its main competitors in Spain and Latin America.”
What is not mentioned here is that Iberia is buying Spanish LCC Vueling. What? Well yes they are and in this regard they are following the strategy at other EU network airlines. They will drive the low cost traffic to the in-house LCC. We hope Iberia employees see the writing on the wall. In today's Spain, you better embrace change and do what you have to so you stay employed. The hangover from the years of partying are proving to be hell.