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Iberia job losses “inevitable”

3 Aug 2012 by BusinessTraveller
International Airline Group (IAG) has announced its latest financial results, showing a first-half operating loss after exceptional items for Iberia of €263 million, compared to a profit of €13 million over the same period for British Airways. The group as a whole made a half-year operating loss of €253 million before exceptional items, the majority of which was accounted for by €38 million of restructuring costs at Bmi. CEO Willie Walsh said that there remained a “stark difference” in the performance of IAG’s subsidiaries BA and Iberia, calling Iberia’s problems “deep and structural”. Walsh said that the group was working on a restructuring plan for Iberia which he anticipated being finalised by the end of September, and admitted that “Inevitably, we will not be able to avoid job losses as part of this process”. Walsh said that the restructuring was “likely to include short term downsizing, network reshaping to deliver higher unit revenues and a re-evaluation of all aspects of the business to deliver competitive costs and service to enable long-term profitable growth”. IAG said that the underlying British Airways trading conditions remain firm and that the Bmi integration is “on track”, but warned that “any benefit from an easing of fuel prices has been more than offset by the deterioration in Spanish economic conditions”. The group had previously targetted a break-even operating result this year, but said that “in the light of the Spanish macro headwind, we now expect to make a small operating loss in 2012”. For more information visit iairgroup.com, ba.com, iberia.com. Report by Mark Caswell
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