The owner of British Airways today announced plans to axe 4,500 jobs as it attempts to stem losses at its Spanish airline Iberia.
International Airlines Group will cut Iberia’s capacity by 15 per cent and downsize its fleet by 25 aircraft as it battles to revive an operation which made losses of £210m in the first nine months of this year.
Iberia’s troubles and the impact of superstorm Sandy, which grounded flights into and out of the US east coast last month, mean IAG expects an operating loss of about £96m this year.
The group made an operating profit of £216m in its busy third quarter trading period, with BA achieving profits of £228m over the first nine months of this year.
Iberia’s staff, some of whom went on strike earlier this year, were today threatened with “deeper cuts and more radical reduction” if an agreement is not reached with their unions by January 31.
IAG chief executive Willie Walsh said the turnaround plans were critical for the future of Iberia and safeguarding about 15,500 posts across the airline.
He added: “For too long the narrow self interest of the few has damaged the long term future for many.
“We will not hesitate to take the necessary steps to protect the interests of our shareholders, our customers and our employees.”
In today’s results, IAG said BA’s revenues growth for the quarter was held back as the London Olympics reduced demand for business travel.
However there are signs of a recovery in the current quarter, although the airline group continues to face rising fuel costs, with the bill showing a 21 per cent year-on-year increase in the three months to September 30.
Mr Walsh added that the integration of bmi into British Airways, completed last month, had been achieved smoothly and efficiently.