International Airlines Group has confirmed no agreement has been reached between Iberia and its trade unions after the airline outlined transformation plans in November last year.

Iberia will, therefore, press ahead with the previously announced capacity reduction of 15 per cent for 2013, IAG said in a statement earlier.

IAG will also move forward on alternative plans to return Iberia to break-even, in terms of operating cash flow, by the second half of this year and restore Iberia to an acceptable level of profitability by 2015.

Willie Walsh, IAG chief executive, said: “We are disappointed that no agreement has been reached.

“Iberia is ready and willing to negotiate with the trade unions.

“We are determined and united to implement the necessary changes to secure the future survival and viability of Iberia.”

Iberia said it would radically overhaul its operations in November 2012, with the loss of as many as 4,500 jobs.