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Radical overhaul of operations at Iberia sees 4,500 jobs go

Radical overhaul of operations at Iberia sees 4,500 jobs go

International Airlines Group (IAG) has outlined what it describes as a “comprehensive plan” to restructure troubled carrier 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, while network capacity cut by 15 per cent in 2013, at the airline focuses on profitable routes.

The plan is designed to add €600 million per annum in profitability at Iberia by 2015.

IAG also stated 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.”

In the short term, the transformation will focus on stemming the losses and creating a profitable route network.

This will 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 the natural 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 €1.7 million 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.”