Some Spanish airlines have been forced to suspend payments of airport taxes to the Spanish AENA airport authorities and yesterday the chairman of Spanish flag carrier Iberia, Xavier de Irala, painted a gloomy picture for the Spanish airline industry. Xavier de Irala yesterday said that last year, because of September 11, was the airline industry's worst ever year and that a reduction in the number of airlines is inevitable in the mid-term because of carriers going into liquidation or merging with others. Xavier de Irala said that Iberia was the only airline in Europe to have posted profits at the end of the last quarter, but he stressed that the knock on effects of September 11 had been “drastic” for the industry. “The airline industry has never had such a bad year,” Xavier de Irala said, explaining that losses have reached 17.000 million euros (2.8 billion pesetas,) while the airline industry lost 4.000 million euros (665.544 million pesetas) during the Gulf War. Iberia has introduced a tough cost cutting plan for this year and next and Irala said that the key reasons for the demise of Sabena and Swiss Air was bad management, advising Spanish airlines that the secret to surviving this crisis will be reduce operating costs. With the bulk of Spain's airlines based in Palma, cost cutting could cost jobs in Majorca and amidst all the turmoil in the industry, there are attempts by other parts of Spain, in particular Madrid, to try and lure the airlines away from Palma to the mainland. This will only add to the woes of the 5'000 people employed by the airlines in Majorca who are already worried about their future.


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