With an estimated 100 jobs set to go at Palma airport as part of a restructuring plan by Spanish airport authority AENA, the Balearic government fears that Iberia's restructuring programme could have a negative impact on the Balearics. Iberia is in (a) fight for survival, Iberia's chief executive Rafael Sanchez-Lozano said in a statement issued by parent group International Airlines Group (IAG), which also owns profit-making British Airways.
Iberia is unprofitable in all its markets. We have to take tough decisions now to save the company and return it to profitability, said Sanchez-Lozano. 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, he added yesterday.
Sanchez-Lozano said the Spanish and European economic crisis has impacted on Iberia, but its problems are systemic and pre-date the country's current difficulties.
IAG said it was announcing a comprehensive plan to save Iberia after record losses -- and return it to profitability.
Local job losses
The parent group unveiled a reduction of 4'500 jobs to safeguard around 15'500 posts across the airline -- meaning Iberia was on course to lose almost one quarter of its staff.
But, Balearic government spokesperson, Rafael Bosch, said yesterday that not only is the regional administration worried that some of those 4'500 jobs could be lost here in the Balearics, vital regional air links between the island and the mainland could be lost as a result of the shake up.
Bosch called for caution in the short term, but said that the government will be studying IAG's plans for the future of Iberia and, if necessary, will fight to maintain Iberia's services to and from the Balearics.
Travel discount cuts
With the region already facing the threat of having its travel discounts reduced or scrapped completely, the government is greatly concerned about the future of domestic air links to the Balearics. Bosch said that he understands why IAG is taking such a step when faced with rising fuel prices and mounting competition from the low cost airlines but he stressed that he hopes that the Balearics does not become a victim of the airline's troubles.
IAG added that a deadline of January 31, 2013, had been set to reach agreement with unions over the cuts. 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, IAG said.