Five questions answered on… the IAG-owned Iberia job losses
International Airlines Group (IAG), who owns British Airways, has announced it will cut a significant amount of jobs on its Iberia airline.
How many jobs are IAG cutting?
Around 4,500. It has set January 31 next year as a deadline to reach an agreement with trade unions on redundancies – if they fail to meet this deadline it will further reduce its capacity, AIG have warned.
Why is IAG cutting these jobs?
According to Iberia’s Chief Executive, Rafael Sánchez-Lozano, the airline is in "fight for survival" mode and is currently "burning €1.7m every day". This is what he told The Telegraph.
What else did he say?
Justifying the job cuts Sánchez-Lozano added:
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.
What do the figures say?
For the first 9 months of the year IAG reported a pre tax loss of €169m. This is compared to a €394m pre-tax profit last time. Also in the same period last year passenger revenues also grew from €10.1bn to €11.6bn.
What other airlines does IAG own?
IAG also owns British Airways and bmi and has 398 aircraft flying to 200 destinations. It recently put in a bid to take over Spanish budget airline Vueling for €113m (£90m). The company was only formed in January 2011 and is listed on the London and Spanish Stock Exchanges.