Spain's Iberia will shed 4,500 jobs, nearly a quarter of its 20,000-strong workforce, as part of a series of permanent structural changes to salvage the airline, its parent company said Friday.
The restructuring plan for Iberia, which posted a record operating loss of 262 million euros ($340 million) for the first nine months of 2012, is aimed at restoring profitability, the International Airlines Group, formed in 2011 by the merger of Iberia and British Airways, said in a filing with Spain's CNMV stock market regulator.
The announcement of Iberia's restructuring, which also will involve eliminating 25 airplanes - mostly short-haul aircraft - and reducing operating capacity by 15 percent in 2013, coincides with the release Friday of IAG's third-quarter results.
The holding company lost 39 million euros ($50 million) in the first nine months of the year - due in large part to troubles at Iberia - after posting a 338 million euro profit for the same period of 2011.
IAG said a Jan. 31, 2013, deadline has been set for reaching a deal with the unions, but that if no agreement is signed more job cuts and a greater reduction in Iberia's size and operations will be necessary to safeguard the company's future.
Iberia CEO Rafael Sanchez-Lozano acknowledged that the plan is harsh, but said if profound structural changes are not put in place the "company's future is bleak."
He said Iberia was losing money at the tune of 1.7 million euros ($2.1 million) per day across all of its markets.
Although the sovereign debt crisis battering Spain - and much of the rest of Europe - has affected Iberia, the airline's problems are structural and predate the country's current economic woes, Sanchez-Lozano said.
Spain's two largest labor federations, the CCOO and UGT, and the Sepla pilots' union rejected the restructuring plan for Iberia.
Francisco Rodriguez, who heads the UGT's airline division, said it would dismantle the company and places exclusive blame for "management's failure" on the workers.
Rodriguez, who said Iberia informed the unions that the changes are not negotiable, slammed the plan as "radical" and told reporters that it "deserves a radical response," although he did not elaborate. EFE