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Topic: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: BreninTW
Posted 2012-11-08 23:53:23 and read 2667 times.

The BBC is reporting that IAG will cut 4,500 jobs at IB, a quarter of the fleet will be disposed of, and network capacity cut by 15% in an effort to turn the company around.

http://www.bbc.co.uk/news/business-20264407

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: PHX787
Posted 2012-11-09 00:21:03 and read 2718 times.

Has IB retired the 343s yet? I smell retirement for those if not disposed of yet. With the 343 retirement, (if that,) I see those pilots being laid off or transferred to different stations with other pilots being shut off. Also, any 50 seaters in their regional fleet, i see being shedded.

I'm not an IB expert, which routes will be slashed in this restructuring?

Side note here, in my thread about other companies laying off workers, it listed IB as one of them, but every other company was an American company. Kinda strange.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: BreninTW
Posted 2012-11-09 00:34:21 and read 2725 times.

My guess is that IB will be cutting regional routes and domestic flying. The (relatively) strong South American routes are likely to be kept.

I think that some of the US routes will be moved to BA.

According to airfleets.net, IB has 98 aircraft, with 20x A319, 25x A320, 19x A321, 17 each of the A343 and A346.

IB's fleet info is slightly different:

A319: 19
A320: 28
A321: 19
A343: 17
A346: 17

I suspect the A319 will be removed from the fleet, since they must have quite high CASM. The A343 should be replaced by the eight A330 that IB has on order.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LHRFlyer
Posted 2012-11-09 00:41:06 and read 2738 times.

Some highlights of the plan:

http://www.iairgroup.com/phoenix.zht...-newsArticle&ID=1756759&highlight=

Quote:
Transformation Plan Highlights:

· Stem Iberia's cash losses by mid-2013;

· Turnaround in profitability of at least €600 million from 2012 levels to align Iberia with IAG's target return on capital of 12 per cent by 2015;

· Network capacity cut by 15 per cent in 2013 to focus on profitable routes

· Downsizing its fleet by 25 aircraft - five long haul and 20 short haul.

· Reduction of 4,500 jobs to safeguard around 15,500 posts across the airline. This is in line with capacity cuts and improved productivity across the airline.

· New commercial initiatives to boost unit revenues including increased ancillary sales and website redesign.

· Discontinue non-profitable third party maintenance and retain profitable ground handling services outside Madrid.

· The transformation will be funded from Iberia's internal resources

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.

As well as halting Iberia's financial decline we will establish a viable business that can grow profitably in the long term. Short and medium haul operations will be transformed to compete effectively with low cost carriers who have successfully established themselves in Iberia's home market. The plan will see comprehensive productivity improvements and the introduction of permanent salary adjustments to achieve a competitive and flexible cost base.

Iberia has many advantages. It has an excellent geographical position to serve Latin America, along with historical ties; a strong brand and the ability to grow long term at it hub.

A deadline of January 31, 2013 has been set to reach agreement with the unions. 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.

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.

"The Spanish and European economic crisis has impacted on Iberia, but its problems are systemic and pre-date the country's current difficulties. 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.

"Time is not on our side. We have set a deadline of January 31, 2013 to reach agreement with our trade unions. We enter those negotiations in good faith. If we do not reach consensus we will have to take more radical action which will lead to greater reductions in capacity and jobs".

Willie Walsh, IAG's chief executive said: "We want Iberia to be strong and successful. For too long the narrow self interest of the few has damaged the long term future for the many. We will not hesitate to take the necessary steps to protect the interests of our shareholders, our customers and our employees.

"This turnaround plan is critical for Iberia and for the future of Spain. A strong and profitable Iberia can create jobs and boost tourism, a key driver in Spain's economic recovery".

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: migair54
Posted 2012-11-09 00:42:31 and read 2735 times.

Quoting BreninTW (Reply 2):
I suspect the A319 will be removed from the fleet, since they must have quite high CASM. The A343 should be replaced by the eight A330 that IB has on order.

some of them have a new business seat to operate long routes like Malabo, Lagos, Moscow, Tel Aviv.

I´m sure they will cut some domestic flying because nowadays in Spain trains are very good and very fast.

We have seen the first reductions AMS, OSL and Berlin will be the first ones, and i´m sure they will transfer more routes to Vueling.

Another good idea could be open a codeshare agreement with RENFE (Spanish National trains) to offer full tickets from for example Pamplona or Zaragoza to any destination. If i´m not mistaken Air Europa already does and other airlines in the world also.

Quoting PHX787 (Reply 1):
Has IB retired the 343s yet? I smell retirement for those if not disposed of yet.

Some of them left already and the new A333 will join soon, so i guess some more will leave soon, specially on routes to HAV, SDQ, and west coast of the USA.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: scouseflyer
Posted 2012-11-09 00:47:40 and read 2724 times.

Do they still have flights operated for them by sub-contractor airlines (was on called Audelli?) and if so could more business be transferred that way?

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: runway23
Posted 2012-11-09 00:54:40 and read 2723 times.

Wonder if any of the shorthaul fleet that is being cut at IB could potentially migrate north to LGW to replace the 734 fleet. Unless they transfer them to Vueling.

Would seem like quite a sensible thing to do.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-09 00:58:10 and read 2729 times.

Quoting BreninTW (Thread starter):
effort to turn the company around.

Turn around or dismantle...? Let's wait and see.

Quoting BreninTW (Thread starter):
a quarter of the fleet will be disposed of

No, the article says:

Iberia is cutting its 156-strong fleet by 25 aircraft, and reducing 15% of its network capacity,

Now the question is, how much of that are net cuts, and how much (if any) is just being transferred from IB mainline to VY (or IB Express if that can still be resurrected).

In any case, IMO IB does not have an overcapacity problem, but a cost base problem.

Quoting PHX787 (Reply 1):
Has IB retired the 343s yet?

They are to be replaced one-to-one by A333's starting to arrive in january. But A343's, despite a.net A340-myths, are not what make IB lose money. Their long-haul network is profitable, but no longer so profitable as to cover the huge losses in short haul as was done in the past.

Quoting PHX787 (Reply 1):
any 50 seaters in their regional fleet, i see being shedded.

Was already happenning before this announcement, Air Nostrum has a bunch of ATR72-600's and CRK's on order, the CR2's are progressively leaving the fleet. They will end up with a fleet of AT7's, CR9's and CRK's. In any case Air Nostrum charges pretty steep fares so I doubt that's the biggest money loser, even with 50-seaters.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: kl911
Posted 2012-11-09 01:13:25 and read 2737 times.

Quoting LHRFlyer (Reply 3):
Willie Walsh, IAG's chief executive said: "We want Iberia to be strong and successful. For too long the narrow self interest of the few has damaged the long term future for the many. We will not hesitate to take the necessary steps to protect the interests of our shareholders, our customers and our employees.

This is good news for everybody, exept ofcourse the 4500 person who will have to find other jobs.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: sweair
Posted 2012-11-09 01:15:11 and read 2743 times.

Air Nostrum was a very nice operation, I flew them last month. I dont think Air Nostrum has the worst numbers of Iberia.

Love the CR2, it is like flying with a race car, in windy weather that was one of my best flights ever.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: AIR MALTA
Posted 2012-11-09 01:26:34 and read 2742 times.

Quoting runway23 (Reply 6):
Wonder if any of the shorthaul fleet that is being cut at IB could potentially migrate north to LGW to replace the 734 fleet. Unless they transfer them to Vueling.

I don't think this is likely as BA and IB have different engine types for the Airbuses... I think they might transfer to Vueling along Iberia Express and call it Iberia Express by Vueling... This seems to be a sensible thing to do.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: kl911
Posted 2012-11-09 02:46:27 and read 2739 times.

Quoting AIR MALTA (Reply 10):
call it Iberia Express by Vueling

Great, I'm happy I don't have to handwrite tickets anymore.  

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-09 03:11:00 and read 2733 times.

This whole thing is IMO mainly a reaction to this:

"The Spanish High Court has overturned the original arbitration process that nominally ended the conflict between Iberia and pilots union SEPLA, saying it was technically flawed and should be restarted."

http://www.flightglobal.com/news/art...are-one-after-court-ruling-378590/

The initial plan was to transform IB short-haul gradually by having IB Express take over it. As that plan is at least temporarily dead now, IAG is now firing the employees outright.

Quoting LHRFlyer (Reply 3):
Downsizing its fleet by 25 aircraft - five long haul and 20 short haul.

Cutting 5 long-haul a/c is terribly shortsighed IMO. IB's current long-haul fleet is already overstretched as it is, and the LatAm network is IB's strongest asset and the place to make money - it should actually grow rather than shrink if IB is truly to be turned around. Corks are already popping at the LAN-TAM offices.   

As for short haul, as I said let's see how much is a net reduction or if any aircraft are just transferred to VY.

Quoting LHRFlyer (Reply 3):
· Discontinue non-profitable third party maintenance and retain profitable ground handling services outside Madrid.

The wording is too unclear - does the "outside Madrid" also include maintenance? Because IB just opened some pretty big maintenance facilities in BCN, that would be a bit contradictory.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: clydenairways
Posted 2012-11-09 04:01:54 and read 2737 times.

Quoting r2rho (Reply 12):
This whole thing is IMO mainly a reaction to this:

"The Spanish High Court has overturned the original arbitration process that nominally ended the conflict between Iberia and pilots union SEPLA, saying it was technically flawed and should be restarted."

I think you are right, a lot of this is probably scare tactics to try and put pressure on the unions. I think they will try and transfer more work to IBS once it's taken off mainline.

I think they will cut a couple of long haul routes temporarily in order to show they are serious about their threats, i see these as possibly being in North America where BA can cover any temporary gaps through the LHR hub.
These routes can then be re-instated in the future when the lower cost base is in place.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: blackwidow
Posted 2012-11-09 05:01:15 and read 2738 times.

Quoting runway23 (Reply 6):
migrate north to LGW to replace the 734 fleet

19 x A319 would be a nice direct replacement...

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: garpd
Posted 2012-11-09 05:23:46 and read 2740 times.

Quoting r2rho (Reply 7):
Turn around or dismantle...? Let's wait and see.

What possible good would dismantling Iberia do?

Quoting r2rho (Reply 12):
Cutting 5 long-haul a/c is terribly shortsighed IMO

I think Willie Walsh and his crew know what they are doing. Remember how WW turned Aer Lingus and British Airways around from lumbering, loss making legacies to modern profit making lean airlines.

If he and his team say they need to cut this amount of ships and personnel to make IB work then I'm confident the future will prove them right.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: fcogafa
Posted 2012-11-09 06:10:34 and read 2736 times.

Stand by for much industrial action!

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: garpd
Posted 2012-11-09 07:01:59 and read 2742 times.

Quoting fcogafa (Reply 16):
Stand by for much industrial action!

WW knows how to deal with strikers!

Besides, when there is talk of losing 4500 people. Strikers only risk putting themselves in the crosshairs!

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: kaitak
Posted 2012-11-09 08:27:38 and read 2746 times.

Quoting BreninTW (Reply 2):
I suspect the A319 will be removed from the fleet, since they must have quite high CASM.
Quoting blackwidow (Reply 14):
19 x A319 would be a nice direct replacement...

I know EI is on the lookout for more A319s and since their current four came from IB (although some sold pre-delivery), IB might be the ideal source for more.

BA is a possibility of course, but BA might prefer IAE powered aircraft (still, if they could get them at the right price ...)

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: clydenairways
Posted 2012-11-09 08:44:22 and read 2738 times.

Quoting garpd (Reply 15):
I think Willie Walsh and his crew know what they are doing. Remember how WW turned Aer Lingus and British Airways around from lumbering, loss making legacies to modern profit making lean airlines.

   Willie Walsh is a veteran at this sort of thing now, he knows exactly how to play this game. Expect IB to be turned around.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: MFC
Posted 2012-11-09 09:37:21 and read 2740 times.

Iberia's routes to LOS, ACC, SSG, CAI, TLV and DME are operated by their 319s and probably profitably, so don't expect them to get rid of all of their 319s.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: aamd11
Posted 2012-11-09 10:15:48 and read 2743 times.

Quoting AIR MALTA (Reply 10):
I don't think this is likely as BA and IB have different engine types for the Airbuses

That wasn't an issue for BA for most of the last decade...


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Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: BAForever
Posted 2012-11-09 14:21:02 and read 2740 times.

Quoting garpd (Reply 15):
Quoting garpd (Reply 15):
I think Willie Walsh and his crew know what they are doing. Remember how WW turned Aer Lingus and British Airways around from lumbering, loss making legacies to modern profit making lean airlines.

If he and his team say they need to cut this amount of ships and personnel to make IB work then I'm confident the future will prove them right.
Quoting garpd (Reply 15):

I agree. IB has long been a bloated airline with staff who have no idea of how to treat customers and have taken the whole company for a ride for many years, making exorbitant pay demands in return for nothing but contempt to the owners and the management.

The chickens have come home to roost! IB's problems are entirely of their own making!

Tough management and tough decisions are required. If they are taken.. then IB can survive and everybody left in the company will have a future.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCQ83
Posted 2012-11-09 16:10:28 and read 2737 times.

I could see BOS easily dropping, I am actually surprised they are still flying here with all the troubles they have, and being a relatively new route (it hasn't been around for more than 5 or 6 years).

Destinations MAD-USA non-stop (in brackets the position among North American metro areas in terms of GDP).

(1) JFK (AA/IB) HUB, (DL) HUB, EWR (UA) HUB
(2) LAX (IB "on hold") HUB
(3) ORD (IB) HUB
(4) IAD: not served
(5) IAH: not served
(6) DFW (AA) HUB
(7) PHL (US) HUB
(8) SFO: not served
(9) BOS (IB)
(10) ATL (DL) HUB
(11) MIA (AA/IB) HUB
...
(24) CLT (US, seasonal) HUB

Basically, Boston is the only destination served from MAD (IAG included) in the US that is not a hub of any airline. Also, it could be easily served by IAG via LHR (up to 4 daily flights with AA/BA) or JFK (a short hop with AA). And IB needs to send their A340s, whilst AA to DFW can fly a smaller B763.

The only smaller (in terms of total GDP) metro areas served non-stop from MAD to the US are ATL ("the" DL hub, not much to say about it), MIA (AA hub and probably a lot of tourism and businesses due to the "Latin American" nature of South Florida) and the "odd" US seasonal to CLT which I wonder whether it will stay for long as well.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LAXintl
Posted 2012-11-09 16:16:50 and read 2752 times.

Quoting SCQ83 (Reply 23):
(2) LAX (IB "on hold") HUB

Frankly they should forget LAX.

Its been tried 2x prior by IB and failed. Only this week just extended the winters suspension now till April 2013.

No point in running summer only service chasing low yielding tourist imo.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCQ83
Posted 2012-11-09 16:22:53 and read 3207 times.

Quoting BAForever (Reply 22):

I can't anything but agree... IB service is just abysmal. I avoid them at all costs (everytime I fly BOS-MAD I do an 1-stop even when they are quite often the cheapest - and only-non stop option -). And everytime I end up flying IB, it makes me remember why I actually avoid them. Their Southern European government worker mentality is just unbearable. It might have worked 20 years ago when they were a public company (so who cares about profit), but not in 2012 when they are a private corporation that theoretically has to compete with Ryanair or Easyjet for intra-European traffic, Lufthansa or KLM flying to LATAM and LAN or Avianca flying to Europe.

I am though quite positive and I think BA's management will end turning them up. Alitalia was in a similar position a few years ago and they seem to be getting better. Still, IB has a superb T4, the location of MAD for Europe-LATAM and US-Southern Europe/Middle East or Western Africa/US-Europe is pretty good, Spain is the 4th most visited country in the world and, despite the crisis, it is a relatively large local market (+45M people).

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: FI642
Posted 2012-11-09 19:47:45 and read 3206 times.

IB is the test bed. Once WW gets away with what he wants to do there, then BA. He already is preparing to farm out some stations in the USA. While I understand the need for profit, quality and service need to count for something.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LHRFlyer
Posted 2012-11-10 06:14:59 and read 3361 times.

Quoting FI642 (Reply 26):
IB is the test bed. Once WW gets away with what he wants to do there, then BA.

BA has already been through huge structural reform. That's why it's now so profitable. The pressure to be more efficient will never go away but the big structural issues have been dealt with.

Remember BA had the chance to set up a "BA Express" type operation with bmi but the pilots had the foresight to negotiate with the company to prevent it, something Iberia pilots would do well to learn from.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: lightsaber
Posted 2012-11-10 08:22:57 and read 3328 times.

I hope the costs are brought in line for a I see MAD being the IAG growth hub. To do that service and costs must improve. It amazes me looking at MAD's network and how little traffic there is to the East compared to the other large European hubs. It will take a restructuring to make those routes viable. Once they are, the connection opportunities will allow IB to grow.

Now what will they do with the A346s? Once LAN builds a large 787 fleet, the competition to South America will change dramatically. IB must not just become profitable for today, but do so for the competitive environment they will face in 5 years.

Quoting LHRFlyer (Reply 3):
· Turnaround in profitability of at least €600 million from 2012 levels to align Iberia with IAG's target return on capital of 12 per cent by 2015;

Wow... actually run an airline like a business...

Quoting r2rho (Reply 7):
Their long-haul network is profitable

That contradicts:

Quoting LHRFlyer (Reply 3):
"Iberia is in fight for survival. It is unprofitable in all its markets.

Is it really all markets? Or is that "Iberia is unprofitable overall?"

Quoting garpd (Reply 15):
What possible good would dismantling Iberia do?

Stop the bleeding and replace it with right priced subsidiaries.

Quoting FI642 (Reply 26):
While I understand the need for profit, quality and service need to count for something.

Under lean service, only provide what the customer will pay for. Airlines need to become modern businesses.

Lightsaber

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LipeGIG
Posted 2012-11-11 11:20:34 and read 3246 times.

Amazes me how IB do not see the obvious in regards to the key position they enjoy in terms of Latin America and do not take advantage of !
In fact IB needs a smaller plane than A343 to run certain routes to Latin America (with less than 260 seats) as they have a great airport (MAD) , two very strong markets (MAD and in a less extent, BCN) and the condition to run flights from key markets such as Mexico City and Buenos Aires, to secondary markets in Spain.

In fact if they continue with the regular schedule , putting all the eggs into MAD, they will make Avianca and Latam life much, much easier.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-12 04:55:09 and read 3180 times.

Quoting lightsaber (Reply 28):

Now what will they do with the A346s? Once LAN builds a large 787 fleet, the competition to South America will change dramatically. IB must not just become profitable for today, but do so for the competitive environment they will face in 5 years.
Quoting LipeGIG (Reply 29):
Amazes me how IB do not see the obvious in regards to the key position they enjoy in terms of Latin America and do not take advantage of !
In fact IB needs a smaller plane than A343 to run certain routes to Latin America (with less than 260 seats) as they have a great airport (MAD) , two very strong markets (MAD and in a less extent, BCN) and the condition to run flights from key markets such as Mexico City and Buenos Aires, to secondary markets in Spain.

In fact if they continue with the regular schedule , putting all the eggs into MAD, they will make Avianca and Latam life much, much easier.

Fully agree and this is why I believe that the current LatAm operation should not be shrunk as planned, but at worst maintained as is. Their long-haul fleet seems already overstretched, their routes are not overserved and every one they cut will be handing pax directly over to LAN-TAM at a one-to-one ratio. Assuming IB does recover in a few years, by then it may be too late and they will have to exhaustingly fight their way back simply to recover the marketshare that they have today.

As for LatAm from secondary Spanish cities - not yet, not with the current cost base, and not without any A332/788-sized aircraft. Some ex-BCN with VY feed can be done, no more.

I maintain that IB's profitability problems are due to high labor costs combined with low productivity and remaining organizational structures from the government-owned era - but not because it's route network or fleet are overstretched.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: mad99
Posted 2012-11-13 00:28:25 and read 3121 times.

Quoting MFC (Reply 20):
TLV

When I've flown to tlv it was on a 321?

Quoting SCQ83 (Reply 25):
service is just abysmal

I don't think ib is any worse or better than the rest but then i only fly economy.

Anyway, bad news for the workers.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCL767
Posted 2012-11-13 00:52:44 and read 3112 times.

Quoting LipeGIG (Reply 29):
In fact if they continue with the regular schedule , putting all the eggs into MAD, they will make Avianca and Latam life much, much easier.

Indeed, LAN has recently shown an interest in opening new routes to BCN and FCO and plans to open more routes to Europe via Brazil flying alongside TAM. LAN will continue to increase competition with IB as LAN plans to launch the BOG-MAD route next year. Also, IB will soon decrease frequency on the MAD-LIM route...

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-13 03:57:27 and read 3086 times.

More info is becoming available:

IB is "proposing" its employees to align their pay and work conditions to those of VY. This can mean pay cuts of up to 47% for pilots and up to 58% for cabin crew. On average, pay reduction will be 35%. In exchange, IB Express would not be expanded further. According to the article, salary conditions at IB Express are even lower than at VY. IB top management would lower their pay by 25% and keep their golden parachutes.

sources in Spanish:
http://economia.elpais.com/economia/.../actualidad/1352750041_081800.html
http://www.elmundo.es/elmundo/2012/11/12/economia/1352735877.html

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCL767
Posted 2012-11-13 04:12:10 and read 3085 times.

Quoting r2rho (Reply 30):
Their long-haul fleet seems already overstretched, their routes are not overserved and every one they cut will be handing pax directly over to LAN-TAM at a one-to-one ratio. Assuming IB does recover in a few years, by then it may be too late and they will have to exhaustingly fight their way back simply to recover the marketshare that they have today.

Some analysts believe that the crisis at IB could open new opportunities for LATAM. LAN still has 8 B-767-316ERs on order with 4 new B763s joining the fleet this month and in December. LAN could increase frequencies on the LIM-MAD and UIO-GYE-MAD routes in the near-term and launch SCL-GRU-MAD and/or SCL-GIG-MAD if LATAM decided to increase flights into MAD. Very interesting times ahead.
Expertos creen que crisis de Iberia abriría oportunidades para Latam

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: FoxDelta
Posted 2012-11-13 04:27:41 and read 3062 times.

Quoting SCL767 (Reply 34):
IB top management would lower their pay by 25%

That is, they take this pay cut after it was raised by 56% not too long ago!!

Best of luck to all involved in this hard, but necessary IB restructuring.

Cheers   

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: MFC
Posted 2012-11-13 06:50:00 and read 3032 times.

Quoting r2rho (Reply 33):
IB is "proposing" its employees to align their pay and work conditions to those of VY.

I think that is a better option than reducing capacity and giving away the market to Latam and Avianca.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: PRAirbus
Posted 2012-11-13 17:03:42 and read 3009 times.

Anyone dares to guess which IB longhaul routes are not profitable or might get cut? Some destinations like BOS could be served seasonally by AA on 757L's. Even MAD-IAD by AA on a B757 might work. There was a rumor on the AA grapevine about a seasonal BOS-BCN on a B757, of course.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-15 05:47:54 and read 2976 times.

Quoting PRAirbus (Reply 37):
Anyone dares to guess which IB longhaul routes are not profitable or might get cut? Some destinations like BOS could be served seasonally by AA on 757L's. Even MAD-IAD by AA on a B757 might work. There was a rumor on the AA grapevine about a seasonal BOS-BCN on a B757, of course.
IAD and BOS are definitely candidates. Hopefully for IB, the route cuts will happen mostly on North American routes, which could be covered by AA direct flights at some destinations, or by BA through LHR (or in that case why not AF, or KL). As said, any cuts in LatAm will directly hand over the pax to LatAm and Avianca, who are only too eager to see IB make cuts there.

Meanwhile, the Spanish transport Minister is asking IB to present an integral plan rather than just cuts
http://www.elmundo.es/elmundo/2012/11/13/economia/1352812926.html

[Edited 2012-11-15 05:51:17]

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: peterinlisbon
Posted 2012-11-15 07:17:05 and read 2949 times.

"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."
When I read that I thought "are there any competitors left?" Air Madrid, Air Comet, Futura and Spanair have all gone bankrupt - my impression was that Iberia now had the Spain - Latin America market almost to itself and was taking full advange of that by milking its passengers with exhorbitant fares whilst giving the same poor service.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCQ83
Posted 2012-11-15 07:58:19 and read 2946 times.

Quoting r2rho (Reply 38):

IB hasn't flown to IAD for years. AA has no long-haul at all from IAD, so I wonder what would make change their mind in the case of MAD.

Quoting peterinlisbon (Reply 39):


There is definitely competition on the LATAM side: particularly LAN and Avianca... to a lesser extent Aeromexico or TAM. In Spain, Air Europa which has a better image (at least it does not have a bad image) and fleet, and being in Skyteam they can connect in MAD to the rest of Spain and a growing number of locations in Europe.

And obviously, the Euro carriers increasingly flying to LATAM, so Central/Northern European passengers do not need to connect in Madrid anymore. I would say that even from Spain, TAP (which flies to a good number of destinations in the country) is increasingly a popular destination to connection to LATAM (specially for Brazil).

Just anecdotally, I have a friend who has opened a branch of his business in LIM. He was telling me not long ago how he much preferred to fly LAN (Peru) from MAD rather than IB (they codeshare in that route, 1 daily each), and whether possible he would book on the LAN flight. Same, another friend has recently moved to SCL and the other day when he arrived, he posted in his FB how good his LAN flight was compared to any other time he had flown IB long-haul... the only comments I see on acquaintances in FB regarding IB is how they swear they will never fly with them again (specially from European or North/Latin Americans for whom it might be their first experience). Again, people with little to no interest in aviation other than just having a painless, comfortable flight.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: peterinlisbon
Posted 2012-11-15 09:59:58 and read 2934 times.

Yes, I've also heard a lot of bad things about Iberia from friends of mine - particulary rude, arrogant staff and stewardesses that have been there a long time and act as if they own the airline. I've flown with them a couple of times long-haul to Cuba and Rio and it wasn't that bad - nothing special, but no problems either. On the Madrid - London route, I used to always choose BA over Iberia as I prefer their service: it's nice to get served tea or coffee and a meal by someone that smiles at you rather than being offered a selection of overpriced and unappealing cold sandwiches.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: Dano1977
Posted 2012-11-15 10:20:24 and read 2933 times.

You should see some of the clap trap being spouted by from i can make out is a union.


Only available in Spanish - But i'm sure a good web based translator will help.

http://www.preferente.com/noticias-d...ga-las-pensiones-de-ba-234914.html

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: plunafan
Posted 2012-11-15 10:23:55 and read 2933 times.

From January 1 to March 31 Iberia will reduce MAD-MVD flights from 6 weekly to 4 weekly.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: MFC
Posted 2012-11-15 13:06:52 and read 2908 times.

Quoting Dano1977 (Reply 42):
You should see some of the clap trap being spouted by from i can make out is a union.

It is pilot's union.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: Stratofish
Posted 2012-11-15 15:14:36 and read 2927 times.

Quoting Dano1977 (Reply 42):
You should see some of the clap trap being spouted by from i can make out is a union.


Only available in Spanish - But i'm sure a good web based translator will help.

http://www.preferente.com/noticias-d....html

Well, these are some pretty serious allegations towards BA. Sounds like IB will become nothing more than a servant niche airline for BA misusing/exploiting the infrastructure IB has built earlier. According to SEPLA at least, but I sure put more weight into their words as into those of thug Willie Walsh.
But as always the truth is probably to be found somewhere between them.

I think the A343/333 is just the right size a/c for IB and some destinations like MEX for example can sure use a A346. Problem is the cabin comfort and service which deter many of flying IB.

Quoting peterinlisbon (Reply 39):
t I thought "are there any competitors left?" Air Madrid, Air Comet, Futura and Spanair have all gone bankrupt - my impression was that Iberia now had the Spain - Latin America market almost to itself and was taking full advange of that by milking its passengers with exhorbitant fares whilst giving the same poor service.

   Same here, Mexicana gone, AR being a shadow of what it once was, AeroSur gone, Avianca/Taca in Star thus being less interesting for anyone holding OneWorld Card(s)... OTOH I CAN imagine that BA is sabotaging their ops in one way or the other... no excuse for the poor service though.
On their home turf Ryanair is flying twice as much pax, so either they need to play hardball with them or concede the intra-Spanish market altogether.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: tonystan
Posted 2012-11-15 17:23:43 and read 2912 times.

Quoting SCQ83 (Reply 25):

I am though quite positive and I think BA's management will end turning them up.

Its IAG management that will pull the strings at IB, not BA!

Quoting LHRFlyer (Reply 27):

BA has already been through huge structural reform. That's why it's now so profitable. The pressure to be more efficient will never go away but the big structural issues have been dealt with.

BA was a profitable airline before WW ever came on the scene. Infact the only losses it has madein recent years have been under his leadership!

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCL767
Posted 2012-11-16 03:17:50 and read 2874 times.

Quoting SCQ83 (Reply 40):
LAN (Peru) from MAD rather than IB (they codeshare in that route, 1 daily each), and whether possible he would book on the LAN flight.

LAN Perú operates the route daily and code-shares on IB's 9 weekly flights on the route. However, IB will reduce frequency on the route to 7x weekly in January.

Quoting plunafan (Reply 43):
From January 1 to March 31 Iberia will reduce MAD-MVD flights from 6 weekly to 4 weekly.
IB will increase frequency on the MAD-SCL route from 7x weekly to 9x weekly during January and February. However, IB will decrease frequency on the MAD-PTY route from 6x weekly to 4x weekly year-round by the end of January. IB will also increase frequency on the MAD-GRU route from 11x weekly to 13x weekly in April. Also in April, IB will increase frequency on the MAD-MEX route from 11x weekly to 2x daily and BA will increase frequency on the LHR-MEX route to 5x weekly; IB will increase frequency on the MAD-HAV route from 5x weekly to a daily service.

[Edited 2012-11-16 04:01:01]

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-16 03:59:44 and read 2859 times.

Quoting peterinlisbon (Reply 39):
"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."
When I read that I thought "are there any competitors left?" Air Madrid, Air Comet, Futura and Spanair have all gone bankrupt - my impression was that Iberia now had the Spain - Latin America market almost to itself and was taking full advange of that by milking its passengers with exhorbitant fares whilst giving the same poor service.

The airlines you name were hardly serious competitors, just good examples of how not to run an airline. Only Air Europa provides some competition, but they are too small to be a threat, and AF-KL won't want them to grow that out of risk of cannibalizing their own LatAm ops.
But that is just the status today. Tomorrow (and not mid-term, but in the very short term) this is going to change, with LAN-TAM and AviancaTACA emerging as very serious threats. If IB retreats now, they may never regain that market again, because in the meantime it will have been occupied by those two airlines.

Quoting Stratofish (Reply 45):
http://www.preferente.com/noticias-d....html

Well, these are some pretty serious allegations towards BA. Sounds like IB will become nothing more than a servant niche airline for BA misusing/exploiting the infrastructure IB has built earlier.

Pretty serious accusations, but union or not, at least someone is providing numbers, while management only counters with empty statements. Coincidence or not, IB has gone down the drain ever since it was acquir... err merged with BA. Even though IB came from an envious financial position and 10 years of profits. I definitely think we do not know the whole truth about the BA-IB "merger".

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LHRFlyer
Posted 2012-11-16 05:06:50 and read 2845 times.

Quoting r2rho (Reply 48):
Even though IB came from an envious financial position and 10 years of profits. I definitely think we do not know the whole truth about the BA-IB "merger".

Not true at all. Iberia had been making operating losses before the merger. And the claim that there is some sinister conspiracy going on to boost BA at the expense of Iberia shows a fundamental misunderstanding of the nature of the merger and how IAG actually works. Neither airline can support the other financially.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: Dano1977
Posted 2012-11-16 06:35:09 and read 2840 times.

Quoting LHRFlyer (Reply 49):

There was one accusation, that BA took all the cash out of Iberia, and plugged the BA pension with it.


I would say with Iberia estimating to burning through 1.7million - 2million a day, that is where Iberia's cash has gone. Face it, Iberia hasn't made a profit in the last 5 years.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCQ83
Posted 2012-11-16 06:53:39 and read 2829 times.

Quoting SCL767 (Reply 47):
LAN Perú operates the route daily and code-shares on IB's 9 weekly flights on the route. However, IB will reduce frequency on the route to 7x weekly in January.

I know, that's why I say my friend would book the LAN flight instead of IB, if time schedules allow it. I am sure that some passengers who booked in IB (and thinking they are getting an Iberia service) must be pleasantly surprised flying a different carrier (and Latin American! - if you know what I mean -) with AVOD in economy or friendly air hostesses.

Quoting Dano1977 (Reply 50):

Iberia's unions are completely out of reality, I wouldn't believe one word of what they say.

I am not joking, but their main argument is that "the British" want to "destroy" the Spanish (Iberia) in order to get access to Madrid T4. And, we are not talking about the Spanish Armada in the XVI century but about airline industry in 2012.

Because they want to avoid how Iberia was a mess before BA jump into, how they are overpaid and work less than pilots at BA, LH or AF and how their reputation is abysmal (IB strikes have been running for years now, they are so typical in Spain as Christmas)... they appeal to nationalistic arguments. An institution that uses xenophobic arguments has no credibility for me. Fortunately IB's unions have close to 0 credibility in Spain, and they are mostly seen as a group of people trying to defend their privileges, who don't care about their customers, lower-ranked workers in the company (because the union mostly works for pilot's interests, not for ground staff) or what's going on in the global aeronautical industry. They still have the government workers, monopoly mentality and they think that a IB strike will paralyze the country... fortunately for Spanish customers (and unfortunately we have seen some of this lately), if Iberia disappears tomorrow.... there are many companies that will fill their gap.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: SCL767
Posted 2012-11-16 07:08:45 and read 2866 times.

Quoting SCQ83 (Reply 51):

Quoting SCL767 (Reply 47):
LAN Perú operates the route daily and code-shares on IB's 9 weekly flights on the route. However, IB will reduce frequency on the route to 7x weekly in January.

I know, that's why I say my friend would book the LAN flight instead of IB, if time schedules allow it. I am sure that some passengers who booked in IB (and thinking they are getting an Iberia service) must be pleasantly surprised flying a different carrier (and Latin American! - if you know what I mean -) with AVOD in economy or friendly air hostesses.

South American pax originating in Chile, Ecuador and Perú usually prefer to fly LAN to MAD. The SCL-MAD-FRA route will operate with the 787s next year as the A343s begin to leave the fleet. Also, LAN Perú could add additional frequencies on the LIM-MAD route in the near-term as the carrier receives new B-767-316ERs.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-18 14:18:28 and read 2822 times.

The restructuring now hits the regional subsidiary too:

Air Nostrum will cut wages by 25-50% in 2013 (but without any job losses), aiming to save 22million.
The 50-seat CRJ's will be substituted by the new CRK's and AT7's coming in (this was already in progress and is not really new).
What is new at least to me is that the CR9's will leave by 2016, with Air Nostrum becoming an all-AT7/CRK fleet.
Also, they are looking at opportunities to lease out the 50-seaters; 4 are already leased out to Cimber Air, Wideroe and Binter.

The aim is to return to profit in 2015.

http://www.elmundo.es/elmundo/2012/11/16/economia/1353082304.html

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: Stratofish
Posted 2012-11-18 14:47:40 and read 2813 times.

Quoting r2rho (Reply 53):
Also, they are looking at opportunities to lease out the 50-seaters; 4 are already leased out to Cimber Air, Wideroe and Binter

Please help me here. I thought Cimber as bankrupt and Binter would never operate jets??

I do not know what kind of contracts they have with Iberia, but I get the feeling they might do a tad better if they kind of introduce their own brand and operate as a sovereign niche carrier?

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: acelanzarote
Posted 2012-11-19 04:27:20 and read 2787 times.

Binter used to use Futura for some services so certainly nothing new. From what I have seen so far
the CRJ´s seem to operate some of the Gran Canaria-Africa routes.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: r2rho
Posted 2012-11-20 07:13:42 and read 2775 times.

An interesting analysis can be found here:

http://centreforaviation.com/analysi...-its-cuts-iberia-to-the-bone-87985

Quoting Dano1977 (Reply 50):
one accusation, that BA took all the cash out of Iberia, and plugged the BA pension with it.

as well as getting themselves some shiny new 77W's   

Quoting Dano1977 (Reply 50):
Iberia hasn't made a profit in the last 5 years.

Check again for net profits:

2005 +395
2006 +56.7
2007 +327
2008 +32
(continuous net profits since 1996 I believe)
2009 -273
2010 +89
2011 -61

However, it is true that IB's operating result has been negative since 2009 (see my link above)

Quoting SCQ83 (Reply 51):
their main argument is that "the British" want to "destroy" the Spanish (Iberia) in order to get access to Madrid T4.

Leaving nationalistic accusations aside, there are many completely rational reasons for BA (or anyone) to want to own a world-class hub facility such as MAD T4.   

While I agree that IB pilots are out of touch with reality, it the general impression that - even if were to be a simple coincidence - IB has gone down the drain ever since it was merged with BA. Given SEPLA's low credibility, it would probably suffice if IAG were to counter their accusations with more hard numbers, but they aren't, and that doesn't help management's credibility either.

I would like to see a true company transformation plan, rather than a pure cost-cutting and downsizing plan, as presented. As long as that doesn't happen, I will view IAG statements with more or less the same skepticism as union statements.

Quoting Stratofish (Reply 54):
they are looking at opportunities to lease out the 50-seaters; 4 are already leased out to Cimber Air, Wideroe and Binter

Please help me here. I thought Cimber as bankrupt and Binter would never operate jets??

I was confused too, I was just quoting the article. Airfleets seems to confirm it though (but you're right, no Cimber in there):

http://www.airfleets.net/flottecie/Air%20Nostrum-history-crj.htm

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: EI564
Posted 2012-11-21 07:32:19 and read 2635 times.

Quoting r2rho (Reply 56):
While I agree that IB pilots are out of touch with reality, it the general impression that - even if were to be a simple coincidence - IB has gone down the drain ever since it was merged with BA.

Given the economic environment in Spain over the last few years, I would have thought it has to be a coincedence. Spain had its own economic bubble before that.

Topic: RE: Iberia To Cut 4,500 Jobs Under IAG Restructuring
Username: LHRFlyer
Posted 2012-11-21 07:42:27 and read 2624 times.

Quoting r2rho (Reply 56):
I would like to see a true company transformation plan, rather than a pure cost-cutting and downsizing plan, as presented. As long as that doesn't happen, I will view IAG statements with more or less the same skepticism as union statements.

Well, take a look at the IAG investor presentations. If you look at those, it's clear they have far more planned for Iberia than just cutting costs. Aside from new aircraft and new products, there is a lot else planned to improve Iberia's revenue performance.

The "Willie Walsh just wants to destory Iberia" line is exactly what was said a few years ago about BA when it sold BA Connect, refused to buy GB Airways etc. And look at BA now.

Iberia's dire performance has nothing to do with BA/IAG. And Iberia is fortunate to have IAG management which has the benefit of restructuring and turning around BA.

[Edited 2012-11-21 07:44:46]


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