Kelual From Spain, joined Jul 2008, 117 posts, RR: 0 Posted (7 years 8 months 3 weeks 4 days 1 hour ago) and read 7162 times:
IB has confirmed one of the HIDDEN 7 options for A340-600.
As usual, IB doesn't publish orders or options cause it might interfire with the catastrophical vision that the company want to give to their employees in order to negotiate better labour agreements.
One new option has been executed for 2010, still open two for 2009, two for 2010 and two for 2011, or will these last six converted into A330 orders???
With this company, nobody know. Not even the CEO.
MIgAiR54 From Spain, joined Jun 2007, 2874 posts, RR: 1
Reply 2, posted (7 years 8 months 3 weeks 4 days ago) and read 7002 times:
Quoting Kelual (Thread starter): IB doesn't publish orders or options cause it might interfire with the catastrophical vision that the company want to give to their employees in order to negotiate better labour agreements.
Are these options new or the previously announced? I mean, more than one year ago, IB announced the arrival of 6 A346 for the 2008-2011 period. I guess that they just added one more aircraft (besides the second-handed A346 from Cathay and the A330s). From these options, three were confirmed some months ago and three more were waiting for confirmation at maturity.
Quoting MIgAiR54 (Reply 2): When are they going to recruit pilots, what are they waiting for??
Let's see. We first need to know by how much short-haul will be reduced. In principle, all the MDs had a substitute A319/320. Then they said that no way... that with the crisis the A320 would come, but that just for substitution of the oldest 320s in the fleet, and that the production of the MDs would be cut without substitution (in the short-run). Now it seems that IB also increased the number of A320s, so I wonder if IB will finally add the A320s for substitution purposes (of the MD) AND in order to increase the fleet too.
Quoting MIgAiR54 (Reply 2): When are they going to place an order for fleet renewal??
By the end of 2008 (december) or the first months of 2009 (january / february). They are waiting to see what AF does and also expecting a crash in the market. Now, already many carriers cancelled their orders and more negativity can come. Iberia knows when to visit Airbus in order to lower the price.
Quoting MIgAiR54 (Reply 2): why is everything so secret inside IB and even for their staff??
The market never understood IB. I' ve been "analyzing" them for a while, and they always have clear ideas of what to do, but they always hide their plans. See what they did with Clickair (apparently, IB was a minor shareholder, but as I always said, IB+Nefinsa had all the power), what they did with Vueling (apparently, Vueling is taking over Clickair, but it's the opposite), how they behaved with Airbus (they had ambicious expansion plans but, even with the waitlist, they never showed interest in a quick deal: they always played the "OK, I will wait" game), how they negotiated with SEPLA (IB is very short of pilots and has heavy growth constraints, but never showed desperation in order to keep firm the goals of IB), they presented themselves as the silly "junior partner" of BA (... but they forced BA to go ahead with the deal, and now I know that they are doing their best to force BA to accept an almost 50-50% structure of the capital of the holding), ...
Iberia is very clever and many analysts too stupid because they never understood the "judo economics" (making plans very discretely and acting as if you were dummy) game that IB plays.
Kelual From Spain, joined Jul 2008, 117 posts, RR: 0
Reply 4, posted (7 years 8 months 3 weeks 3 days 10 hours ago) and read 6427 times:
You are right Gatovolador they secretely announced the options a year ago , but they've been execute them, like the three that are suppose to arrive in the next few months, totally hidden (we knew abot these three A346 cause RR filtered the order).
Concerning the A320, IB finally won't reduce flights or fleet, some body else is doing it fro them Spanair, grounding 15 MDs leaving all the bases except MAD and BCN and leaving 9 Spanish airports.
The pilots... when Clickair started in October 2006 a very wise friend of mine whom I trust deeply said that in two years Clickair will be in MAD. Well with the Vueling=Clickair merger, this will come true. What I think is Vueling=Clickair will take over the domestic market as their first step, leaving only Puente Aereo, Cataluña America and some feeder flights to IB. This will leave many crews available for long haul, that-s why IB is not hiring pilots, or even cabin crew.
Just to clarify: have the firmed up the option to a order of one 340-600 which will be delivered in 2010 or have they confirmed that they have a hidden option on one? Sorry for the dumb question, but it is not clear to me .
WARNING! The post above should be taken with a grain of salt! Furthermore, it may be slightly biased towards A.
Kelual From Spain, joined Jul 2008, 117 posts, RR: 0
Reply 8, posted (7 years 8 months 3 weeks 3 days 6 hours ago) and read 5972 times:
By Domestic I meant intra Spain flights. Domestic flights are unprofitable that's why most of the companies are pulling out of the market so Vueling-Clickair it's the best chance for IB. Loads in C are extremely poor and fares in Y extremely low.
GatoVolador From Spain, joined Apr 2007, 439 posts, RR: 1
Reply 9, posted (7 years 8 months 3 weeks 3 days 1 hour ago) and read 4637 times:
Regarding the domestic flights, I agree that Iberia needs a change. Right now, they are operated under an outdated cost and operating structure, particularly with too long layovers (45 min) and employees who are linked to working conditions (and salaries) well above the market conditions. (Before some of you kill me, I have to say that I am a supporter of Iberia and its employees, and that I understand that being substituted by low-cost employees with no labor agreement is tough, but as persons participating in a market economy, all of us understand -- even if we'd like to have a different scenario -- that the management of a firm cannot justify the existance of such a gap in labor conditions between your company and your peers. When a Clickair F.A. gets only about 40% of the salary paid to an Iberia employee, when these low-cost employees are not the same but they can approximately replicate what the others do, and when these low-salaries employees are high enough to cover your necessities, it's very difficult to keep working under the labor agreement. Either the labor agreement is changed or either you try to skip it by creating firms as Clickair or outsourcing your production.)
Of course, if Iberia had the formula to hypnotise everybody, they would fire their workers and hire the ones of Clickair, who never protest (Did you heard them asking info about the merger process of Clickair and Vueling, preparing industrial actions against future fleet reductions, or asking a labor agreement? I didn't.), are better perceived by the passengers (not me, but in general everybody appreciates the smiles, youngness, and physical shape of their employees), and get a much lower salary for longer working days. I forgot that they will always come back to their base, whatever happened. And I'm not for these working conditions, but we have to accept that the employees of Iberia failed their attempt to "save" themselves: being perceived as better (and the preferred) by the passengers. If this was the case, Iberia would have to keep paying "high" salaries in order to satisfy the customers, but as long as this doesn't happens and that the law allows the hard working conditions of Clickair, why would Iberia could keep operating the flights on their own when they can use a low-cost (for them) alternative?
Having said this, it's important to highlight that this formula was not invented yet. Of course, you cannot just change the employees having the other variables (brand, product, operator...) constant because of the labor laws. Then the alternative would be to change Iberia by Clickair-Vueling, as they did in the non-Madrid point-to-point operations, mainly Barcelona.
OK, but again: is this possible? I believe that the substitution of Iberia by Clickair in Barcelona was a success because the product is in line with what short-haul point-to-point passengers demand (schedules, punctuality, prices, flexibility) and last but not least, by dismantling the European hub of BCN, they isolated BCN from the rest of the network. This was positive because it allows you to change the product were needed without interfering Iberia. I wonder up to which extend Iberia can replicate the strategy followed in BCN for MAD. I know that they'd like to do it, but I have my doubts about the possibility of doing this.
First of all, the arrival of Clickair to BCN didn't imply a staff reduction (other than retirements), as IB sent all the BCN-based aircrafts to MAD in order to reinforce the hub after the openning of the new terminal (instantaneous growth there was needed in order to fill the gaps generated by the new terminal and avoid the arrival of other competitors). However, if IB ever started to shrink domestically, where would they could allocate the workers? In long-haul, maybe? Maybe, but the number of employees affected would be too much. By asking the authorisation for an "ERE" (firing the employees because of the new market conditions)? It's possible, and it would imply lower payoffs for the employees than a regular end of a labor contract. But, let's discard this solution for the moment.
And this is by the employees side. But what about the passengers? The necessities of MAD are not the same than the ones of BCN because of the existance of the hub. And counting that IB carries a lot of connecting pax in its domestic flights (for instance, MAD-SVQ route, or MAD-AGP, which are two highly affected by the high speed train and that are resisting well due to the high impact of the connecting pax), how could Clickair-Vueling substitute IB? I know that it'd be possible, but actually far more difficult than it was in BCN.
- First of all, IB carries cargo (connecting to the Americas) and pets (flying in the cargo cabin and following their owners, sometimes connecting too). Clickair doesn't accept cargo nor pets. If cargo is part of the business, would IB loose part of the cargo going to long-haul flights just because of Clickair? Maybe Clickair could start accepting cargo on behalf of Iberia... but again this is more costs for Clickair: more fuel (and they buy fuel in the open market, not as Iberia, that hedges it through futures and call options) and also the need of longer layover. Is Clickair-Vueling OK with this? Maybe, but I don't see them resigning their 30 min layover rule, which is strictly followed. (It's surprising to see how punctual they are even in busy and complicated airports such as BCN, even at the end of the day when they could suffer the effects of the addition of small delays during the day.)
- Secondly, IB has business class passengers. OK, it's true that they are not tons of them in the domestic sectors because MAD-Spain is generally 60 min (90 at most), Canaries aside. But hey... a business class pax is a business class pax. IB doesn't have special seats for them, so basically having a business class there doesn't add too much costs, because all the extra costs are charged in the ticket. However, I wonder what would happen if the domestic leg is "tourist class only", and if the brand is not Iberia but Clickair or Vueling. Would a business class pax accept it? Remember that most of the business class pax flying intra-Spain flights are business plus pax. If you downgrade (to zero) the business class, you are doing the same to business plus. And when business plus is what makes your airline run, I'm not sure if eliminating the business class is too wise. In BCN, business class pax (others than connecting ones) were close to zero, and therefore eliminating the business class was easy, but in MAD you still have more point to point business class pax than in the rest of Spain (large corporations, government...) and also business class pax originating from Business Plus. If you cancel your domestic business class, you loose your valuable customers because all of them would go to Star Alliance or Sky Team to receive a proper service. A solution could be the implementation of a "light" business class cabin on Clickair-Vueling flight, which would be possible but anyway... too risky for your business.
- Thirdly, in BCN you can lower the quality of the schedules, but in MAD it's more difficult because of the hub. MAD attracts a group of pax, both tourist class and business, that need a very specific schedule. They want to arrive MAD in the early morning (that's why IB overnights nationwide and in Europe), others need to arrive to the hub between 150 and 60 min prior to their long-haul flight (and IB has more than one bank, so flights ensuring connections are needed constantly), and they the way back. Clickair cannot do that because their "no crews outside the base" policy would make the schedules impossible. Some point-to-point pax cannot wait the aicraft to come from MAD in the early morning to depart: they need it already at 6:30 or 7 in their local airport. Unless Clickair had bases "everywhere", it would be too dificult to make the schedules work.
- IB needs a flexibility that Clickair doesn't have. Different size of aircrafts (Clickair only has one type of aircraft), capacity to wait for misconnected pax (Clickair needs to take off again in 30 min to be profitable), time to board PMR pax going to LATAM (more quantity than on Clickair flights), etc. The schedules of Clickair are focused on aircraft availability (the flight to Berlin is set when there is a gap) whereas Iberia focuses on the needs of the hub (sometimes the aircraft "looses" time just to arrive MAD at X o'clock and minimize the connection).
- ... and many others: lounge access, oneworld (Clickair is not part of OW), Iberia Plus, product and brand image, baggage policy, etc. etc.
My conclusion is that Clickair-Vueling is a airline whose model works for the point-to-point pax flying short routes, but not for a hub. There, they would need to adapt the product and their way to operate, and this is cost. If IB wanted to stop all (or almost all) their domestic flights, they'd better transform their flights into Air Nostrum ones (with as low salaries and as short layovers) but with a product and even a brand perfectly integrated with the one of Iberia. Someone flying Air Nostrum feels it like flying Iberia because of the ground personnel, the code of the flight and the channels of sale, the (hybrid) livery, the participation of Air Nostrum in OW and Iberia Plus, the coordination of Air Nostrum's schedules with the ones of IB, etc. Air Nostrum could take some aircrafts of the A320 family (or even Bombardier C-Series with 140 seats) and it would match much more the desire of lowering the salaries without changing the product.
We will still have to see the plans of Iberia, but the future of Clickair-Vueling in MAD is not clear at all. First of all, the network of Vueling out of MAD is rather limited to very dense routes where both carriers can exist as the same time (as today). Secondly, Vueling is reducing heavily its fleet (Clickair a bit), and BCN will still need at least 30 A320s based there. Moreover, the opening of the Terminal D will imply that Clickair-Vueling will have to protect their home airport from a new base of EasyJet. A Spanair focused in BCN is also a danger for them. (And what would happen if SAS closed Spanair? Clickair-Vueling would need to work hard there and not in MAD). Third, Iberia blocked the entrance of Clickair in MAD, and now they achieved to nominate Alex Cruz as the CEO (the one who takes the decisions) of the new Vueling. Will IB ask Alex Cruz not to expand in MAD, just stay as they are? Fourth, SEPLA ageed with IB to set the boundaries of Iberia - Air Nostrum - Gestair - Clickair/Vueling and Spanair when IB was trying to buy Spanair. I know that IB offered SEPLA to keep the core of the domestic network (out of MAD), and that SEPLA agreed. Now SEPLA decided not to sign (or delay) the agreement because of the new scenario with BA, but the signature was scheduled to happen some days after the announcement. I wonder if SEPLA will achieve (please, please) a new agreement with a complete chapter on the boundaries of IB, as the FAs did with Gestair. This is a priority.
I know that the temptation of cost-reduction is high, but the optimal solution would be if Vueling had a low presence out of MAD, in routes where both carriers can exist but gathering pax with different needs. At the end, if it's managed well, IB can keep its domestic network alive with connecting pax and business class, and also point-to-poit tourist class pax not willing to take Vueling. At its turn, Vueling could gather pax that never try Iberia (students, etc.) or pax whose trade-off is "LCC vs AVE", and not "Iberia vs Vueling". (See how good Vueling is doing in the BCN-MAD route, fighting against the AVE rather than against IB.)
A transformation of IB into Vueling could happen, but I consider more logical to have a LCC branch focused on BCN and fighting in MAD against Spanair, EasyJet, Ryanair, and the AVE rather than against IB. IB and Vueling should play in different leagues.
Plairbus From Germany, joined Feb 2008, 311 posts, RR: 0
Reply 10, posted (7 years 8 months 3 weeks 2 days 6 hours ago) and read 4166 times:
IBERIA is doing very well, and pilots of IBERIA are the ones the get the highest pay-check!!!
Pilots working for Iberia fly good and modern planes they make between 25 and 40 % more money than for example LUFTHANSA pilots and they have great routes to fly! IBERIA is just clever!
JJ8080 From Brazil, joined Aug 2008, 932 posts, RR: 0
Reply 12, posted (7 years 8 months 3 weeks 1 day 17 hours ago) and read 3882 times:
I'm not a spanish aviation specialist but IMO, IB would do a great job with A332s..... There are several routes there would be better suited with a A332, were a A343 is just to big and waste to much fuel.
Kelual From Spain, joined Jul 2008, 117 posts, RR: 0
Reply 13, posted (7 years 8 months 3 weeks 23 hours ago) and read 3576 times:
Gatovolador I don't know your sources, but I can guess they come directly form the IB management. My best friend works as a FA in IB, he gets as basic 650 euros a moth plus his travel expenses, these are higher than in clickair as he works 18 days a month and spend 12-13 nights out of his base. If he is sick he gets 650 euros only. He just arrived to his house after this rotation BRU-MAD MAD-IBZ IBZ-MAD MAD-BIO BIO-MAD pick up time 06.30 am arriving time 19.10 pm. can you tell me which carrier do the same for that money?
Hola. My source is a relative: my sister works in a bank and one of her clients (before she was sent to a department were she only deals with firms) was an Iberia FA of the B757 fleet. (Not Audeli) He was from outside Spain (former employee of a European LCC now merged with a non-LCC airline) and went to Spain when he was hired by Iberia. He used to fly from BCN to all the dense destinations flown by the B757 (Málaga, etc. etc.) at that time. He told my sister that he was happy working at Iberia (even if he complained about his temporary --but continous-- contracts), and as he contracted a mortgage with this bank, he showed a pay-check of about more than 3 times the 650€ you are talking about (including extra pays for all the nights he was outside BCN).
Then, Clickair was created and this temporary worker was fired (or non renewed) because of a cut in the capacity of the airline. He needed cash, so he went to Clickair and he was hired since the first day of operations. His salary went to a bit more than 700€/month, and he told my sister how bad Clickair was in terms of working conditions, not only the salary but also the constant delays (now Clickair is very punctual, but they started with only 2 A320s based in BCN and the airline had strong delays) and very long schedules of work. He commented that his job at Clickair had nothing to do with the one at Iberia, and he said that either he came back to Iberia, or he'd better return to his home country.
Finally, like 9 months before he was hired back (in a permanent position, after more than 2 years of temporary contracts and the Clickair experience) by Iberia and he was very satisfied. Now he works in the A320 fleet, he finally bought the appartment, and as he now has a permanent position, he plans to stay "forever" with Iberia and he has no intention to apply for a different position in any other airline. (Happy end!)
I know that crews (pilots aside) have not the best salaries in the world, and I'm sure that the perspectives are negative because in each labor agreement you have to cut your rights, but you have to admit that a Clickair employee has a wayyyy lower salary that the one that an Iberia employee gets. The personnel of Clickair gets close to "nothing". I know that junior employees at Iberia have lower salaries too (that's why senior FAs cost that much), but even like this, the personnel of Clickair is cheap compared to the one of Iberia. Moreover, they never protest and the passengers perceives them better. And again, if I had to choose, I'd chose Iberia (and its employees) over Clickair, but I'm sure that I am the minority. Iberia knows that, and the temptation of exchanging one employee by an another one is huge.
I'm not for the low-salaries model, and I understand the worries of the employees and the unions (as I'd worry if my company wanted to do the same with me), but I also understand the point of view of the management. Managers have one goal: value maximisation of the firm (an elegant way to say "more profits, please"). When your cost structure is that uncertain as in the case of the airline industry, and when in many years your profits are in danger, how would you justify (if you were a manager) your personnel expenses considering that in the market you can find an employee working for "nothing"? Of course, you'd ask that you cannot change this because of the labor agreements inherited from the past, that you want happy-motivated and skilled employees, blah... blah... blah..., but do you think that shareholders (and clients) are affected by these reasons? I know that it's not fair, but they would tell you to invent something to skip these high costs. And now we have Clickair, but I know that in the past the initial plans of former CEO Ángel Mullor were to create a different moral person (call it Clickair or whatever) but that would be authorised by Iberia to operate under its brand and offering its service (like Gestair but in all the short-haul network). (Other possible solutions were the creation of bases in LATAM, where airlines focused on quality as LAN pay their FAs a really low salary.)
The managers saw that this idea of "la segunda marca jurídica" (with the same commercial brand and product) was too much and they opter for a "diet" plan: creation of Clickair with its own brand, a different product, and network). For a manager, having the opportunity to skip the labor agreement would be his better dream, and more now that many airlines are posting losses and others are shutting down. And be sure that if they cannot get low costs, they will do whatever to achieve it. This happens everywhere. One of my best friends is economist and when she graduated, she wanted to live one year abroad. She was hired in Brno (Cz. Republic) by an insurance company who made her work from there for the Spanish office, but being paid as low as $300. She could have been hired in Spain, but in Brno the company could pay her only 300$ instead of the Spanish salary. I also know other cases: some very big lawyers offices outsource the search of jurisprudence to some guys located in.... ¡India! Ohhhh, god! Imagine a guy from India readding (fairly complex cases even for a Spanish speaking person) resolutions of our Supreme Court. It sounds crazy... What I want to say is that, even if highly-qualified tasks are outsourced to cheap countries, what cannot be done in a cheap way in other industries?
That's why I pointed out that now the priority for the unions (both pilots and FAs) should be to sign a agreement with a clear definition of the boundaries of Iberia, as SEPLA and Iberia agreed to do with Spanair, before the SAS's decision of not to sell the company. If IB promised not to use Vueling in a given number of routes (for example, protecting the hub of MAD), this would be the optimal solution for the employees, as they could preserve their production.