spantax
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Is There A Future For Iberia?

Mon Feb 18, 2013 10:49 am

Well, the strike is on and running. Now I would like to ask your opinions about the "official" cause of the strike, the lay off of 3,800 employees due to the acquisition of IB by the British to form IAG, that is: the union of IB with British Airways. In Spain, the most recurrent explanation goes like this, in scam mode: "IB was profitable, healthy, with a good position in Spain and was leader to/from Latin America. The British buccaneers arrived and helped by a gang of unscrupulous managers bought IB by a derisory price just to dismantle it, transfer the most profitable routes to BA, fill the deficit of the pension fund of BA employees and use for free a brand new terminal (T-4) at Madrid, good location for future expansion to America and Africa".

Well, as a normal passenger, not a professional, I don't believe this version. I have always seen (and suffered) the terrible incompetence of IB, their disregard for the client, this fundamental Spanish trait of a lot of hot air for nothing. For me IB is a kind of heritage from Franco (as the king of Spain, by the way), thus, a State controlled entity, with all the build-in corruption that this meant with Franco and that has continued to this very day, and consequently an unsound structure prone to failure and neither well prepared to cope with hard times nor with the new aviation environment in Europe (deregulation, low cost...). But, on the other side, I had the feeling, when it happened, that the sale/merger to/with BA was too complicate, unnecessary, nonsense. As experience has proved, in business bigger is not always better.

I know this has been discussed, but now, with the strike going on, the reduction of flights, Iberia Express, the entry into service of more high speed train lines in Spain at competitive prices, the fleet -A330- (plus Ryanair, the role of Vueling, the hyperinflation of airports in Spain...) it could be a good moment to come again to the matter.

Regards,
A300.10.19.20.21.30.40,AN26,ATR42,AVR146,B717.27.37.47.57.77,B1900,C130,C212,CH47,CRJ200.700,DC9,DHC4,ERJ135.190,F27
 
aircatalonia
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 12:41 pm

The connections to Latin America are profitable and that's about it. I see IB as a small company with a few long range aircrafts based in Madrid (similar to what Virgin Atlantic is in the UK) and strong ties with one or more european LCC's (ie. Vueling).
 
jumpjet
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 1:03 pm

I've never been able to understand just why, when a company isn't doing particularly well, the workforce decides to down tools and go on strike. It just seems to make matters worse.

I've only one experience of Iberia, and that was a trip with a short transit stop in Madrid. Guess what? In over 30 years of flying, it was the only time my bag disappeared, never to be seen again!
 
skipness1E
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 1:04 pm

Quoting spantax (Thread starter):
employees due to the acquisition of IB by the British to form IAG,

Iberia was not acquired by the British at all, indeed the Spanish got a very good deal when they took on a bust pension fund with an airline attached. IAG is the holding company that owns both BA and IB, and IAG is not based at Heathrow is it?
 
jfk777
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 1:27 pm

Iberia should decalred bankrupt and rebuilt like so many airlines world wide. From Avianca to American Airlines.
 
PDPsol
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 2:24 pm

Quoting skipness1E (Reply 3):
Iberia was not acquired by the British at all, indeed the Spanish got a very good deal when they took on a bust pension fund with an airline attached. IAG is the holding company that owns both BA and IB, and IAG is not based at Heathrow is it?

Semantics here... Yes, of course, the transaction was a stock-for-stock merger and, of course, the IB shareholders were converted into large, material and important shareholders of IAG, for sure. However, in the past 3 years, much, much, much has changed, including the composition of IAG's shareholders.

The single largest shareholder of IAG remains Bankia [the old Caja de Madrid, an institution that seen more drama than a Venezuelan soap opera 'telenovela' over the past 24 months]. Bankia's controlling shareholder, Banco Financiero y de Ahorro, S.A., owns over 12% of IAG. The remaining 'large' IAG shareholders are typical asset management institutions, with 3-5% ownership, including Schroders Investment Management, Black Rock, Templeton, etc. etc. However, over the past 24 month, BFA has, indeed, sold down much of its interest in IAG to raise capital, for obvious reasons. Therefore, it would be difficult to argue the corporate governance of IAG is influenced in any way by "Spanish interests" or, for that matter, "British interests" or any other "national interests". IAG is clearly focused on the only objective it should be focused on: maximizing the wealth of its owners, its shareholders, by executing a viable commercial strategy. Nothing more.

Quoting spantax (Thread starter):
IB is a kind of heritage from Franco (as the king of Spain, by the way), thus, a State controlled entity, with all the build-in corruption that this meant with Franco and that has continued to this very day, and consequently an unsound structure prone to failure and neither well prepared to cope with hard times nor with the new aviation environment in Europe (deregulation, low cost...).

OK, seriously? You do realize, of course, that Franco has been dead for almost 4 decades, do you not? IB was, indeed, controlled by the State ages ago, but it was privatized, remember? IB was private, with private owners, private capital. These owners, including BFA by the way, were certainly more interested in maximizing the value of their investment, than worrying about "heritage from Franco" or any other silly notion. Owners are interested in their money, not politics.

Do labor unions at IB believe they have influence over the carrier's corporate governance? Of course they do. Do they actually have any influence? Not really. Are these labor unions vestiges of an old, defunct, industrial and social 'compact' that has existed throughout western Europe and is now being dismantled in favor of a new, more flexible economic, political and social model? Surely. However, this 'old model' has less to do with Franco and more to do with measures that all societies in western Europe bought into decades ago...

If IB can truly restructure its operations and focus its future on a sustainable, commercially viable strategy, then wonderful. Hopefully, they will be able to. I would imagine this strategy would be centered around long-haul to key markets, GRU, GIG, EZE, MEX, BOG, LIM, SCL, etc., along with European connectivity via VY and/or Express. We shall see.
 
Summa767
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 2:58 pm

Iberia has a future, but it needs to adjust to a more competitive climate, and realise that the economic boom that Spain enjoyed for more than a decade is well and truly over. Hence Iberia has not made a profit from flying since 2007. It has made money on third party maintenance, handling, sales of shares in Amadeus and profit from Vueling, but not from its core business. 2009 (pre-merger) was particularly bad.

What is being done in regards to a better product in the new A330s, and retroffitting of A346s is part of the answer in making Iberia viable in the medium and long term. Customer service has got to improve too, and of course it needs to be more productive -and that is where the restructuring comes in and the strikes are the result of that.

Unfortunately many Iberia employees, and certainly its pilot union that don't seem to have a grasp of reality, don't seem to realise the state of the Spanish economy and the effect that has on demand, nor about the increasing competition, particularly in the Latin American market that has been Iberia's forte. As far as the are concerned, the British are ransacking Iberia. Xenophobia is clearly a basic instinct.

Just have a look at this picture from today:
https://twitter.com/SaveIberia/status/303505247245041664

British people should be aware of these attitudes next time they think of a trip to Spain.





[Edited 2013-02-18 07:02:51]
 
miaintl
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 3:06 pm

Whatever the situation is IB is certainly in a better situation than AZ. At least IB has a strong connecting hub at MAD, something which AZ does not have.
 
SCQ83
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 3:14 pm

I think there is.

First, Iberia is getting rid of competition. Spanair got bankrupt last year, Orbest this week and I wouldn't be surprised that Air Europa sooner than later goes under as well (the way it is managed). Iberia is the only one backed by a major (partly) foreign group (IAG) and it is by far the best known brand, best network and corporate contracts in Spain and LATAM among those carriers. So very soon Iberia might be well in an almost monopolistic position in the Spain-LATAM markets (of course with the Latin American and European competition, but none at home).

Secondly, Spain is getting new working regulations by the day that makes much easier (and cheaper) to fire employees that have been in the company for decades. That is the issue with Iberia... most of those pilots, TCPs and land employees feel like they are "government" workers (like in most of Western Europe, btw) so the fate of the company is not their matter. Another issue is the corporate management of IB in Spain (otherwise it is also very easy to blame only the bottom-of-the-rank employees)... lots of unnecessary "managers" to get as much as money as they can before the company collapses... hopefully IAG will also control that.
 
bennett123
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 3:39 pm

http://www.airfleets.net/flottecie/Iberia.htm

Looking just at their fleet, I notice the following;

1. That a lot of A300, B747 Classics and DC10 sat around for years after they were retired. These may have had some value on retirement. But by the time they were disposed of, (iirc, the A300 are still sitting in Valencia) they were just junk.

IMO, that it not good use of planes that cost many £M.

2. That their long haul fleet are almost solely A340. Nothing instantly wrong there, but 1 A330, plus 1 A330 on order suggests that they have no plans for replacement any time soon.

As the number of newer twin jet A330, B767, B777 and increasingly A350 and B787 come on line, this vital sector looks increasingly dated.
 
acelanzarote
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 3:39 pm

Depending how this ends and I suspect we all know who the winner will be, I can see the Spanish media blaming the problems and job loses on BA/the UK in general.....So I hope IAG (and even BA in some ways) are battened down for a rough ride.
from the Island with sun and great photo's.. Why not visit Lanzarote
 
PDPsol
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 4:01 pm

Quoting acelanzarote (Reply 10):
I can see the Spanish media blaming the problems and job loses on BA/the UK in general
Quoting summa767 (Reply 6):
the British are ransacking Iberia. Xenophobia is clearly a basic instinct.
Quoting summa767 (Reply 6):
British people should be aware of these attitudes next time they think of a trip to Spain.

All this silly talk of xenophobia, Franco's legacy, blaming the British, etc. is ridiculous. The issue at hand is very simple, and has been seen in countless labor disputes throughout western Europe over the past decades: a once-protected industry is now changing quickly, with new competitors, new investors and owners, requiring massive restructuring and thousands of laid-off employees. No real difference between this and the British coal and steel industry in the 1980's, or the French auto industry today, or any other European industry that has experienced tremendous change.

IB does have a future and its corporate governance [see my post #5 explaining this] is focused on developing and implementing a sustainable commercial strategy. When all parties understand that this is the sole area of discussion, perhaps everyone will cool off and deal with reality. Until then, the drama continues.

The reality is that thousands of IB employees will lose their jobs and the remaining employees will work for lower compensation packages, with greater job uncertainty, more hours, and less benefits. The unemployed employees will face very difficult times, indeed, and they are worried and even desperate. However, all this talk of the 'bucaneering British' is just that, just talk.
 
shuttle9juliet
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 4:06 pm

Quoting skipness1E (Reply 3):

They do have offices on Newall road which is on the perimeter road, this is where you will find Mr Walsh.
 
Summa767
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 4:32 pm

Quoting acelanzarote (Reply 10):
Depending how this ends and I suspect we all know who the winner will be, I can see the Spanish media blaming the problems and job loses on BA/the UK in general

Yes, much of the Spanish media has no rigour.
If the strikes get in the way of restructuring, and Iberia is ultimately unable to be viable, then losers will be both IAG, Spain and every employee as simply the cash will run out at some point.
If the restructuring goes well, the winner will be IAG shareholders who would eventually get a return for their investment, the majority of employees that remain in their jobs and future employees once the company is able to grow sustainably.

Quoting acelanzarote (Reply 10):
So I hope IAG (and even BA in some ways) are battened down for a rough ride.

IAG has already seen its value fall due to the bad performance at Iberia.
BA has already restructured and is already making money and is on its way to be even more profitable. It would be better for IAG if all its airlines made money, but BA won't be affected if IB does not sort itself out.
 
r2rho
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 4:36 pm

There can be plenty of future for IB, and potentially very bright, but they need to get their act together. That goes not only to the striking employees (who have good reason to strike, but not on such a scale) as well as management who is equally to blame for their lack of action and strategic planning among others.

Quoting jfk777 (Reply 4):
Iberia should decalred bankrupt and rebuilt like so many airlines world wide. From Avianca to American Airlines.

However, there is no Chapter 11 equivalent in Europe (which is probably just what IB would need to restructure). Other major restructurings (Sabena, Swiss) have happened by letting the old airline die and refounding it through a new company that took over the remains (while taxpayers took over the debt...). IB does not need to go that far if they get their act together soon enough, but it would be the ultimate step (and the company to restart IB, IB Express, already exists).

Quoting jumpjet (Reply 2):
In over 30 years of flying, it was the only time my bag disappeared,

You haven't been to CDG then  
Quoting aircatalonia (Reply 1):
The connections to Latin America are profitable and that's about it. I see IB as a small company with a few long range aircrafts based in Madrid (similar to what Virgin Atlantic is in the UK) and strong ties with one or more european LCC's (ie. Vueling).

IB would not be sustainable as such a small company IMO. It needs to achieve and maintain a KL-like size over the long-term.

Quoting SCQ83 (Reply 8):
So very soon Iberia might be well in an almost monopolistic position in the Spain-LATAM markets (of course with the Latin American and European competition, but none at home).

The problem is not home competition - indeed JK is dead and UX is not a big threat. The problem lies in LatAm competition - and in particular its future growth potential.

Quoting bennett123 (Reply 9):
2. That their long haul fleet are almost solely A340. Nothing instantly wrong there, but 1 A330, plus 1 A330 on order suggests that they have no plans for replacement any time soon.

They have 8 A330 orders plus 8 options, which will hopefully be exercised, and provide a one-to-one replacement for their A343's. Their A346's are quite recent and their payload-range capacity is well used.
But I agree that IB lacks a strategic long-term fleet plan, which is one of the reasons why some see no future in the airline. The A333's are just a stopgap measure to improve the status quo with the A343's but with no fleet or route growth whatsoever. There are no new-gen aircraft on order, and they will be facing a growing number of LAN-TAM and AV-TA 787's. IAG needs to decide a fleet strategy for IB fast - and place orders accordingly.

Quoting SCQ83 (Reply 8):
lots of unnecessary "managers" to get as much as money as they can before the company collapses... hopefully IAG will also control that.

I agree - a purge has to happen at management level as well, it would be unfair to put all the burden on employees.
 
BA0197
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 8:31 pm

I think not. In all honesty.

Of course there is future for Spanish air travel, but I do envision that IB will not be around much longer due to the ignorance and stupidity of the staff blaming BA for their trouble (I just can't get my mind around how they came to that conclusion- have they not seen their economy of the Spanish unemployment figures?)

There needs to be a state-of-mind change within IB for it to improve. I feel its stubbornness to change will result in its ultimate termination.
 
UALWN
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 9:27 pm

Quoting jfk777 (Reply 4):
Iberia should decalred bankrupt and rebuilt like so many airlines world wide. From Avianca to American Airlines.

There's nothing equivalent to Chapter 11 in Spain: it would go straight to chapter 7 liquidation.

Quoting summa767 (Reply 6):
British people should be aware of these attitudes next time they think of a trip to Spain.

Oh please. Attitudes by how many IB employees out of how many Spanish citizens?

Quoting SCQ83 (Reply 8):
I wouldn't be surprised that Air Europa sooner than later goes under as well

I would be very surprised. Air Europa is part of the Globalia conglomerate (Viajes Halcón, etc.), which has been profitable every year since at least 2007.

Quoting bennett123 (Reply 9):
1 A330, plus 1 A330 on order suggests that they have no plans for replacement any time soon.

IB has 8 A330s on order + 8 options.

Quoting summa767 (Reply 13):
Yes, much of the Spanish media has no rigour.

Unlike the British media (Sun, Daily Mail, etc.)? There's actually no newspaper in Spain that can be compared to any of those rags.

Quoting BA0197 (Reply 15):
I just can't get my mind around how they came to that conclusion- have they not seen their economy of the Spanish unemployment figures?

The state of the Spanish economy and the unemployment do not seem to affect UX or VY, which keep posting profits...
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LHRFlyer
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 11:15 pm

Yes, there is.

A lot of the focus on Iberia has been on redundancies and cost-cutting, but there's also a huge amount of expertise in IAG to turn Iberia around.

Iberia is almost where BA was in 2002 when it launched "Future Size and Shape". A lot of the things Iberia is doing are similar to Future Size and Shape. IAG has a lot more planned for Iberia than cutting jobs and there is a lot else going on behind the scenes in terms of improving revenue management, increasing direct distribution etc.
 
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pu
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 11:32 pm

Quoting spantax (Thread starter):
Well, as a normal passenger, not a professional, I don't believe this version. I have always seen (and suffered) the terrible incompetence of IB, their disregard for the client, this fundamental Spanish trait of a lot of hot air for nothing. For me IB is a kind of heritage from Franco (as the king of Spain, by the way), thus, a State controlled entity, with all the build-in corruption that this meant with Franco and that has continued to this very day,

You tread heavily but you speak the truth.

There is a lot of Spanish pride in themselves/Spain/their job that prevents them from realising their desperate and unimpressive situation. By way of contrast, the British are self-critical and argue for their shortcomings. - to a fault.

Quoting PDPsol (Reply 5):
OK, seriously?

Yes, of course seriously.

Despite the pan-European cheerleeding we sometimes see, there is a big difference in cultures, service and the way each country handles adversity. Spain and IB are acting like they have permanently arrived at respectability when in fact they are teetering on dismissal.




Pu
 
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RE: Is There A Future For Iberia?

Mon Feb 18, 2013 11:56 pm

Quoting UALWN (Reply 16):
The state of the Spanish economy and the unemployment do not seem to affect UX or VY, which keep posting profits...

I think he was saying it more in the sense that IB employees shouldn't complain about their job, but rather they should feel lucky that they even have a job considering the Spanish unemployment situation.
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lightsaber
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 1:46 am

IB needs to be reformed with more connections to the East from that wonderful South American feed.

Quoting aircatalonia (Reply 1):
I see IB as a small company with a few long range aircrafts based in Madrid (similar to what Virgin Atlantic is in the UK)

VS works due to the limited slots at LHR. MAD will not have such an issue. IB also has to deal with hub bypass as longer range aircraft come out.

Quoting miaintl (Reply 7):
Whatever the situation is IB is certainly in a better situation than AZ.

   That's finding a pony in the pile!  
Quoting LHRFlyer (Reply 17):
IAG has a lot more planned for Iberia than cutting jobs and there is a lot else going on behind the scenes in terms of improving revenue management, increasing direct distribution etc.

That should be realized as if the Spanish want to throw of IAG, that just means the last lifeline is cut.


Lightsaber
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autothrust
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 1:47 am

Quoting spantax (Thread starter):
I have always seen (and suffered) the terrible incompetence of IB, their disregard for the client, this fundamental Spanish trait of a lot of hot air for nothing. For me IB is a kind of heritage from Franco

I strongly disagree. I can tell you in the Franco times and later the ppl were much more very friendly, professional and always with the wish to serve the customers then today.

There has been a change where rather younger generations don't have such attitudes and respect for paying clients.

Quoting Pu (Reply 18):
There is a lot of Spanish pride in themselves/Spain/their job that prevents them from realising their desperate and unimpressive situation. By way of contrast, the British are self-critical and argue for

This is a gross overgeneralization, there are also ppl in Spain very self-critical, humble, helpful. It's not as black and white as you want to point it out.

Quoting jfk777 (Reply 4):
Iberia should decalred bankrupt

That would be a real shame. One of the oldest airlines in the World.
“Faliure is not an option.”
 
robbb
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 9:08 am

Quoting jumpjet (Reply 2):
I've never been able to understand just why, when a company isn't doing particularly well, the workforce decides to down tools and go on strike.

It happens when employees feel cornered and threatened by their management and have no other choice but to fight back by the only method they have. No-one outside any company and it's staff involved in a dispute truly knows what is going on within. Taking strike action is a HUGE step for most ordinary people and one taken by people who consider their situation to be desperate, so personally I always support employees who find themselves in this situation. Even if on the face of it I don't agree with the reasons for a strike I can never be sure of the background as presented by the employer and media.

As for Iberia specifically, yes things need to change, but I would be doubtful of to what extent. In the case of Mr Walsh, I'm afraid I don't believe a word he says. He's a ruthless little man driven purely by corporate greed, I don't believe his "fight for survival" existed at BA, nor do I believe it exists at IB.

The part I don't understand is the anti-British sentiment, after all, as has been mentioned neither BA nor the British bought IB, and I can't see any specific impact that BA and IB have had on each other besides a little rearranging of schedules on LON, MAD and BCN routes. I think this may actually be aimed at Walsh himself, who ironically isn't British.

On final thing:

Quoting jfk777 (Reply 4):
Iberia should decalred bankrupt and rebuilt like so many airlines world wide. From Avianca to American Airlines.

European law doesn't provide for bankruptcy, reorganisation, re-emergence as it does in the Americas. The airline would either have to be bought or closed down and replaced with another.

[Edited 2013-02-19 01:14:54]
 
jumpjet
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 9:48 am

Quoting robbb (Reply 22):

It happens when employees feel cornered and threatened by their management and have no other choice but to fight back by the only method they have. No-one outside any company and it's staff involved in a dispute truly knows what is going on within. Taking strike action is a HUGE step for most ordinary people and one taken by people who consider their situation to be desperate, so personally I always support employees who find themselves in this situation. Even if on the face of it I don't agree with the reasons for a strike I can never be sure of the background as presented by the employer and media.

Whilst I certainly understand your comments robbb, I'm not sure I can agree with them. If things were really that bad and the workforce felt cornered, I just can't see how striking improves the situation. I'd imagine that many large, perhaps antiquated, organisations have to slim down and adopt modern technology and working practices if they're to maintain profitability and compete in their market place. It's fatal for companies to stand still and I suspect this has been the problem with Iberia.. This modernisation naturally means slimming down the workforce and whilst many organisations try to address this through natural wastage (dreadful phrase - sorry) and without having compulsory redundancies, in many cases this simply can't be avoided.

It's very easy for me to spout on here as I've never been in this situation so forgive me, but I think I'd probably be trying to work harder and longer to make sure that my name wasn't on the list for the chop.

I stand by my earlier comment in that I wholly fail to see what use striking can do other than to show how upset, and how totally intransigent, the workforce at Iberia are.
 
shuttle9juliet
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 10:16 am

Quoting jumpjet (Reply 23):

I think what Robb says does have value, as WW has earned the nickname "slasher" for a reason.
I do not ( my opinion ) think BA were in the position he said they were when he took over 2005,
He is a little corporate raider, and I really think the staff at IB ( with or without) the state of the Spanish economy will go down with the sinking ship rather than adhere to his job cuts, changing work ethics ect.

It is sad, but possibly true.
 
spantax
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 12:22 pm

Thank you to all for your comments so far. I see clearly that the picture is not black-white, but open to a lot of shades and nuances. Yesterday there were clashes at T-4 (Madrid) between Iberia employees and the police. I hope the situation does not degenerates any more.

And coming back to the core: some here see the future for IB in Latin America or as a kind of "branch" of BA dedicated to Latin America. But IIRC in 2012 only 20% of the traffic Latin America-Europa was done by Latin American airlines. With the increased number of passengers in the region and moves as LAN-TAM, this figure should growth markedly in the coming years, thus leaving less room for IB and other European airlines. The solution of improved fleet (A330) could work in the near months, but it is a real long term solution? Not sure about it. Also, the ultra-long haul 777-787-380-350 allow (as somebody said before) to bypass the traditional hubs (Madrid in the case of LA).
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UALWN
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 1:14 pm

Quoting spantax (Reply 25):
With the increased number of passengers in the region and moves as LAN-TAM, this figure should growth markedly in the coming years, thus leaving less room for IB and other European airlines.

I don't follow your logic: the increased number of passengers in the region should leave more room for IB and others, not less.
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spantax
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 1:54 pm

Quoting UALWN (Reply 26):
I don't follow your logic: the increased number of passengers in the region should leave more room for IB and others, not less.

Sorry, maybe it was my fault. I mean, more passengers in LA (many of them domestic or intra-LA -don't forget Mercosur and other attempts to integration in the region-) = stronger LA airlines = they can compete with European ones and break this imbalance 80% / 20%.

Regards,
A300.10.19.20.21.30.40,AN26,ATR42,AVR146,B717.27.37.47.57.77,B1900,C130,C212,CH47,CRJ200.700,DC9,DHC4,ERJ135.190,F27
 
PDPsol
Posts: 1109
Joined: Fri Feb 20, 2004 5:09 am

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 2:15 pm

Quoting Pu (Reply 18):
Despite the pan-European cheerleeding we sometimes see, there is a big difference in cultures, service and the way each country handles adversity. Spain and IB are acting like they have permanently arrived at respectability when in fact they are teetering on dismissal.

No clue what you are referring to here, of course each country in Europe is different, with a unique heritage, etc., but I see no difference in between the labor actions by IB unions and unions in any other affected sector. Strikes tend to be a very nasty affair... They are nasty in western Europe, just as they are nasty here in the United States.

Quoting robbb (Reply 22):
European law doesn't provide for bankruptcy, reorganisation, re-emergence as it does in the Americas. The airline would either have to be bought or closed down and replaced with another.

This comment is the most relevant, as it deals directly with corporate governance and the economic incentives of the various constituencies involved in any reorganization, labor, management, suppliers, customers, the government, etc.

In continental Europe, the concept of bankruptcy and reorganization is treated as a "commercial crime" against creditors, rather than an opportunity by affected parties to re-negotiate their commitments to each other.

Here in the United States, we recognize corporations and corporate investors, whether creditors or equity holders, assume commercial risk. Sometimes, corporations encounter overwhelming risk and are unable to satisfy their obligations, obligations to employees, investors, the government, etc. When this happens, it is known the best way to achieve a sustainable solution is to maximize the value of the corporation's assets and, perhaps most importantly, its intangible BUSINESS FRANCHISE.

When a corporation is liquidated, this intangible value, its business strategy, disappears, only its assets are available to satisfy obligations. The creditors recognize this and, when a corporation enters Chapter 11 reorganization, they band together, form a creditors' committee and, assume corporate governance, along with the Federal court assigned responsibility to the case.

In the case of the IB, its owner, IAG, probably recognizes the equity value in IB is close to zero, given all the employee obligations, etc. It does have an opportunity, however, to renegotiate the terms under which its employees operate and take advantage of real, established commercial opportunities. If Spain had a Chapter 11 law, IAG could theoretically re-negotiate directly with labor and create new, more flexible, lower cost arrangements. Of course, doing so could place its ownership equity at risk, and IAG could need to offer labor equity, for example, in the publicly-traded group parent, IAG.

Unfortunately, this concept does not yet have broad political and social support in Spain or other western European nations. Over time, it will have to...
 
BestWestern
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 2:31 pm

Quoting PDPsol (Reply 11):
All this silly talk of xenophobia, Franco's legacy, blaming the British, etc. is ridiculous.

From Twitter today...


You are 100 times more likely to catch a cold on a flight than an average person!
 
acelanzarote
Posts: 458
Joined: Wed Nov 09, 2005 10:52 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 2:43 pm

And if say they did, do they really think it would make any difference to the outcome for Iberia....
Changes are required to avoid following Spanair down the plug...
But tunnel vision is a big problem in Spain, I see it every day...
from the Island with sun and great photo's.. Why not visit Lanzarote
 
PDPsol
Posts: 1109
Joined: Fri Feb 20, 2004 5:09 am

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 3:45 pm

Quoting BestWestern (Reply 29):
From Twitter today...

Well, as mentioned, silly all around. Unions and labor always attempt to create a narrative supporting their claims, which are always material in nature. Labor would like job security, they would like employment benefits, they would like to maintain compensation levels, they would like control over their working hours, all workers would like these things.

However, it is often useful to focus the public's attention on issues having nothing to do with items directly related to labor grievances, including political issues. This is what is happening here, claiming IAG are "piratas ingleses". However, it does not mean IB employees are "xenophobic", nor does it mean IB is a "kind of heritage from Franco" or any other silly political or nationalist argument.

The IB labor dispute is over resources and, to some extent, corporate governance, as well. Note I use the term, "resources", broadly to include benefits, work hours, etc. All the parties know this.

Restructuring will mean job losses and difficulties for many people, never an easy process. It has been seen before, throughout Spain and the rest of western Europe, and will continue for many years in the future in many other sectors. IB is simply one example...
 
Clydenairways
Posts: 1099
Joined: Thu Jan 11, 2007 8:27 am

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 5:10 pm

Quoting summa767 (Reply 6):
Unfortunately many Iberia employees, and certainly its pilot union that don't seem to have a grasp of reality, don't seem to realise the state of the Spanish economy and the effect that has on demand, nor about the increasing competition, particularly in the Latin American market that has been Iberia's forte. As far as the are concerned, the British are ransacking Iberia. Xenophobia is clearly a basic instinct.

This is clearly Union tactics that have been used all over the world before so are hardly unique to The Iberia unions or Spain.
An example for you.
http://www.reuters.com/article/2011/...ntas-threats-idUSTRE7940H520111005

Quoting summa767 (Reply 6):
British people should be aware of these attitudes next time they think of a trip to Spain.

So because a few union bod's hold up a few banners with populist slogans, you are tarring the whole country with the same brush.
BASSA the BA cabin crew union had a massive Anti Willie Walsh campaign during the BA strike a couple of years back, and some of it was quite personal.
There was a picture of a protester wearing a picture of Willie's face superimposed onto Hitler.... Every Union strike campaign needs a villain to target !
http://www.thesun.co.uk/sol/homepage...ties-on-to-the-BA-picket-line.html
 
Summa767
Posts: 1751
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 5:40 pm

Quoting clydenairways (Reply 32):
So because a few union bod's hold up a few banners with populist slogans, you are tarring the whole country with the same brush.

Unfortunately the anti-British sentiment is more widespread than you may think. I have heard it on newspapers, TV interviews, radio programmes, where a common phrase is "English pirates" by representatives of different unions. I am well aware that not all Spanish people think like that, but that the airport agents (the ones who typed BRITISH GO HOME on several screens at MAD), plus others with placards -NOT for the first time, btw: It has gone on for months- who deal with British passengers do it, it is very unsavoury indeed.
 
BA0197
Posts: 384
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 6:11 pm

Quoting UALWN (Reply 16):
The state of the Spanish economy and the unemployment do not seem to affect UX or VY, which keep posting profits...

Because they provide what the customer expects (a low-cost reliable service). Simple answer really.

Quoting AA94 (Reply 19):
I think he was saying it more in the sense that IB employees shouldn't complain about their job, but rather they should feel lucky that they even have a job considering the Spanish unemployment situation.

I meant it like that as well.

Quoting summa767 (Reply 33):
I am well aware that not all Spanish people think like that, but that the airport agents (the ones who typed BRITISH GO HOME on several screens at MAD), plus others with placards -NOT for the first time, btw:

We all know that if BA hadn't bought IB, IB would be a thriving carrier and setting the standard for international air travel....
 
LHRFlyer
Posts: 685
Joined: Sun Apr 11, 2010 12:50 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 9:22 pm

Quoting robbb (Reply 22):
In the case of Mr Walsh, I'm afraid I don't believe a word he says. He's a ruthless little man driven purely by corporate greed, I don't believe his "fight for survival" existed at BA, nor do I believe it exists at IB.

You may not like, or trust, Willie Walsh, and he may be ruthless but to say that he is driven by corporate greed is wrong.

The ruthlessness is driven by necessity. "Fight for survival" may not have been the most well chosen words to descrive BA's financial predicament four years ago, but there was no doubt the airline was facing very severe trading conditions.

Between the financial years March 2009 and March 2010, BA's revenues fell by £1billion and it had to issue a convertible bond to raise £350m of cash. Luckily, the company's fuel bill over the same year fell by over £600m. Otherwise events could have taken a very different turn. As recent retail failures in the UK have shown, you have to maintain the confidence of investors and suppliers, otherwise events will spiral out of control quite quickly. Airlines would not survive without credit from their suppliers and sitting on your hands and hoping everything will turn out OK simply isn't an option.

It's also worth remembering that in the first decade of this century, largely with the exception of the investment in Terminal 5, BA put the brakes on virtually all capital expenditure. It now has a lot of things that need to be paid for over the next few years, not least replacements for nearly 50 Boeing 747s.

Nor is Iberia's financial predicament a work of fiction. It is burning through cash and IAG has to plug a hole in the cash drain urgently.
 
PDPsol
Posts: 1109
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RE: Is There A Future For Iberia?

Tue Feb 19, 2013 10:36 pm

Frankly, the situation has very little, or nothing to do with this:

Quoting summa767 (Reply 33):
Unfortunately the anti-British sentiment is more widespread than you may think. I have heard it on newspapers, TV interviews, radio programmes, where a common phrase is "English pirates" by representatives of different unions. I am well aware that not all Spanish people think like that, but that the airport agents (the ones who typed BRITISH GO HOME on several screens at MAD), plus others with placards -NOT for the first time, btw: It has gone on for months- who deal with British passengers do it, it is very unsavoury indeed.

And a lot more to do with real commercial issues and risks:

Quoting LHRFlyer (Reply 35):
Nor is Iberia's financial predicament a work of fiction. It is burning through cash and IAG has to plug a hole in the cash drain urgently.

The issue has always been about resources and corporate governance. No one is doubting that IB was subject to political meddling, or denying that unions have tried to use political influence to achieve their objectives, surely these things have happened. However, this is no different than any other industry in restructuring, whether here in the United States, or in western Europe.

Another very valid example:

Quoting clydenairways (Reply 32):
This is clearly Union tactics that have been used all over the world before so are hardly unique to The Iberia unions or Spain.
An example for you.
http://www.reuters.com/article/2011/...11005

No doubt the crisis in Spain is reaching a kind of 'boiling point' and IB is merely a 'canary in a coalmine', illustrating nationwide problems and making very dramatic news copy for everyone to panic over.

However, claiming IB is influenced by 'Franco-era influences', or that Spain is 'xenophobic' or that 'British pirates' are 'taking over' is silly and ridiculous. The reality is much more mundane and commonplace...
 
UALWN
Posts: 2171
Joined: Mon Jun 01, 2009 3:27 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 10:46 pm

Quoting summa767 (Reply 33):
I have heard it on newspapers, TV interviews, radio programmes, where a common phrase is "English pirates" by representatives of different unions.

The fact that the IB union representatives blame the British for IB's troubles on TV, radio or wherever does not mean that the anti-British sentiment is more widespread.

Quoting BA0197 (Reply 34):
Because they provide what the customer expects (a low-cost reliable service).

UX is not an LCC.
AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/787/AB6/310/32X/330/340/380
 
Summa767
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Joined: Thu Mar 11, 2004 1:30 am

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 10:54 pm

Quoting PDPsol (Reply 36):
However, claiming IB is influenced by 'Franco-era influences', or that Spain is 'xenophobic'

How you misconstruct arguments. It's not that Spain as a country is xenophobic, but that the unions have been using the argument that British "pirates" are bleeding Iberia. That Iberia was a perfectly profitable airline until the merger with BA (even going on to say that IB's money has gone to plug the BA pension hole, and closing routes for BA to take over.Oh, and that all BA wants is to take over T4 among other non-sense). According to them, BA the root of the problem, and hence why you see the anti-British statements.

As I said before, Iberia has a future, but obviously it needs to be competitive, and that means controlling its costs, and providing a good service (on the hard product at least, that is starting to happen).
 
IBERIA747
Posts: 1648
Joined: Tue Aug 19, 2003 3:43 am

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 10:56 pm



Quoting spantax (Thread starter):
bought IB
Quoting spantax (Thread starter):
the lay off of 3,800 employees due to the acquisition of IB by the British
Quoting BA0197 (Reply 34):
We all know that if BA hadn't bought IB

For the XXXth time...

Iberia HAS NOT been bought by British Airways.

Quoting skipness1E (Reply 3):
Iberia was not acquired by the British at all. IAG is the holding company that owns both BA and IB

 checkmark 

[Edited 2013-02-19 15:01:16]
¡¡VIVA ESPAÑA!!
 
BA0197
Posts: 384
Joined: Wed Jul 13, 2011 5:09 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 11:13 pm

Quoting IBERIA747 (Reply 39):
For the XXXth time...

Iberia HAS NOT been bought by British Airways.

I do know that, I was rather saying that by implying that that is the view some IB staff take: that IB has been taken over by BA. That is why I used the dots afterwards.

I do know what I am talking about and I was rather hoping most would catch my joke there as I have already clearly voiced my views.
 
shuttle9juliet
Posts: 313
Joined: Sat Jul 31, 2010 3:12 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 11:28 pm

Quoting LHRFlyer (Reply 35):

Just ask Bertie Ahern about Mr Walsh being a corporate raider.
 
User avatar
autothrust
Posts: 1455
Joined: Sun Jun 11, 2006 8:54 pm

RE: Is There A Future For Iberia?

Tue Feb 19, 2013 11:59 pm

Quoting PDPsol (Reply 36):
owever, claiming IB is influenced by 'Franco-era influences', or that Spain is 'xenophobic' or that 'British pirates' are 'taking over' is silly and ridiculous.

Couldn't agree more. The people are just fearing loosing their jobs. And BA is a good black sheep.

Quoting PDPsol (Reply 36):
No doubt the crisis in Spain is reaching a kind of 'boiling point'

Indeed, the crisis has hit Spain very hard and now it's culminating.
“Faliure is not an option.”
 
BestWestern
Posts: 6998
Joined: Fri Sep 08, 2000 8:46 pm

RE: Is There A Future For Iberia?

Wed Feb 20, 2013 12:10 am

Quoting shuttle9juliet (Reply 41):
Just ask Bertie Ahern about Mr Walsh being a corporate raider.

Ah Yes, that wonderful example of a quality politician.

Mr Walsh proposed a management buy-out which was refused by the Irish government.

Quoting autothrust (Reply 42):
Indeed, the crisis has hit Spain very hard and now it's culminating.

It hasn't culminated yet....
You are 100 times more likely to catch a cold on a flight than an average person!
 
Asturias
Posts: 1953
Joined: Wed Apr 05, 2006 5:32 am

RE: Is There A Future For Iberia?

Wed Feb 20, 2013 7:28 pm

Quoting LHRFlyer (Reply 35):
You may not like, or trust, Willie Walsh, and he may be ruthless but to say that he is driven by corporate greed is wrong.

Looking at his history at Aer Lingus, one might be inclined to agree that he's pretty much driven only by corporate greed. A parasite.

-a
Tonight we fly
 
robbb
Posts: 12
Joined: Fri Feb 01, 2013 9:16 pm

RE: Is There A Future For Iberia?

Wed Feb 20, 2013 8:24 pm

Quoting LHRFlyer (Reply 35):

Fight for survival was not poorly chosen words it was either a statement of fact or not, but we'll have to agree to disagree on this whole subject. The accounting used to back WW's fight for survival at BA was to my mind followed by a turnround so miraculous as to be way out of proportion to any remedial action taken by BA. As far as I'm concerned it never existed and you will never convince me otherwise.

As for the Iberia fight for survival, I don't know enough about Iberia but I can't help but feel the same person and the same motivation are behind it.

[Edited 2013-02-20 12:25:45]
 
LHRFlyer
Posts: 685
Joined: Sun Apr 11, 2010 12:50 pm

RE: Is There A Future For Iberia?

Wed Feb 20, 2013 9:12 pm

Quoting robbb (Reply 45):
The accounting used to back WW's fight for survival at BA was to my mind followed by a turnround so miraculous as to be way out of proportion to any remedial action taken by BA. As far as I'm concerned it never existed and you will never convince me otherwise.

So the £1billion fall in revenue never happened? You're accusing BA's auditors of colluding with BA in engaging in false accounting?

You say you will never be convinced that BA faced very severe trading conditions even though you have no evidence to support your view?

Was the staging of collapse of Lehman Brothers, the near collapse of two major UK retail banks and the near collapse of the global financial system (which London is the epicentre of) also part of this vast conspiracy against BA cabin crew?

What about the £1,000 business class fares to New York? The 50% on business class redemptions for frequent flyers?

Sorry but the total refusal of cabin crew and their union to engage with reality is exactly what resulted in them throwing themselves off a cliff and finding themselves and their members now permanently sidelined - the only BA workgroup to do so. And BA's profitability may have improved, but as an operating margin it's still far short of the highs before the financial crisis.

[Edited 2013-02-20 13:19:23]
 
shuttle9juliet
Posts: 313
Joined: Sat Jul 31, 2010 3:12 pm

RE: Is There A Future For Iberia?

Wed Feb 20, 2013 11:42 pm

Quoting LHRFlyer (Reply 46):

Are you sure you are not Willie Walsh in disguise? Ha ha it's a joke!!!
LHRFlyer, people are only giving you their opinions, it's nothing personal against you.
You do have to look at both sides of the story and how that man has affected a lot of people working for BA,Aer Lingus and now Iberia.

Just another thing what you said to Robb, in that "are you accusing BA auditors of colluding with BA in engaging in false accounting" well was it just not that long ago that two certain executives George and Burns were "cleared" of colluding in price fixing?
 
Asturias
Posts: 1953
Joined: Wed Apr 05, 2006 5:32 am

RE: Is There A Future For Iberia?

Thu Feb 21, 2013 12:09 am

Quoting LHRFlyer (Reply 46):
You're accusing BA's auditors of colluding with BA in engaging in false accounting?

You question this idea as if it were absurd?

Arthur Andersen LLP comes to mind. Auditors collude with their clients. It's well within the realm of reality.

-a
Tonight we fly
 
madhatter
Posts: 223
Joined: Mon Jan 08, 2001 6:37 am

RE: Is There A Future For Iberia?

Thu Feb 21, 2013 12:42 am

Quoting Asturias (Reply 48):
Quoting LHRFlyer (Reply 46):
You're accusing BA's auditors of colluding with BA in engaging in false accounting?

You question this idea as if it were absurd?

Arthur Andersen LLP comes to mind. Auditors collude with their clients. It's well within the realm of reality.

Asturias this is quite possibly one of the most ridiculous comments made so far on this post and there have been a few. This practice is illegal and is the reason why Arthur Andersen are no longer in existence today due to their handling of the Enron audit. I would suggest you read up on your topic before making such wild and incorrect accusations.

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