New Plan of Iberia to Cut Costs

by Abbey on 27/10/09 at 9:54 am

Iberia decided to approve a strategy, called Plan 2012, the aim of the plan is to increase operating profile by €450 million. To fulfill the plan the company decided to cut costs and make efficient improvements. Rafael Sanchez-Lozano said that as the airline industry underwent a dramatic situation, it was decided to modify Iberia into a viable project. In the first half Iberia Group stated a consolidated dead loss of €165.4 million that could lead to a full-year deficit for the first time in 14 years.

It is decided that a new short- and medium-haul airline will operate as an independent network carrier which will have a service like IB has that will be able to feed the profitable long-haul network through its Madrid hub.

According to a spokesperson of ATWOnline, despite the fact that Iberia was considered to be the leader of the Europe-to-Latin America routes, still it had a structural problem in its domestic and European operations. For that reason it was decided to settle a new model that would lower operation costs and there would be no ‘legacy’ work practices due to which it would be possible for Iberia to rival with other carriers.

In spite of the fact that there are opponents of this new model, one should say that it will help to secure jobs. Another thing that happened to Iberia Airline Company was a two day strike that led to the cancellation of 404 flights. The strike was held in order to support salary demands.

Initiators of the strike were 4,300 staff from labor unions that wanted to stop a four-year pay freeze. It is also expected that stoppages will be on November 10 and 11. Such situation can lead to the fact that Iberia will have to compensate losses or buy tickets on other days to its passengers.

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