IAG to cut jobs at Iberia
British Airways’ parent IAG remains focused on "stringent cost control" across the group, including job losses at Iberia.
Announcing its latest financial results today, the group warned it will make a “small loss” this year due to problems with the Spanish airline.
Chief executive Willie Walsh said: "A number of factors have improved over the past three months.
“Underlying British Airways trading conditions remain firm and bmi integration is on track, but any benefit from an easing of fuel prices has been more than offset by the deterioration in Spanish economic conditions.
"We were previously targeting a break-even operating result this year, after the impact of restructuring costs and the short term earnings drag from the bmi acquisition.
"However, in the light of the Spanish macro headwind, we now expect to make a small operating loss in 2012."
The group is putting together a "restructuring plan" for Iberia, which it hopes to finalise by the end of September.
"Iberia’s problems are deep and structural and the economic environment reinforces the need for permanent structural change," said Walsh.
"Inevitably, we will not be able to avoid job losses as part of this process."
IAG, which bought bmi from Lufthansa earlier this year, made an operating loss of €4 million in the quarter to June 30 2012, including €50 million of bmi losses before exceptional items.
Revenue was up 11.5% but this was countered by a 25.1% increase in fuel costs to €314 million.
For the half year, IAG reported a half-year operating loss of €253 million, despite BA being in profit.
While BA made a profit of €13 million, Iberia contributed an operating loss of €263 million.
Pre-tax loss was €390 million compared to a profit of €39 million in the same period last year.
by Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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