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Tag Archives: Iberia

IAG reports a third quarter net profit of $751 million

International Airlines Group (IAG) (British Airways, Iberia, Iberia Express and Vueling Airlines) (London) reported a third quarter net profit of €598 million ($751 million) up 3.1% from €580 million ($728.4 million) in the same quarter a year ago.

The airline group issued this full statement:

NINE MONTHS RESULTS ANNOUNCEMENT

International Consolidated Airlines Group (IAG) presented Group consolidated results for the nine months to September 30, 2014.

IAG period highlights on results:

  • Third quarter operating profit €900 million (2013: €690 million) before exceptional items, €210 million better than last year
  • At constant currency, third quarter passenger unit revenue down 0.9 per cent and non-fuel unit costs down 4.5 per cent
  • Revenue for the quarter up 8.5 per cent to €5,866 million, up 6.9 per cent at constant currency
  • Fuel unit costs for the quarter down 7.5 per cent at constant currency
  • Operating profit for the nine months €1,130 million (2013: €657 million) before exceptional items, €473 million better than last year
  • Exceptional charge of €82 million for currency re-evaluation
  • Cash of €5,064 million at September 30, 2014, up €1,431 million on 2013 year end
  • Adjusted gearing down 4 points to 46 per centPerformance summary:

Nine months to September 30

Financial data € million

2014

2013

Higher / (lower)

Passenger revenue

13,435

12,299

9.2 %

Total revenue

15,155

14,113

7.4 %

Operating profit before exceptional items

1,130

657

Exceptional items

(82)

(309)

Operating profit after exceptional items

1,048

348

Profit after tax and exceptional items

694

77

Basic earnings per share (€ cents)

33.4

3.2

Operating figures

2014

2013

Higher / (lower)

Available seat kilometres (ASK million)

190,234

172,234

10.5 %

Revenue passenger kilometres (RPK million)

153,537

140,220

9.5 %

Seat factor (per cent)

80.7

81.4

(0.7pts)

Passenger revenue per RPK (€ cents)

8.75

8.77

(0.2)%

Passenger unit revenue per ASK (€ cents)

7.06

7.14

(1.1)%

Non-fuel unit costs per ASK (€ cents)

5.00

5.21

(4.0)%

€ million

At September 30,

At December 31,

Higher / (lower)

2014

2013

Cash and interest-bearing deposits

5,064

3,633

39.4 %

Adjusted net debt(1)

5,547

5,701

(2.7)%

Adjusted gearing(2)

46%

50%

(4pts)

(1) Adjusted net debt is net debt plus capitalised operating aircraft lease costs.
(2) Adjusted gearing is adjusted net debt, divided by adjusted net debt and adjusted equity.

Willie Walsh, IAG Chief Executive Officer, said:

“This quarter we are reporting an operating profit before exceptional items of €900 million. At constant currency, revenue was up 6.9 per cent with non-fuel unit costs down 4.5 per cent and fuel unit costs down 7.5 per cent.

“We continued to grow capacity efficiently and both our non-fuel and fuel unit cost performances were strong with the latter boosted by the introduction of new, more efficient aircraft into our fleet.

“British Airways made an operating profit of €607 million, compared to €477 million last year, and grew capacity while retaining its focus on cost control. Iberia’s operating profit increased to €162 million from €74 million last year highlighting its strong cost discipline combined with the continued benefits of restructuring. Vueling continued to grow, developing new bases in Italy and Belgium, with an operating profit of €140 million compared to €139 million last year.

“In the nine months, we made an operating profit of €1,130 million before exceptional items, up by €473 million from last year”.

Copyright Photo: Paul Denton/AirlinersGallery.com. Iberia improved its financial performance with labor stability which was one of the main drivers for a better financial performance of the group in the third quarter. Iberia’s Airbus A320-214 EC-MCS (msn 6244) taxies at Geneva in the new look.

British Airways: AG Slide Show

Iberia: AG Slide Show

Iberia Express: AG Slide Show

Vueling Airlines: AG Slide Show

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IAG converts eight Airbus A330-200 options into firm orders for Iberia

Iberia A330-200 (13)(Flt)(Airbus)(LRW)

IAG (British Airways and Iberia) (London) has decided to convert eight A330-200 options, previously announced, into firm orders for Spain’s flag carrier Iberia, which will become a new operator of the A330-200. The aircraft will be delivered from the end of 2015 and will be equipped with GE CF6 engines. Iberia’s all Airbus fleet already includes eight A330-300s.

Iberia today operates an all Airbus fleet, including 13 A319, 12 A320, 18 A321, 8 A330-300, 8 A340-300 and 17 A340-600. On August 1, 2014, the new A330s were announced alongside an order for eight Airbus A350-900 aircraft. In total they will replace 16 A340 family aircraft in Iberia’s long-haul fleet. The airline flies to more than a 100 destinations in 38 countries.

Image: Airbus.

Iberia: AG Slide Show

Iberia’s new Airbus A321 basketball world championship logo jet

Iberia (Madrid) is promoting the basketball world championship to be played in Spain this month.

The aircraft involved is Airbus A321-213 EC-JLI (msn 2563).

Video: Iberia.

Iberia: AG Slide Show

Iberia celebrates 60 years of flying to New York

Iberia (Madrid) this week is celebrating the 60th anniversary of its first flight from Madrid to New York and return on August 3, 1954 on a 74-seat Lockheed 1049E Super Constellation. Five days later, on August 8, 1954, Iberia started regular service with three roundtrips a week between the two cities.

Today, 60 years later, Iberia serves the route with 17 roundtrips a week mainly flown with Airbus A340-600s and A330-300s.

Iberia: AG Slide Show

Video: Iberia.

IAG has its best second quarter since 2007

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London) reported second quarter net income of €280 million ($376 million) up from €127 million ($170.5 million) net income for the same period a year ago. This is the best second quarter results since 2007.

Read the full report: CLICK HERE

Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-336 ER G-BNWD (msn 24336) of British Airways arrives at Baltimore/Washington.

British Airways: AG Slide Show

Iberia: AG Slide Show

Vueling Airlines: AG Slide Show

Iberia to add Airbus A330-200s and A350-900s to replace the A340s

Iberia A350-900 (13)(Flt)(IAG)(LRW)

Iberia (Iberia) will be getting new additional long-range aircraft to replace its older Airbus A340s. Parent IAG has made this announcement:

International Airlines Group (IAG) is converting eight Airbus A350-900 aircraft options into firm orders and securing eight A330-200 aircraft for Iberia.

These aircraft will replace 16 Airbus A340 family aircraft in Iberia’s long-haul fleet and will be delivered between 2015 and 2020.

Willie Walsh, IAG chief executive, said: “Iberia has taken significant steps to restructure its business and the progress made so far means that we can bring new longhaul aircraft into the airline’s fleet. These orders demonstrate our commitment to make Iberia competitive.

“Both aircraft will provide cost efficiencies and environmental benefits, enabling Iberia to replace its long haul fleet with modern and fuel efficient aircraft. The new technology and improved aerodynamics will lower fuel burn and CO2 emissions per seat by 18 per cent, as well as providing both noise and NOx performance advantages.

“Retaining an all Airbus long-haul fleet will also generate cost savings in maintenance and crewing”.

IAG secured commercial terms for the A350 aircraft as part of the Group long-haul order announced in April 2013.

The eight A330 aircraft will be obtained either by converting existing options from the 2011 Airbus order or from the operating lease market, depending on financial and delivery terms.

Image: Airbus/IAG.

Iberia:

Iberia resumes flights to Istanbul

Iberia (Madrid) on June 20 resumed daily flights between its Madrid hub and Istanbul, Turkey. The restored route will now operate with Airbus A320s, with Business and Economy sections.

Iberia has also announced it is restoring IB service to Amsterdam, Athens and Stockholm in Europe, and to Montevideo in Uruguay and Santo Domingo in the Dominican Republic starting on September 1.

Copyright Photo: Paul Denton/AirlinersGallery.com. Airbus A320-214 EC-IZR (msn 2242) in the Oneworld color scheme completes its final approach to the runway at the Madrid (Barajas) hub.

Iberia:

Iberia resumes summer services to Croatia

Iberia (Madrid) resumed its summer services to Croatia on June 9 with a Madrid-Dubrovnik flight, which will operate Mondays, Thursdays, Saturdays and Sundays until September 29.

Flights to the Croatian capital of Zagreb, will be resumed on Saturday, June 14. Airbus A320-family aircraft with 172 seats will be used on the Saturday and Sunday return flights from Madrid.

On July 19 Iberia’s franchise partner Iberia Regional/Air Nostrum will resume thrice-weekly services to the Croatian city of Split, flying Wednesdays, Thursdays, and Saturdays until August 30.

Copyright Photo: Javier Rodriguez/AirlinersGallery.com. Iberia’s Airbus A321-213 EC-JGS (msn 2472) in the new look taxies at the Madrid hub.

Video: Repainting an Airbus:

Iberia: AG Slide Show

 

 

Iberia paints its Airbus A330-302 EC-LYF for the FIFA World Cup

Iberia A330-300 EC-LYF (14-FIFA World Cup)(Flt)(Iberia)(LRW)

Iberia (Madrid) in advance of the upcoming 2014 FIFA World Cup in Brazil, has painted its Airbus A330-302 EC-LYF (msn 1437) in this special livery. The A330 will transport the Spanish team and soccer fans to Brazil.

The inscription across the aircraft translates as “carry the illusion of an entire country”.

Image: Iberia.

Iberia: AG Slide Show

Video: The painting of EC-LYF:

IAG reduces its first quarter loss to $206.3 million

International Consolidated Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London) today (May 9, 2014) presented Group consolidated results for the first quarter and the three months to March 31, 2014.

IAG period highlights on results:

. First quarter operating loss €150 million ($206.3 million) (2013: operating loss of €278 million – $382.3 million) before exceptional items
. Revenue for the quarter up 6.7 per cent to €4,203 million, up 7.6 per cent at constant currency
. Non-fuel costs up 3.8 per cent, up 4.8 per cent at constant currency
. At constant currency, first quarter passenger unit revenue down 1.4 per cent (excluding Vueling down 0.5 per cent) and non-fuel unit costs down 6.2 per cent (excluding Vueling down 4.2 per cent)
. Fuel unit costs for the quarter down 8.9 per cent, 7.4 per cent at constant currency
. Cash of €4,004 million at March 31, 2014 was up €371 million on 2013 year end
. Adjusted gearing remains at 50 per cent

Willie Walsh, IAG Chief Executive Officer, said:

“We’re pleased that our quarterly operating loss has reduced significantly from €278 million last year to €150 million, especially as Vueling’s quarterly losses were not included last year as they weren’t in the Group. At constant currency, revenue was up 7.6 per cent and non-fuel costs rose 4.8 per cent.

“Iberia has almost halved its losses from quarter one last year with an operating loss of €111 million compared to €202 million. The airline continues to benefit from restructuring and these figures don’t reflect the impact of recent pay and productivity agreements which took effect in April. While the restructuring remains work in progress, Iberia is gradually resuming some routes including longhaul services to Santo Domingo and Montevideo.

“British Airways made an operating loss of €5 million in the quarter, compared to a €72 million operating loss in 2013. The airline has increased capacity within a controlled cost environment and benefited from the efficiency of its new Airbus A380 and Boeing 787 aircraft.

“Vueling made an operating loss of €30 million and has managed to keep its losses flat while growing capacity. The airline continues to grow with its main focus in southern Europe”.

Copyright Photo: Antony J. Best/AirlinersGallery.com. British Airways’ Airbus A380-841 G-XLEB (msn 121) approaches the runway at London’s Heathrow Airport.

British Airways: AG Slide Show

Iberia: AG Slide Show

Vueling Airlines: AG Slide Show

 

Iberia becomes the first airline with its own scent

Iberia Scent

Iberia (Madrid) made this announcement today about becoming the first airline with it own scent as part of its new brand experience:

Iberia continues to renew its image, by becoming the first airline to create its own scent, which it has named “Mediterráneo de Iberia”.

It is a fresh, soft and delicate fragrance that provides a sense of wellbeing, a warm welcome to the airplane. The “Mediterráneo de Iberia” fragrance has notes of fruit, flowers and wood, with a touch of citrus: lemon, orange, bergamot and mandarin, elegantly combined to highlight the delicate of orange blossom.

Iberia (2013) logo

Iberia Scent wording

Iberia: AG Slide Show

Iberia to resume the Madrid-Montevideo route on September 1

Iberia (Madrid) will resume the Madrid-Montevideo, Uruguay route on September 1. The restored route will be operated four days a week with Airbus A340-300s.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Airbus A340-313X EC-IDF (msn 474) exits the active runway at Los Angeles International Airport.

Iberia: AG Slide Show

 

Iberia Group is adding new destinations

Iberia Group (Iberia and Iberia Express) (Madrid) has announced new routes from its Madrid hub.

Iberia Express has already added a new route to Stockholm (Arlanda) with two weekly flights. It will also add a new route to Amsterdam with twice-daily service starting on July 1.

Iberia Express is also increasing the number of flights to Berlin, Copenhagen, Dusseldorf and Frankfurt.

Iberia will add daily service to Istanbul starting on June 20. Santo Domingo will be added on September 1 with five weekly nonstop flights. Athens, which has been a summer route, will become a new year-round route.

Iberia is adding three weekly frequencies to Chicago (O’Hare) for the summer, two more to Panama City starting in July and additional frequencies to Brussels, Geneva, Munich, Rome, Tel Aviv, Venice and Zurich. Iberia has also resumed nonstop flights to Boston and Los Angeles and will also operate summer routes to Dubrovnik, St. Petersburg (Russia) and Zagreb.

Copyright Photo: Ariel Shocron/AirlinersGallery.com. Iberia Express’ Airbus A320-216 EC-LVQ (msn 5590) climbs away from the Madrid hub.

Iberia: AG Slide Show

Iberia Express: AG Slide Show

International Airlines Group returns to profitability for 2013

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London and Madrid) today (February 28, 2014) presented Group consolidated results for the year to December 31, 2013.

IAG Airlines logos

IAG period highlights on results:

  • Fourth quarter operating profit €113 million (2012: operating loss of €40 million) before exceptional items
  • At constant currency and excluding Vueling and one-offs, fourth quarter passenger unit revenue up 2.7 per cent, and non-fuel unit

    costs down 2.7 per cent

  • Operating profit for the year to December 31, 2013 of €770 million (2012: operating loss of €23 million) before exceptional items
  • Revenue for the year up 3.1 per cent to €18,675 million and passenger unit revenue for the year up 0.6 per cent (3.7 per cent at constant currency)
  • Fuel costs for the year down 2.5 per cent to €5,951 million (2012: €6,101 million). Fuel unit costs down 5.0 per cent at constant currency
  • Non-fuel costs before exceptional items for year down 0.7 per cent at €11,954 million. Non-fuel unit costs down 5.6 per cent, down 2.7 per cent at constant currency
  • Cash of €3,633 million at December 31, 2013 was up €724 million on 2012 year end (December 2012: €2,909 million).
  • Adjusted gearing down 1 point to 50 per cent

Willie Walsh, IAG chief executive, said:

“In 2013, we strengthened the Group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability with a turnaround of nearly €800 million. Our operating profit was €770 million before exceptional items, with passenger revenue up 5.8 per cent and non-fuel costs down 0.7 per cent.

“British Airways continued its solid revenue performance this year and we’re seeing cost improvements, resulting in an operating profit of €762 million. This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration. Both the A380 and Boeing 787 were introduced into the airline’s fleet successfully. The new aircrafts’ economic and environmental performance has been excellent and customers love them.

“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166 million. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.

“Vueling is a great asset and provides a new cultural dimension to IAG. The airline reported an operating profit of €168 million from April 2013, when we acquired it, and expanded its network across continental Europe. To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the Group.

“We have shown strong financial management this year. Despite buying Vueling and increasing our capital expenditure, cash was up €724 million versus last year and adjusted gearing was down 1 point to 50 per cent.

“Quarter 4 saw an improved financial performance from all our airlines and we are reporting an operating profit of €113 million before exceptional items. Passenger revenue was up 4.0 per cent and non-fuel costs were down 4.1 per cent”.

Trading outlook:

In 2014 we expect to make steady progress towards our 2015 Group operating profit target of €1.8 billion, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.

Copyright Photo: Keith Burton/AirlinersGallery.com. Vueling has been a good buy for IAG. Formerly operated by Belle Air Europe, Airbus A320-214 EI-LIS (msn 3492) has been repainted at Southend.

British Airways: AG Slide Show

Iberia: AG Slide Show

Vueling Airlines: AG Slide Show

 

Iberia Maintenance to maintain the aircraft of newcomer Evelop Airlines

Iberia Maintenance (Barcelona) will maintain the two aircraft (Airbus A320 and A330) of newcomer Spanish charter airline Evelop Airlines (Palma de Mallorca). The renewable three-year contract covers “C” checks and maintenance of airframes, parts and the CFM56-5B4/3 engines at Iberia’s Maintenance facility at Barcelona (above).

Evelop Airlines was founded in 2013 and is owned by Barceló Viajes. Barceló Group acquired the assets of Orbest Airlines in 2013 following the collapse of Orizonia Corporation. Envelop operates for tour operators and specializes in long-range routes from Madrid to Caribbean destinations such as Punta Cana, Havana and Cancun.

Top Copyright Photo: Iberia.

Bottom Copyright Photo: Paul Bannwarth/AirlinersGallery.com. The pictured Airbus A320-214 EC-LZD (msn 5642) was leased by Evelop from GECAS on November 23, 2013. The airliner still wears the basic livery of Orbest.

Envelop logo

Current Routes:

Envelop 2.2014 Route Map

Iberia to use iPads in the cockpit as an “Electronic Flight Bag”

Iberia A321-200 EC-ILP Cockpit with iPads (Iberia)(LR)
Iberia (Madrid) will be the first Spanish airline to equip cockpits with the “Electronic Flight Bag”. The new iPads will replace the checklists, manuals, and other paper documents used in flight preparations and operations, and even to perform the calculations needed.
The devices will increase efficiency and safety, while reducing aircraft weight by some 60 kg., for overall savings in fuel worth an estimated 150,000 euros per month for the airline on short and medium haul routes.
According to the airline, “these electronic devices will provide instant access to all aircraft manuals, and to allow pilots to perform calculations of speed and distance during all phases of the flight. This application will enable the flight crews to view navigation maps and detailed airport maps.”
Iberia has already fitted one Airbus A321 (EC-ILP) with iPads for both the captain and the first officer. Iberia will soon equip an additional four short-haul and medium haul aircraft with the devices, which remain connected with the aircraft electrical system at all times.
Iberia: AG Slide Show

Video (in Spanish):

Iberia reaches an historic agreement with its pilots

Iberia (Madrid) and the International Airlines Group (IAG) (London) have issued this statement about a break through agreement with its pilots, represented by SEPLA:

International Airlines Group (IAG) announces today (February 13) that Iberia has reached agreement in principle with its pilots’ union, SEPLA, to introduce permanent structural change and improve the airline’s viability. It also heralds a new positive working relationship between Iberia and SEPLA after years of conflict.

This landmark agreement provides a strong foundation to put Iberia on the path towards sustainable profitable growth – the more positive of the two scenarios outlined at IAG’s Capital Markets Day in November 2013. It will also enable Iberia to become more competitive and reduce its cost base.

The main impacts of the agreement are:

· Fundamental productivity improvements within Iberia.

· Salaries to remain frozen until 2015 as outlined in the Mediation Agreement. After that date, increases will be subject to the airline’s profitability.

· The Mediation Agreement provided a 14 per cent salary reduction for pilots and an additional 4 per cent cut linked to the productivity agreement. With these productivity improvements, the 4 per cent will be returned.

· Facilitates the growth of Iberia and Iberia Express.

Luis Gallego, Iberia’s executive chairman, said: “I would like to thank the efforts made by SEPLA, the pilots and Iberia’s management team who worked together to reach this agreement. This groundbreaking deal reduces the cost structure and provides the foundation for the airline to grow profitably. A strong and profitable Iberia can protect jobs in the long term and boost tourism which is a key driver in Barajas and Spain’s economic recovery.

“Iberia is the natural airline choice for Latin America and this agreement will enable it to be a formidable competitor and build on its new brand, providing customers with great service and an extensive network.

“This agreement also enables the growth of Iberia Express with a competitive cost base and provides promotion opportunities for current Iberia and Iberia Express first officers. Iberia Express will help make Iberia profitable and stronger, by providing short haul feed, and will provide Spanish competition to low cost carriers”.

Willie Walsh, IAG’s chief executive said: “‘Luis Gallego, his team and SEPLA deserve congratulations for striking a bold deal that will mark the turning point in Iberia’s future. Luis has deservedly won the respect of the industry, his colleagues and the trade unions. Permanent structural change was the only way to save Iberia from slow decline. This agreement marks the beginning of its future”.

This agreement in principle is subject to the approval of SEPLA’s general assembly.

Copyright Photo: Eurospot/AirlinersGallery.com. Iberia wanted labor peace with its pilots before it unveiled this livery. It went ahead anyway and now it has the labor peace, at lease for now with the pilots. New Airbus A330-302 F-WWKA (man 1437) became EC-LYF on delivery on November 13, 2013. It is named “Juan Carlos I”.

Iberia: AG Slide Show

Iberia’s sixth Airbus A330-302 is named “Miami”

 

Iberia (Madrid) took delivery of its sixth new Airbus A330-302 (EC-LZJ, msn 1490) on January 24, 2014. The airline has named the aircraft “Miami”. The airliner is coming to MIA today and is expected to arrive around 1600 (4 pm). Miami International Airport once served as a mini Latin American hub (with McDonnell Douglas DC-9s) for Iberia.

Read the full statement from Iberia: CLICK HERE

Copyright Photo: Iberia.

Iberia: AG Slide Show

Video:

Iberia introduces a new color scheme

Iberia A330-300 (13)(Flt)(Iberia)(LR)

Iberia (Madrid) today introduced its long-awaited new livery. The pictured new color scheme retires the now famous “IB” logo on the tail.

The first aircraft to wear the new look will reportedly be the fifth new Airbus A330-302 which is expected to become EC-LYF (msn 1437). This new arrival will be delivered at the end of November.

Iberia (2013) logo

Images: Iberia.

What do you think?

Iberia: AG Slide Show

Iberia to introduce a new livery on October 15

Iberia logo

Iberia (Madrid) is planning to introduce a new color scheme on October 15. The company issued this statement:

On October 15 Iberia will present its new corporate logo and brand image at its new Madrid offices where its is concentrating company departments now dispersed throughout the Spanish capital.

The launch of the new image will become effective in mid-November with the delivery of Iberia’s first Airbus A330 bearing the new logo, which is presently nearing completion at the Airbus factory in Toulouse.
The new brand image, which will keep the current symbols and color scheme that identify the airline as the Spanish flag carrier, is part of a wider renovation and modernization program that is intended to make Iberia a modern, profitable, and sustainable company, attractive both to customers and staff.
New aircraft, totally redesigned cabins in all long-haul aircraft that will put both tourist and business class sections at the top of the market, plus a new website with expanded travel planning options ,are other aspects of the program, along with a major boost in punctuality –Iberia now ranks 7th amongst major airlines– and numerous improvements to passengers’ airport experience at Iberia’s T4 hub at Madrid- Barajas airport.
Before its labor unrest, Iberia was considering several designs for a new brand but tabled the idea during the period of strikes. One design under consideration featured a white fuselage with red titles and a red, white and gold tipped diagonal tail. The traditional IB logo was removed from this design. It is unclear at this time what design was selected.
Iberia: AG Slide Show

International Airlines Group loses $43.7 million in the first half, British Airways brings the new Airbus A380 to Frankfurt

British Airways (London) brought its new Airbus A380 to Frankfurt (above) on August 2 as the flag carrier continues to test out the new type on its short haul European routes before it is introduced on longer international routes.

In other news, parent International Airline Group (IAG) lost $43.7 million in the first half of 2013. However IAG had a good second quarter as it managed to cut losses at Iberia in the second quarter to $39.7 million. IAG has cut 1,700 jobs at Iberia (Madrid) and plans to cut another 1,700 by 2015.

IAG issued this financial statement:

International Consolidated Airlines Group (IAG) presented Group consolidated results for the six months to June 30, 2013.

IAG period highlights on results:

  • Second quarter operating profit €245 million (2012: loss €4 million) before exceptional items, based on strong passenger unit revenues and non-fuel unit cost improvements
  • Before Vueling at constant currency, second quarter passenger unit revenue up 4.8 per cent and non-fuel unit costs down 0.2 per cent
  • Operating loss for the half year €33 million (2012: loss €253 million) before exceptional items
  • Revenue for the half year up 2.1 per cent to €8,707 million including 1.7 per cent adverse currency impact
  • Passenger unit revenue for the half year up 2.8 per cent (4.6 per cent at constant currency), on capacity increase of 1.2 per cent
  • Fuel costs for the half year down 3.7 per cent to €2,864 million (2012: €2,973 million). Fuel unit costs down 4.7 per cent at constant currency
  • Non-fuel costs before exceptional items for the half year up 1.1 per cent at €5,876 million. Non-fuel unit costs down 0.2 per cent, up 0.9 per cent at constant currency
  • Cash €3,627 million at June 30, 2013, up €718 million including €549 million of Vueling cash
  • Adjusted gearing up 3 points to 54 per cent including Vueling

Willie Walsh also stated subsidiary Vueling Airlines (Barcelona) would be expanding again and would be taking on a larger role in intra-European routes. Higher-cost Iberia will be reducing its presence in Europe.

Copyright Photo: Bernhard Ross/AirlinersGallery.com. British Airways’ Airbus A380-841 G-XLEA (msn 095) taxies to the gate at Frankfurt.

British Airways: AG Slide Show

Video: British Airways has introduced this new “A Ticket to Visit Mum” video for the Indian market:

Iberia to cut wages further as the union talks fail, brings the new Airbus A330-300 to Miami

Iberia (Madrid) is facing more labor strife. According to this report by the Financial Times the company is planning deeper wage cuts after talks with the unions failed.

Read the full report: CLICK HERE

In other news, Iberia introduced the new Airbus A330-300 on the Madrid-Miami route on April 15.

With a configuration of 36 seats in the Business cabin and 242 in the Economy class, the Business Plus section in the new A330s features wider seats that unfold into perfectly flat beds almost 80 inches long, housed in individual modules, each of them with direct access to the aisle. The design and positioning of the new seats ensure greater privacy and comfort to passengers. Lighting in the Business class cabin changes at the different phases of the flight and the seats offer more space for customers’ belongings.

Business Plus passengers can also enjoy new, intuitive entertainment options, using 15.5” screens similar to that of tablet computers, plus 4.2” touch screen remotes with virtual keyboard, with which passengers can make telephone calls, send text messages, and easily access entertainment options. Each month some 50 feature films will be available, plus 80 TV series, documentaries, some 200 musical options, and 3D games, among many other choices.
In the Economy cabin, seats are more ergonomic and wider (18.1”). They are equipped with the most advanced inflight entertainment system: individual 9” touch screens, a wide film and TV series offer, documentaries, as well as a children’s programme. Every seat has a connection port for Apple devices and a USB port, while universal power sockets are also available.
Iberia will soon be adding Wi-Fi Internet access and SMS capability for all its long-haul customers. The Airbus A330s is a twin-engine aircraft and is 15% more fuel efficient than the aircraft it replaces.
The A330 already operates to Boston and it will soon serve New York and Chicago. Flights to Los Angeles, the fifth Iberia destination in the U.S., will be operated by the Airbus A340 aircraft – Iberia will refit its 17 A340-600 aircraft with the new product from next month.
Iberia will be operating two daily flights from Miami to Madrid during the next six months, three more than a year ago. Iberia started flying from Madrid to Miami on August, 1972.

Video:

 

Copyright Photo: Antony J. Best. Airbus A330-302 EC-LUB (msn 1377) arrives at London (Heathrow).

Iberia: AG Slide Show

Iberia puts its first Airbus A330-300 on trans-Atlantic service to Boston

Iberia (Madrid) on March 17 introduced its new Airbus A330-300 on its first trans-Atlantic route from Madrid to Boston. It is unclear if the type will be operated to Miami as planned.

AESA, the Spanish Aeronautical Safety Agency, granted Iberia ETOPS-90 minutes authority. Iberia hasn’t flown ETOPS flights since it retired its two Boeing 767-300s (EC-GTI and EC-GSU).

ETOPS stands for “Extended-range Twin-engine Operational Performance Standards”. Under ETOPS-90 the aircraft must follow a route that will allow it to reach a diversion airport within 90 minutes if one engine fails.

Copyright Photo: Wingnut. Airbus A330-302 EC-LUB (msn 1377) taxies at London (Heathrow).

Iberia: AG Slide Show

Iberia’s non-pilot workers call off any further strikes after reaching a compromise deal

Iberia (Madrid) may finally have some labor peace at least with its non-pilot workers. Most of the companies’ unions have called off any further strikes over job and salary cuts after accepting a compromise offer from a government-appointed mediator. However this deal does not include the pilots represented by SEPLA. The airline issued this statement:

Iberia and the unions representing 93% of its employees have agreed to the set of proposals made by mediator Gregorio Tudela with regard to the airline’s viability plan.

The signing of the agreement, which is binding on all employees since it was accepted by a majority, signifies the calling off the strike scheduled for March 18-22, and the withdrawal of the company’s plan for mass dismissals. The flight program will proceed normally next week.

Management said that the acceptance of the mediator’s proposals will oblige it to change many aspects of the initial viability plan, but considers it is worth it to reach an agreement, expressing its gratitude to Tudela, a university law professor, and describing it as a good starting point for restoring profitability, hence future viability.

Iberia will immediately ask unions to negotiate the measures needed to raise productivity. Management said the proposed staff reduction and wage cuts were a step in the right direction, but that they must be accompanied by specific productivity measures to ensure future sustainability.

The airline’s CEO, Rafael Sánchez-Lozano, said he was “satisfied to have achieved an agreement that enables us to advance towards a leaner, more viable Iberia, able to compete on more reasonable terms in the difficult commercial aviation business”. He added: “we all had to concede something, but the company is totally committed to keep negotiating with the unions about all the productivity elements that are required to return Iberia to the forefront of the world airline industry”. Sánchez-Lozano said: “the time has come for all of us to work together to build a future, and to apologise to customers for the inconveniences caused in recent weeks, in the hope that we can soon regain their trust. All employees will be involved in these efforts.”

The company regrets that the SEPLA pilots union remains outside the agreement reached, calling it “irresponsible, and showing no solidarity”, while expressing the hope that it will soon join the other unions in coming to terms for the good of the airline and its customers.

What will be SEPLA’s next move? Read the analysis by Reuters: CLICK HERE

Copyright Photo: Rolf Wallner. Iberia wants to updated its 1977 Lander livery with a new design if it can obtain labor peace. Airbus A320-214 EC-JFN (msn 2391) taxies at Zurich.
Iberia: AG Slide Show

IAG sinks to a pretax loss of $1.29 billion due to Iberia

International Consolidated Airlines Group (IAG) (British Airways and Iberia) (London) presented the Group’s consolidated results for the year to December 31, 2012. In addition, IAG presented combined results for the comparative year to December 31, 2011, including Iberia’s first 21 days of January in 2011.

IAG period highlights on combined results:

·      Operating loss for the year to December 31, 2012 of €23 million before exceptional items ($29.8 million) (2011: operating profit €485 million). After exceptional items operating loss for the year not including Iberia restructuring and impairment was €68 million, compared to our guidance in November of €120 million

·      Before exceptional items, British Airways made an operating profit of €347 million in the year to December 31, 2012 and Iberia made an operating loss of €351 million

·      Non-operating charges for the year were €384 million, including €266 million related to non-cash pensions accounting requirements

·      Loss before tax for the year of €997 million ($1.29 billion) (2011: profit before tax of €503 million), including restructuring charge of €202 million for the Iberia transformation plan and €343 million impairment of Iberia intangible assets

·      Revenue for the year up 10.9 per cent to €18,117 million (2011: €16,339 million), including €872 million or 5.4 per cent currency impact. Passenger unit revenue for the year up 9.4 per cent, on top of volume increases of 2.8 per cent

·      Fuel costs up 20.4 per cent to €6,101 million (2011: €5,068 million before exceptional items). Fuel unit costs up 16.8 per cent, or 8.4 per cent at constant currency

·      Non-fuel costs before exceptional items, up 11.6 per cent at €12,039 million, including €543 million of adverse currency translation. Non-fuel unit costs up 8.5 per cent, or 3.8 per cent at constant currency

·      Capital investment of €1,239 million (2011: €1,071 million) including over €400 million on pre-delivery payments for future aircraft

·      Cash of €2,909 million at December 31, 2012 was down €826 million on 2011 year end (December 2011: €3,735 million). Group net debt up €741 million to €1,889 million (December 2011: €1,148 million)

Many will now question what was British Airways thinking when it merged with Iberia to form the IAG? Mergers are not always the answer.

Copyright Photo: With its continued employee strikes, lack of labor peace and a soft economy in Spain, Iberia is a bleeding airline bringing down British Airways and the IAG. Iberia’s Airbus A340-313X EC-KSE (msn 170) climbs away from the MAD hub.

British Airways: AG Slide Show

Iberia: AG Slide Show

 

Iberia takes delivery of its first Airbus A330-300

Iberia A330-300 EC-LUB (77)(Apr) MAD (ASC)(LRW)

Iberia (Madrid) has taken delivery of the first of the five Airbus A330-302s that will enter service for the Spanish airline this year. The new type landed at 11:46 a.m. (1146) today at Iberia’s T4 hub at Madrid-Barajas airport.

The aircraft, A330-302 EC-LUB (msn 1377), is named “Tikal” and is equipped with IB’s new business and economy class interiors for long-haul flights.

In other news, the flag carrier is facing a new round of strikes by its employees on February 18 and February 22, grounding 415 of the 1,060 flights according to Reuters. The strike is also expected to affect Vueling Airlines and Iberia Express.

Copyright Photo: #SaveIberia. EC-LUB arrives at the MAD base. The new type is due to go into revenue service on the Madrid-Luanda route. Iberia had wanted to introduce a new livery with this new type but has decided to delay any new brand.

Iberia: AG Slide Show

Iberia to eliminate now 3,807 jobs

Iberia (Madrid) now says it will cut 3,807 jobs. The airline failed to impress its unions with this lower number of job cuts and faces new rounds of strikes later this month according to this report by Reuters.

Read the full report: CLICK HERE

Copyright Photo: Ariel Shocron. Airbus A340-642 EC-IZX (msn 601) climbs away from the Madrid hub.

Iberia: AG Slide Show

Iberia fails to find labor peace, faces new rounds of strikes later this month

Iberia‘s (Madrid) ground and cabin crews have rejected a new proposal by management on job and salary cuts and they now plan to strike for five consecutive days later this month according to this report by Reuters.

Read the full report: CLICK HERE

Meanwhile the IAG issued this short statement:

International Airlines Group (IAG) confirms that no agreement has been reached between Iberia and its trade unions over the airline’s transformation plan proposals, published on November 9, 2012.

Iberia will, therefore, press ahead with the previously announced capacity reduction of 15 per cent for 2013.

IAG will also move forward on alternative plans to return Iberia to break-even, in terms of operating cash flow, by the second half of this year and restore Iberia to an acceptable level of profitability by 2015.

Willie Walsh, IAG chief executive, said: “We’re disappointed that no agreement has been reached. Iberia is ready and willing to negotiate with the Trade Unions. We are determined and united to implement the necessary changes to secure the future survival and viability of Iberia”.

Copyright Photo: Dave Campbell. Iberia’s Airbus A340-642 EC-JNQ (msn 727) taxies to the runway at Miami International Airport bound for the MAD hub.

Iberia: AG Slide Show

Video: Iberia is getting ready to introduce the new Airbus A330. Five Airbus A330-302s are on order. Iberia plans to introduce a new color scheme if it can achieve any form of labor peace. In the meantime, the carrier has introduced this new video touting the features of the new aircraft.

Per Airline Route the carrier has delayed the introduction of the new type until February 20 and will be introduced on the Madrid-London (Heathrow) route. Madrid-Dakar will follow on March 9.

Iberia’s pilots agree to resume talks as long as there is growth at IB

Iberia‘s (Madrid) pilots have agreed to resume talks with the company according to Reuters. However the pilot’s union wants to see a growth plan at the airline rather than farming out service. Iberia, which plans to cut about 4,500 jobs, has set January 31 as the deadline for the unions to agree to the reorganization plan. Can both parties agree on this new course?

Read the full report from Reuters: CLICK HERE

Copyright Photo: Paul Denton. Iberia will be a smaller operator on European routes. Airbus A319-111 EC-HGT (msn 1247) prepares to land at Geneva.

Iberia: AG Slide Show

IAG applies for a tender offer to acquire Vueling Airlines

International Airlines Group-IAG’s (London), the parent of British Airways (London) and Iberia (Madrid), through its subsidiary Veloz Holdco, has formally filed an application for Vueling Airlines (Barcelona) through a tender offer. IAG is seeking authorization from the National Securities Market Commission of Spain for the market offer. IAG plans to acquire 16.2 million shares of Vueling Airlines or 51.14 percent of the total shares, that it does not already own through subsidiary Iberia, which already controls 45.85 percent of the Vueling shares.

Read the full report from IAG: CLICK HERE

Copyright Photo: Pedro Baptista. Vueling Airlines’ Airbus A319-112 EC-LRS (msn 3704) approaches Barcelona for landing.

Vueling Airlines: AG Slide Show

Strikes against Iberia are cancelled for this month, Iberia to drop three more Madrid routes

Iberia (Madrid) will not be dealing with any strikes this month. The unions have called off their December strikes and will readjust their strategy against the company in January. Iberia issued the following statement:

For Iberia, “calling off the strike can and should be a first step along the necessary path of dialogue and negotiation, which is the sole reasonable way to resolve the company’s problems without harming customers.”

The unions decided to call off the strike after meeting with Iberia Management under the auspices of the mediation and arbitration service. No agreement was reached at the meeting, despite Iberia’s undertaking to be flexible in considering the proposals advanced by the unions. However, though the opportunity to move forward was missed, the meeting could be another step towards future negotiations. Iberia hopes that in the future the possibilities of dialogue and negotiations will be exhausted before any new strikes are called since they inflict great harm on the company and its customers.
Iberia is delighted that its customers may now look forward to travelling without problems, though it regrets the damage already caused to company’s public image and to its business.
Iberia also thanks the mediation and arbitration service for its herculean efforts two bring the tow side closer together. Though no agreement was reached, its efforts had very positive results for Iberia’s customers.
Meanwhile Iberia will drop three more routes from Madrid in January: Athens (January 9), Cairo (January 21) and Istanbul (January 21) per Airline Route.
Copyright Photo: Ariel Shocron. Airbus A321-211 EC-JQZ (msn 2736) arrives back at the Madrid hub.
Iberia: AG Slide Show

Iberia to drop long-haul service to Havana, Montevideo, San Juan and Santo Domingo on March 31, braces for strikes

Iberia (Madrid) is dropping all long-haul service to Havana, Montevideo, San Juan and Santo Domingo. The last flights will be operated on March 31, 2013. The airline is also dropping flights to Athens, Istanbul and Cairo, which will be suspended in mid-January 2013. The company has issued the following statement:

Iberia has announced details of its new commercial and routes policies under the Transformation Plan it announced recently. The plan is intended to restore profitability to the airline, which racked up operating losses of 262 million euros in the first nine months of 2012, and thus to ensure its future viability.

The plan calls for optimizing the Spanish airline’s route network in 2013, strengthening the most strategic and profitable routes, and dropping loss makers. Subsequently, it expects to resume growth if economic and market conditions allow, increasing revenues while cutting sales costs, to build a solid platform for future growth.
Iberia plans to improve connections to its busiest long-haul flights, achieve a better balance between business and holiday traffic, and augment its future growth possibilities. Within the Transformation Plan, it will boost services to some long haul destinations such as Brazil, Mexico, Miami, Central America and Chile and Ecuador. It will also increase capacity to some other short and medium-haul destinations, including London, Casablanca, Algiers, Dakar, Nouakchott, and Malabo.
The airline will drop some routes now dominated by holiday traffic, where it competes on unfavourable terms with other airlines. These include flights to Athens, Istanbul and Cairo, which will be suspended in mid-January. From 1st April it will also suspend flights to Santo Domingo and Havana. San Juan de Puerto Rico will be offered via Miami and Montevideo via other Iberia destinations in the region.
Iberia pledges to be flexible with customers holding reservations or tickets for flights on the routes to be dropped. It will offer full refunds or alternative travel on other carriers – on Vueling to Athens, Egyptair to Cairo, Turkish Airlines to Istanbul, and Air Europa to Santo Domingo and Havana.
Following these changes, Iberia group airlines will fly to more than 90 cities in some 40 countries, some of them new territories for Iberia, such as Ghana, Mauritania, Angola, and the city of Oran in Algeria and Los Angeles in California.
To generate new revenues and reduce costs, Iberia will offer all-new Economy and Business class sections on its long-haul flights. The new cabin interiors, seats, and entertainment options will be available on the current fleet of Airbus A340-600s, and the A330s to be delivered starting early next year. The company is also working to improve ground services, while seeking additional sources of revenue, such as the new VIP lounges in Miami and Buenos Aires.
In addition, SIMA is calling for  a meeting with Iberia and its unions next week in an attempt to reach labor peace and to avoid planned strikes against the carrier this month. The company issued this statement:
On December 7 Iberia management met with the strike committee and with the contract negotiation committees of the unions representing its ground staff and cabin crews in a bid to advance with negotiations and to avert the series of day-long strikes called for the week before Christmas. Since no agreement was reached, new meetings have been scheduled for next week. The SEPLA pilots union refused to meet with the company.

Spain’s SIMA labor conflict arbitration body has summoned Iberia and the striking unions to a meeting on Monday (December 10) to explore the possibility of mediation.

Iberia regards the strikes as both a disproportionate and unjustified response to its new Transformation Plan, since the airline has already agreed to negotiate the labor aspects of the restructuring plan, aimed at restoring profitability and ensuring the future viability of the 85-year-old Spanish airline.

Unions have called six strike days, five of them consecutive, for one of the busiest weeks of the year, which will worsen the company’s current loss-making situation and seriously inconvenience thousands of customers, while bringing no possible benefit to employees.

The company’s position is that a strike to protest the restructuring plan is out of order since it has already agreed to negotiate the labour aspects of its plan that was unveiled in November. It says the strike will seriously worsen the company’s situation in a year when operating losses had already reached 262 million euros by end of September.

Since the strikes are scheduled for December 14 and December 17-21.

Copyright Photo: Bruce Drum. Airbus A340-642 EC-IZY (msn 604) pushes back from the gate at Miami bound for the Madrid hub.

Iberia: AG Slide Show

Iberia is facing new holiday strikes by its ground and cabin crews

http://airlinersgallery.smugmug.com/Airlines-Europe/Iberia-Lineas-Aereas-de-Espana/i-w2VwfL4/0/S/Iberia%20A320-200%20EC-HDK%20%2877%29%28Tko%29%20GVA%20%28PDN%29%2846%29-S.jpg

Iberia (Madrid) is facing a new round of strikes by its ground and cabin crews. The unions have called for a full-day strike on December 14 and the five days of walkouts from December 17 to December 21 during the Christmas rush. Spain is becoming a country of strikes. The unions are protesting the jobs cuts. The losses at Iberia are bleeding IAG.

Read the full story from Reuters: CLICK HERE

Copyright Photo: Paul Denton. Iberia is not soaring these days but continuously navigating through its devastating labor relations. Airbus A320-214 EC-HDK (msn 1067) climbs away from Geneva.

Iberia: AG Slide Show

IAG to drastically downsize Iberia in order to return it to profitability

International Airlines Group-IAG (London), the holding company for both British Airways (London) and Iberia (Madrid) has announced drastic plans to downsize Iberia in order to return the airline to profitability. IAG has also announced it will proceed to acquire a controlling interest in lower-cost Vueling Airlines (Barcelona).

The following statement was issued today:

A comprehensive plan to save Iberia after record losses and return it to profitability was announced today by International Airlines Group (IAG). Iberia’s transformation plan will introduce permanent structural change across all areas of the business with the aim of stemming losses and returning the Spanish airline to profitability.

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”.
Copyright Photo: Paul Denton. Iberia will look drastically different in 2013 with many European routes like Madrid-Geneva being dropped or replaced by lower cost carriers. Iberia’s Airbus A319-111 EC-HGS (msn 1180) taxies at GVA.
Iberia: 

IAG plans personnel cuts at Iberia after a second quarter loss

International Airlines Group-IAG (London) (British Airways and Iberia) is planning to do a full review at Iberia next month after the Spanish unit forced the group into a second quarter loss.

Willie Walsh, IAG chief executive, made the following comments:

“We made an operating loss of €4 million in the quarter, including €50 million of bmi losses, before exceptional items. While our revenue performance was good, up 11.5 per cent, this was countered by an increased fuel bill of €314 million, a rise of 25.1 per cent.

“For the half year, we made an operating loss of €253 million, before exceptional items, with revenue up 9.8 per cent and fuel costs up 25.0 per cent.

“Our synergies programme continues apace and we remain on track to deliver our 2012 targets and €500 million annual benefits by 2015.

“While we have made specific investments for longer term commercial benefits such as the Olympic sponsorship and Master brand advertising at British Airways and the development of our Avios frequent flyer currency, we remain focused on stringent cost control across the Group.

“bmi restructuring costs accounted for most of the €38 million of exceptional items. These costs and the airline‟s losses are in line with our expectations. The integration of bmi mainline into British Airways is going well with completion due by the year end.

“There remains a stark difference in the performance of our subsidiaries. British Airways made an operating profit despite rising fuel prices while Iberia‟s losses deepened.

“Iberia‟s problems are deep and structural and the economic environment reinforces the need for permanent structural change. We are currently working on a restructuring plan for Iberia which we anticipate will be finalised by the end of September. This is likely to include short term downsizing, network reshaping to deliver higher unit revenues and a re-evaluation of all aspects of the business to deliver competitive costs and service to enable long-term profitable growth. Inevitably, we will not be able to avoid job losses as part of this process.

“There has been an excellent start made by Iberia‟s new cost effective subsidiary Iberia Express, which was profitable in its third full month of operation in June and has established an exemplary operating performance from Madrid Barajas.”

Trading outlook:

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 Iberia restructuring plan could lead to further restructuring costs in the latter part of the year.”

Copyright Photo: Rolf Wallner. Iberia’s Airbus A319-111 EC-JDL (msn 2365) taxies at Zurich.

Iberia: 

British Airways: 

Iberia starts nonstop Madrid-Accra flights

Iberia (Madrid) tomorrow (July 18) will launch twice-weekly Madrid-Accra service.

Copyright Photo: Rolf Wallner. Airbus A340-313X EC-ICF is pictured in action at Zurich.

Iberia: 

ALSA and Iberia team up for “Bus&Fly”

Spanish bus company ALSA and Iberia (Madrid) today are launching “Bus&Fly”, a service allowing travellers in several Spanish provinces to combine flights and coach travel to/from the airport on a single ticket.

Bus&Fly is Europe’s most advanced intermodal service of its kind, since it can be booked through the global reservations systems used by travel agencies around the world.

The first cities to be served by Bus&Fly are Albacete, Burgos, Lorca, Soria and Valladolid, from which some 66,000 passengers each year use Madrid airport for international flights. As of today the bus terminals on all five cites will have IATA codes, allowing travel agencies around the world to issue the new intermodal tickets, and giving greater international visibility and access to global markets to the cities themselves.

Each day ALSA will offer more than 40 coaches to/from the five cities and Iberia’s Terminal 4 hub in Madrid, where they can reach nearly 100 international Iberia destinations in Europe, the Americas, Africa and the Middle East. Iberia and Alsa have devised timetables to ensure relaxed connections, with ample time for passengers to check their luggage, complete security control procedures and board their flights. To streamline the process further, passengers may obtain their boarding cards on line fromwww.iberia.com and their luggage tags from airport check-in kiosks, and then drop their luggage at Iberia’s express counters number 810 and 811.

The launch of Bus&Fly is a new step contributing to intermodality –the use of different means of transport– at Madrid-Barajas airport, which translates into the more efficient use of the airport and of other passenger transport infra- structures, as well as easier access to the airport from the provinces.

About one-third of all passengers who use the airport are making connections to/from other Spanish cities and other cities elsewhere in Europe. Bus&Fly will strengthen the T4 as a hub for Iberia flights and passengers. There are plans to extend Bus&Fly service to other cities in Spain and in other countries in which both Iberia and Alsa operate.

ALSA is a part of the UK’s National Express group since 2005, is Spain’s leading long-distance coach line operator. The parent group supplies coach and rail travel to passengers in the UK, the US, Canada, Spain, and Morocco. In Spain it is the sole road transportation company to cover the entire county with scheduled coach services.  It also operates regional, commuter, and municipal bus services. It has a fleet of 2,459 vehicles and staff of 6,870 people. In 2011 it posted sales of 635.4 million euros, and carried 224.1 million passengers.

Copyright Photo: Rolf Wallner.

Iberia: 

IAG’s first quarter loss before taxes increases to $340 million

International Airlines Group (IAG) (IAG), the holding company of British Airways (London) and Iberia (Madrid) saw its first quarter loss before taxes increase to €263 million ($340.1 million) from €47 million loss a year ago.

The group issued the following report:

International Consolidated Airlines Group (IAG) today (May 11, 2012) presented Group consolidated results for the three months ended March 31, 2012. In addition, IAG presented combined results for the three months ended March 31, 2012, including Iberia’s first 21 days of January in the comparative period.

IAG period highlights on combined results:

·      First quarter operating loss of €249 million, before exceptional items (2011: €102 million loss)

·      Loss before tax for the quarter of €263 million (2011: €47 million loss)

·      Revenue for the quarter up 7.8 per cent to €3,919 million (2011: €3,636 million), including €40 million or 1.1 per cent of favourable currency impact

·      Passenger unit revenue for the quarter up 8.5 per cent (7.3 per cent at constant currency), on top of capacity increases of 0.6 per cent

·      Fuel costs for the quarter up 24.9 per cent to €1,409 million (2011: €1,128 million), fuel unit costs were up 24.0 per cent

·      Non-fuel costs before exceptional items for the quarter up 5.7 per cent at €2,759 million, including €32 million or 1.2 per cent of adverse currency impact. Non-fuel unit costs up 5.1 per cent, or 3.7 per cent at constant currency

·      Cash of €3,574 million at quarter end was down €161 million

·      Group net debt down €19 million in the quarter to €1,129 million

Performance summary:

   Combined

Three months to March 31  

Consolidated

Three months to March 31

Financial data € million (unaudited)  2012(1) 2011(1) Higher /

(lower)

 2012(2)  2011(2)
   (excludes 21 days Iberia pre-merger)
Passenger revenue 3,290 3,018 9.0 % 3,290 2,839
Total revenue 3,919 3,636 7.8 % 3,919 3,399
Operating loss before exceptional items (249) (102) 144 % (249) (65)
Exceptional items 37 - nm 37 -
Operating loss after exceptional items (212) (102) 108 % (212) (65)
Loss before tax (263) (47) 460 % (263) (8)
(Loss)/profit after tax (146) 33 (542)% (146) 60
Basic earnings per share (€ cents)    (8.2) 3.3
Operating figures   2012(1) 2011(1) Higher /

(lower)

     
        
Available seat kilometres (ASK million) 51,425 51,116 0.6 %      
Revenue passenger kilometres (RPK million) 39,140 37,767 3.6 %      
Seat factor (per cent) 76.1 73.9 2.2pts      
Passenger yield per RPK (€ cents) 8.41 7.99 5.3 %      
Passenger unit revenue per ASK (€ cents) 6.40 5.90 8.5 %      
Non-fuel unit costs per ASK (€ cents) 5.37 5.11 5.1 %      
€ million (unaudited) At March 31,

2012(2)

 At December 31, 2011(1) Higher /

(lower)

     
        
Cash and interest bearing deposits 3,574 3,735 (4.3)%      
Net debt 1,129 1,148 (1.7)%      
Equity 5,739 5,686 0.9 %      
Adjusted gearing(3) 43% 44% (1pt)      

(1)    This financial data is based on the combined results of operations of British Airways Plc (‘BA’), Iberia Líneas Aéreas de España S.A. (‘Iberia’) and IAG the Company for the three month period ended March 31, 2012 and 2011. These combined financial statements eliminate cross holdings and related party transactions. Financial ratios are before exceptional items.

(2)    The IAG March 31, 2012 Income statement is the consolidated results of BA, Iberia and IAG the Company for the three month period ended March 31, 2012. The IAG March 31, 2011 comparative is the consolidated results of BA and IAG the Company for the three month period ended March 31, 2011 and Iberia from January 22, 2011 to March 31, 2011.

(3)    Adjusted gearing is net debt plus capitalised operating aircraft lease costs, divided by net debt plus capitalised operating aircraft lease costs and equity.

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Top Copyright Photo: Antony J. Best.

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Bottom Copyright Photo: Dave Campbell.

Iberia to cut striking pilot salaries and benefits

Iberia (Madrid) wants to cut the salaries of its pilots and reduce the perks while increasing the hours flown for its pilots. By doing so, the embattled flag carriers hopes to trim 20 percent on its total costs for its pilots and boost productivity by 25 percent according to this report by Reuters.

Read the full report: CLICK HERE

Meanwhile the IB pilots continue to strike the flag carrier over the introduction of lower-cost Iberia Express.

Who will win this battle?

Copyright Photo: Pepscl.

Iberia Slide Show: CLICK HERE

Iberia issues a statement about the legality of Iberia Express and the on-going pilot strikes by SEPLA

Iberia (Madrid) today (April 16) issued the following statement concerning the SEPLA pilots union’s call for another 30 days of strikes and the latest remarks by the SEPLA representative:

  • The Legality of Iberia Express, a Success Story with Good Prospects

Iberia Express was founded on October 6, 2011, and it complies with all Iberia’s agreements and union contracts, so it is strictly legal.

Iberia Express is a company 100% owned by the Iberia group, specialising in short- and medium-haul flights, both point-to-point and to feed traffic to Iberia’s long-haul network in a profitable manner.

Iberia Express began operations on March 25, using four Airbus A320s to serve four domestic destinations, to be expanded by the end of this year to 14 aircraft and 20 destinations, including some that are entirely new for Iberia, such as Riga and Mikonos. It offers both business and tourist class, and the same services as other Iberia flights, at competitive fares.
In a country with 5 million unemployed, the new airline will create some 500 jobs this year, a number which will double when the company reaches full capacity.
Iberia Express is a success story from the very beginning, with a punctuality rating close to 100%. Its business approach, ability to adapt to the current situation and its quality guarantee Iberia Express a bright future, as bright as the other airlines where Iberia holds a stake.
  • A Short- and Medium-haul Segment with a Future and Employment Guarantees
The traditional business model for short- and medium-haul routes is no longer viable, as the closing of several carriers attests, due to competition from low-cost airlines and other forms of transportation, as well as a structural shift in the priorities of the customers in these markets. At the same time, Iberia relies on having a broad range of such routes since they provide 70% of its traffic on the long-haul routes which are profitable and on which the company is focusing its future growth strategy.
Iberia negotiated and reached agreements with ground staff and cabin crews over a number of measures to contain costs and raise productivity, aimed at restoring profitability to these routes. However, despite a total of more than 60 meetings over a two-year period, it proved impossible to reach a similar agreement with pilots, which led Iberia to launch the new Iberia Express airline as the best alternative for making short- and medium-haul routes viable, while feeding traffic to the company’s long-haul network.
The airline has made formal employment guarantee commitments to the ground and cabin staff unions representing 93% of total company personnel, with assurances that the creation of Iberia Express does not threaten existing jobs.
  • Iberia Pilots’ Productivity
The productivity of Iberia pilots is the lowest in Spain. They fly an average of 650 hours per year, as compared with the 900 the law permits, the more than 800 flown by pilots of other short-haul airlines with which Iberia competes. The collective bargaining agreement with Iberia specifies a limit of 820 hours per year in short-haul fleets and 850 in long-haul fleets, limits which are never reached because of the large number of conditions and restrictions.
In addition, in long-haul flights many of these hours are worked by extra crew members who travel as reinforcement staff, in excess of legal requisites and the practices of other airlines.
Under the proposal made by the SEPLA union, the pilots hired by Iberia Express would enter the ranks of all Iberia pilots and come under the same collective bargaining agreement, with the same conditions and restrictions, which means that their productivity would be exactly the same as that of other Iberia pilots. Without eliminating these conditions and restrictions, it would be impossible to increase productivity to a level near that of competing airlines. In addition, the pilots union proposal for payroll cuts was strictly temporary, and would have been diluted over time and fail to solve any of Iberia’s competitiveness issues.
  • The Strikes
SEPLA has called a total of 26 strikes against Iberia in the past 30 years, which is probably a record number of strikes ever endured by any company in such a period. In the past five months SEPLA has called 66 strike days to protest the creation of Iberia Express; it initially cancelled 24 of them when the government proposed mediation by Manuel Pimentel, but called again another 30 strikes, up until July 20.
Each of the first 12 strike days in the past few months brought losses to the airline of around 3 million euros, or a total of 36 million. We have to add on top of this the other 30 new strike days, with their concomitant losses to the company.
  • Mediation
Last November, long before the intervention of the mediator proposed by the government, Iberia had already offered SEPLA representatives the opportunity to choose a neutral person to preside over the bargaining table in order to facilitate negotiations, but this proposal was rejected by SEPLA. For this role the company had suggested Esteban Rodríguez Vera, who has held numerous positions in the Ministry of Labour, including those of Director General and General Technical Secretary, and also Carolina Martínez Moreno, professor of labour law at the University of Oviedo, and chairperson of the National Consultative Committee on Collective Bargaining.
The airline worked openly and in the best of faith with the mediator named by the government, Manuel Pimentel, with the aim of reaching an agreement to call off a conflict that is so damaging to customers, to the company, and to Spain’s tourism sector and economy as a whole.
Iberia was prepared to consider the proposal made by the mediator, but it was rejected out of hand by the SEPLA pilot’s union, so could not even be discussed.
  • Iberia’s Spanishness
Iberia is not the property of the SEPLA union, but belongs to shareholders around the world, who risk their money, vote on company strategy (including the creation of Iberia Express), appoint top management, and keep watch on the company through the board.
The company’s headquarters, its operational base, and the lion’s share of its business, are all in Spain, and this is the greatest guarantee of its Spanishness.
Sixty-six strike days are not the best way to attract serious investors to the company or the capital required to ensure survival and future growth, but, on the contrary, they drive investors and customers away, and constitute an irresponsible action by the SEPLA union that poses the greatest risk to Iberia’s future.
  • The T4 Hub
Terminal 4 at Madrid-Barajas airport does not belong to the SEPLA union, nor to Iberia, nor to British Airways, nor to any of the many other airlines that use it. It belongs to the state agency AENA, hence to the country as a whole, and it is open to airlines that pay fees for its use.
Iberia is the largest user of this terminal, so its pays the most to AENA. Iberia group airlines operate more than 600 daily flights from/to Madrid, as compared to 10 operated by British Airways, which has actually reduced the number of its Madrid flights since the merger.
  • IAG
IAG, the holding company to which both Iberia and British Airways now belong, is a Spanish company with corporate domicile in Madrid and operational HQ in London. The chairman is a Spaniard, Iberia chairman Antonio Vázquez, and its largest shareholder is the Spanish bank Caja Madrid (now Bankia).
The IAG board has 14 members, seven chosen by Iberia and seven by British Airways, and it supervises both companies.
IAG’s primary concern is for both airlines to be profitable, and to create value for shareholders, employees, and customers. But the two airlines maintain their separate identities and brands, along with autonomy of management, with each one obliged to solve its problems using its own means and resources. Each airline has to finance investment with its own funds. Each airline has its plans and must manage them with its own resources, solving problems with its own means. The motive of the merger was to create synergies, i.e. to save on costs thanks to a larger volume of purchases, and to share certain resources and increase revenues thanks to a larger network.
Iberia believes it necessary to state the foregoing to further the understanding of the current situation by its customers and the public at large.
The company will continue to use all means at its disposal to assist customers affected by the strikes, and to assure the future of Iberia and of its more than 20,000 employees.
Iberia appeals its pilots to stop the strike and work to make Iberia one of the most competitive airlines, which will benefit them and the company as a whole.
Copyright Photo: Javier Rodriguez.
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Iberia hit by a general strike in Spain today, pilots call for 30 days of strikes from April through July to protest Iberia Express

Iberia (Madrid) is dealing with a general strike in Spain today. According to the airline, “As a result of the general strike in Spain on March 29, and which also affects air traffic, more than four hundred of Iberia Group flights have been cancelled.”

List of cancelled Iberia flights: CLICK HERE

In other bad news for the company, the IB pilots, still angry over the launch this week of Iberia Express while everyone was in mediation over the issue, have announced 30 additional days of strikes in the April through July period. The company slammed the latest announcement of strikes as “irresponsible”, as well as “unjustified, damaging and disproportionate”.

Read the full account from Reuters: CLICK HERE

Copyright Photo: Javier Rodriguez.

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Iberia announces the first Iberia Express routes

Iberia Express (Madrid) will commence operations on March 25 with four Airbus A320s from its parent. The initial routes will be between Madrid and Palma de Majorca, Alicante, Malaga, and Seville.

A total of 17 destinations will be served during the summer season, including Vigo, Santiago de Compostela, Granada, Minorca, Ibiza, Fuerteventura, Lanzarote, and La Palma in Spain, and also Dublin, Naples, Mikonos, Riga and Amsterdam. The new airline, wholly-owned by Iberia, made its debut in Madrid today at a press conference hosted by the Iberia CEO Rafael Sánchez-Lozano and Iberia Express CEO Luis Gallego. According to Iberia, “the new Iberia unit is designed to restore profitability to short- and medium-haul routes, operating initially with four A320s on domestic and European routes. By the end of the year the company is expected to have fourteen A320s and a staff of some 500 people. The new company will strengthen the Iberia group’s Madrid-Barajas hub and contribute to the growth of its long-haul business.” The various Iberia unions have opposed the launch of Iberia Express.

IAG is pressing ahead with Iberia Express

Iberia Express (Madrid) will launch low-fare operations on March 25 despite previous protests and strikes from Iberia’s unions who have now called off their strikes due to mediation. Iberia and the International Airline Group (IAG) are moving ahead with the launch while the issue is in mediation.

On its launch, Iberia Express will become an affiliated member of oneworld. Iberia has been a member since 1999.

Iberia Express is a wholly-owned subsidiary of Iberia and will operate the short- and medium-haul flights currently handled by Iberia, plus some new routes. Iberia Express will cover point-to-point traffic and serve as a feeder for Iberia’s long-haul flights to/from its Madrid hub. The new airline will offer both economy and business class seats, initially in four Airbus A320s, but this number will rise to 13 aircraft by the end of the year. All the aircraft will be transferred from the current Iberia fleet. As previously reported, the pilots and cabin crews called off their planned 24 days of strikes from March through June to protest the launch after the Spanish government entered the dispute with promises of mediation. However it appears Iberia is getting what it wants – a new lower salaried option for its European routes.

Iberia’s pilots and cabin staff agree to cancel their 24 days of strikes

Iberia’s (Madrid) pilots and cabin crew staff have agreed to cancel their planned 24 days of strikes between now and June after the Spanish government intervened and decided to appoint a mediator to help resolve the issues fueling the strikes. The unions are protesting the launch of low-wages Iberia Express on March 25.

Read the full report from the WSJ: CLICK HERE

Copyright Photo: Rolf Wallner.

Iberia Slide Show: CLICK HERE

Iberia’s pilots plan 24 more days of strikes

Iberia’s (Madrid) pilots are planning to conduct 24 additional days of strikes in protest to the formation of low-cost Iberia Express.

Read the full report from AFP: CLICK HERE

Copyright Photo: Paul Denton.

Iberia Slide Show: CLICK HERE

British Airways-Iberia operating profit doubles in the first year together

International Airlines Group (IAG) (British Airways and Iberia) (London) reported it had an operating profit of $653 million in 2011.

Here is the full report from the group:

IAG period highlights on combined results:

·      Fourth quarter operating profit of €34 million, before exceptional items (2010: €6 million)

·      Operating profit for the year to December 31, 2011 of €485 million, before exceptional items (2010: €225 million)

·      Profit before tax for the year of €503 million after exceptional items (2010: €84 million)

·      Revenue for the year up 10.4 per cent to €16,339 million (2010: €14,798 million), including €317 million or 2.1 per cent of adverse currency impact

·      Passenger unit revenue for the year up 3.6 per cent (5.8 per cent at constant currency), on top of capacity increases of 7.1 per cent

·      Fuel costs for the year up 29.7 per cent to €5,068 million, before exceptional items (2010: €3,907 million), fuel unit costs were up 21.4 per cent

·      Other operating costs up 1.1 per cent at €10,786 million, before exceptional items, including €165 million or 1.5 per cent of favourable currency impact. Non-fuel unit costs down 5.6 per cent, or 4.1 per cent at constant currency

·      Cash down €617 million for the year to €3,735 million

·      Group net debt up €253 million in the year to €1,148 million

In other news, British Airways has announced it intends to introduce the new Airbus A380 in early 2013 on routes to New York (JFK), Hong Kong, Beijing and Singapore.

Copyright Photo: Richard Vandervord.

British Airways Slide Show: CLICK HERE

Iberia adds more capacity in the wake of Spanair’s collapse, will also add new Africa service

Iberia (Madrid) has announced it is increasing its supply of flights and/or seats on several of the routes on which it had coincided with Spanair:

Madrid-Barcelona: Iberia has added three daily flights, which will be expanded to four in the summer season for a daily total of nearly 70.

Madrid-Bilbao: An increase in seat supply of up to 31% in the busiest months, with one extra daily flight and larger aircraft at peak travel times. For now Iberia will operate 11 daily return flights, from 0655. until 2145, with good connections to all other Iberia destinations.

Madrid-La Coruña: Up to 27% more seats starting in March, on three daily roundtrip flights, two of them using larger aircraft. The first flight departs at 0645 – and the last takes off at 2120, offering good connections to Iberia destinations in Europe, the Americas, Africa and the Middle East.

Madrid-Canary Islands: Flights to the main Canary Islands grow by 20%: Iberia has scheduled one additional flight on the Madrid-Gran Canaria and Madrid-Tenerife routes. As of March 25 it will increase capacity to the islands of Lanzarote and Fuerteventura.

Madrid-Balearic Islands: In the high summer season Iberia will operate up to five daily roundtrip flights to Palma de Majorca, two to Ibiza, and one to Minorca.

Madrid-Copenhagen: Iberia will use larger aircraft to increase seat supply on this route.

In addition the flag carrier is introducing twice-A321 service to Nouakchott via Las Palmas on April 26. Further African expansion will occur on June 1 when it starts twice-weekly A319 flights to Accra.

Copyright Photo: Stefan Sjogren. Please click on the photo for information about this special logojet.

Iberia Slide Show: CLICK HERE

American Airlines to expand the Miami hub with a new route to Barcelona

American Airlines (Dallas/Fort Worth), a member of the oneworld® alliance and trans-Atlantic joint business partner with Iberia (Madrid) and British Airways (London), will expand its operations at Miami International Airport (MIA) with the launch of Miami – Barcelona (BCN) service on April 3, 2012. The flight will operate five times a week until June 14 when it will operate daily.

As part of a joint business reorganization of flights, Iberia will increase its Miami to Madrid service as it grows its presence at Madrid’s Barajas Airport (MAD). Effective March 25 Iberia will add a second MIA-MAD flight four times per week. American will continue to operate one daily MIA-MAD flight.

According to the airline, “American’s new route connects its Miami hub to Barcelona’s El Prat International Airport. Barcelona is one of Europe’s top tourist destinations, as well as a city with a thriving business community. The new flight will complement American’s existing service from JFK in New York.”

Barcelona will be the 111th destination served by American and its regional carrier American Eagle from MIA. The flights will be operated with Boeing 767-300 aircraft with 225 seats including 30 Business Class seats and 195 seats in the Main Cabin. American’s Business Class is designed to give customers more comfort, flexibility and privacy. Fully-motorized lie-flat seats in a 2-2-2 configuration offer a personal inflight entertainment device with audio and video on demand, state-of-the-art cabin lighting and sleek, ergonomically-designed overhead bins, all enhancing the travel experience for the business customer.

Copyright Photo: Arnd Wolf.

American Slide Show: CLICK HERE

Iberia’s ground personnel join the pilots in regular strikes to block Iberia Express

Iberia (Madrid) is facing a more unified union front in their attempt to blok the launch of Iberia Express. Today all of the unions at Iberia have called for industrial action starting on February 3. This means IB will be facing a strike every Monday and Friday by ground personnel and the pilots. The cabin crews will vote on joining the pilot’s strike at a meeting on January 20.

Ground staff are now demanding job guarantees through 2015, plus a freeze on the launching of lower-wage Iberia Express, together with the dismantling of Iberia by IAG.

Copyright Photo: Ariel Shocron. Please click on the photo for information on this retrojet.

Iberia Slide Show: CLICK HERE

Iberia’s pilots call for three more days of strikes

Iberia’s (Madrid) pilots have announced three more days of strikes in January – specifically January 25, 27 and 30.

The company is still going ahead with the new lower-pay Iberia Express plans.

Airbus A320 EC-FGV is due to be the first aircraft to be painted in the Iberia Express colors. IB is also trying to acquire three Vueling A320s for the new operation.

Copyright Photo: Ariel Shocron. Please click on the photo for more information.

Iberia Slide Show: CLICK HERE

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