Iberia’s losses swell to 351 million euros in 2012

Iberia’s losses last year widened to 351 million euros from 98 billion a year earlier, pulling the holding company for the Spanish carrier and its partner British Airways, International Airlines Group (IAG), into the red.

IAG plans to cut 3,801 jobs at Iberia, some 19 percent of its workforce, to return Iberia to profitability. Cabin crew and ground staff held a five-day strike earlier this month to protest the cuts and plan further stoppages in March. The restructuring plan also includes a cut in Iberia’s capacity in 2013 of 15 percent and lower wages.

“We have embarked on a significant transformation program in Iberia, and these results emphasize further that the airline must adapt to survive,” IAG’s chief executive, Willie Walsh, said. “It must stem its cash losses and adjust its cost base permanently if it is to compete with other airlines in all its strategic markets and lay the foundations for profitable growth in the future.”

IAG booked a loss of 943 million euros last year, compared with a profit of 562 million a year earlier. Without one-off items, IAG said its one-off loss last year was 23 million euros. BA booked a net profit of 347 million euros. IAG said the merger generated synergies of 313 million euros last year, compared with a target of 225 million.

IAG’s passenger revenues increased by 12.4 percent to 15.372 billion euros, while fuel costs were up 20.4 percent.

Iberia labor representatives have argued that the merger deal with BA was skewed in favor of the British airline.