IAG subsidiary Iberia commencing redundancy plans - 3,800 jobs affected

12th Feb 2013 12:46

FTSE 100-listed International Airlines Group's wholly-owned Spanish subsidiary Iberia has started the formal process of collective redundancy, with 3,807 jobs to be affected.The company, which is the third largest airline in Europe, reported that there would be a 30-day consultation process.IAG said it had informed its employees, trade unions and the Spanish Employment Ministry and said the intention was for Iberia to introduce permanent structural changes across the airline to stem its losses.The decision comes just 11 days after Union General de Trabajadores (UGT), the trade union representing members of staff at Spanish airline Iberia, rejected a final package of cuts aimed at bringing the ailing airline into a profitable position. In 2012, Iberia presented the union with a proposal for cutting up to 4,500 jobs and reducing pay for some staff by between 25 and 30%. On February 1st, it proposed a slimmed down cuts package with up to 3,147 jobs targeted to go and pay to be slashed by 11% for ground staff and 23% for cabin crew. This was the last proposal the union rejected.In the six months to June 30th 2012, Iberia made an operating loss of €263m, working out at approximately €1.0m in operating losses per day. In IAG's half-yearly results for the six months to June 30th, Willie Walsh, IAG Chief Executive Officer, commented: "There remains a stark difference in the performance of our subsidiaries. British Airways made an operating profit despite rising fuel process while Iberia's losses deepened." "Iberia's problems are deep and structural and the economic environment reinforces the need for permanent structural change," he added at the time. The company's share price was up 0.19% to 216.50p at 13:02 on Tuesday.MF