British Airways owner hit by Iberia struggle

BRITISH AIRWAYS owner International Airlines Group said yesterday it would press ahead with slashing 3,800 jobs as part of its restructure of struggling Spanish unit Iberia after the group posted a full-year operating loss.

IAG, Europe’s fourth-biggest airline group by market value and owner of British Airways, reported a 2012 operating loss of €613m (£528m), including restructuring costs at Iberia, compared to the €444m profit it posted a year earlier.

The results were hit by a €6.1bn fuel bill, 20.4 per cent higher than in 2011, and a €351m operating loss at Iberia.

Iberia, Europe’s biggest carrier to Latin America, has been battling competition from low-cost airlines and high-speed trains, labour disputes and Spain’s deep economic crisis and bleeding cash as revenue fails to cover high operating costs.

IAG said it would move on with plans to cut jobs at Iberia as part of a restructuring plan to return the loss-making airline to growth. IAG also plans to cut capacity by 15 per cent this year, mainly at Iberia, by focusing on profitable routes and reducing its fleet by 25 aircraft.

BA, meanwhile, delivered an operating profit of €347m, boosted by growth in business and first-class traffic, especially on transatlantic routes.

“British Airways is seeing the benefit of permanent structural change and Iberia needs to adapt to survive,” chief executive Willie Walsh said.