IAG hikes Vueling bid as Iberia chief leaves

IAG yesterday stepped up efforts to fix its beleaguered Spanish business, announcing the departure of Iberia’s chief executive and increasing its bid for budget carrier Vueling by almost a third.

IAG, which also owns British Airways, said Iberia chief executive Rafael Sanchez-Lozano is stepping down immediately “by mutual agreement”, following months of strikes and stubborn losses at the airline.

Sanchez-Lozano, who had led the airline since 2009, will be replaced by Luis Gallego, boss of budget carrier Iberia Express, a major source of tension with Iberia workers.

IAG also revealed that it had hiked its offer for Barcelona-based Vueling from €7 (£5.90) to €9.25 a share. The airline already holds a 45.85 per cent stake, but Vueling rejected its previous offer earlier this month.

Acquiring Vueling would help IAG boost its short-haul business and halt losses in Spain in the face of tough competition from cheaper operators and a deep economic crisis.

London-listed shares in IAG closed 2.27 per cent lower at 250.1p yesterday.

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