Iberia bets on BA merger as it reveals record losses

SPANISH airline Iberia posted a record operating loss yesterday, hit by declining air travel and underscoring challenges facing the industry as the airline seeks shelter in a merger with British Airways.

“This market has changed for good. Traditional airlines as we know them will disappear, but we’re not crying here,” Iberia chairman Antonio Vazquez said.

Airlines’ passenger numbers and yields have plummeted as leisure and business travellers scale back spending in a global slowdown that has been particularly brutal in Spain.

The rise of low-cost competition and high-speed rail networks also hit Iberia in what is likely to be its last full year as Spain’s national flag carrier.

Iberia’s 2009 loss before interest and taxes widened to €464m (£412.1m), deeper than forecasts for €335m, as strict cost controls failed to shield the airline from declining yields.