Iberia may withdraw flights to the Canaries

14.11.2009 - Facing what a spokes­person called the, “most dramatic situation in the his­tory of the airline industry,” the company are embarking on a belt tightening exercise, but have no plans for major cuts in staff.  This reduc­tion in costs is set to save an expected 20 per cent of jobs and 37 million euros per year in addition to the 200 million already reduced under an earlier plan. The majority of jobs may be safe but salaries are frozen for, “the whole company” for the next two years, the emergency employment plan to shed 200 handling jobs will go ahead and all cabin crew over 55 will face early retirement.

Iberia also plans a new airline for short and medium flights to enhance their cur­rent long haul offer.  The new company is expected to be in operation by 2011.  On the other hand, long haul flights will be increased and promoted more aggressively with special attention to businesses, ethnic groups and tour operators, with ur­gent measures being taken to improve the service.

Iberia pull-out fears

The recent news, reported above, that Spain’s biggest airline Iberia is to create a separate company to cover short and medium-haul routes to al­low it to concentrate on its Latin America business has triggered fears that it may withdraw flights to the Canaries.

Airline sources say the growing competition from Spanair, Air Europa and low-cost carriers, including Ryanair, which is now operating to the Canaries from the mainland, could force Iberia to pull out at least partially and downsize its domestic operations via the new airline. The fall in profits (18 per cent in the first quarter of 2009) has prompted Iberia to implement extensive cost-cutting measures and it is now expected to concentrate on the lucrative busi­ness sector to increase the return on flights.



This article appears in the print edition 603 of Island Connections

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