Bloomberg News

Iberia Pilots Plan Christmas Strikes Over Low-Cost Unit

December 07, 2011

(Adds chairman’s comments starting in fourth paragraph.)

Dec. 7 (Bloomberg) -- Pilots at Iberia, the Spanish division of International Consolidated Airlines Group, plan to strike for two days during the Christmas holiday period in a dispute over work assignments as the carrier reorganizes.

Flight crews will stage walkouts on Dec. 18 and 29, said a spokeswoman for Iberia in Madrid, who declined to be named in line with company policy. No one answered repeated calls to the Sepla pilots union and the transport department of the Public Works Ministry in Madrid.

The pilots are protesting Iberia’s plans to create a lower- cost unit for short-haul flights. The Spanish company, which merged with British Airways at the beginning of this year to create London-based IAG, plans to transfer planes to the Iberia Express unit in 2012 to boost profitability of domestic and European services.

“Spain is one of the countries in Europe with the highest low-cost carriers penetration and the country is developing one of the most extensive high-speed train networks in the world,” IAG Chairman Antonio Vazquez said in a speech in London today. “This has made our short- and medium-haul business unprofitable, as we cannot compete with the costs and the operating model of the low-cost carriers.”

Existing employees’ pay and conditions won’t change, so the strike is illegal, Vazquez said. Iberia Express will start flying four aircraft next year that will come from the company’s existing fleet, he said. That will rise to 13 by the end of 2012 and 40 in 2015.

Iberia is waiting for the government to decide on the minimum level of services that pilots will have to provide, and is working on contingency plans including finding seats on other airlines for its customers, the carrier said in an e-mailed statement.

IAG fell 3.1 percent to 149.60 pence at 3:23 p.m. in London trading. The stock has declined 45 percent this year, valuing the company at 2.78 billion pounds ($4.36 billion).

--With assistance from Steven Rothwell in London, Editors: Tom Lavell, Robert Valpuesta.

To contact the reporters on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net; Sharon Smyth in Madrid at ssmyth2@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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