Bloomberg News

IAG’s Iberia Faces Pre-Christmas Strike as Unions Fight Job Cuts

November 27, 2012

Spanish airline Iberia faces a six- day strike in the run up to Christmas as part of a protest against job cuts ordered by parent International Consolidated Airlines Group SA (IAG), the country’s two largest unions said today.

The walkout by cabin crew and ground staff who are members of the Comisiones Obreras and Union General de Trabajadores labor groups could ground flights on Dec. 14 and then from Dec. 17 through Dec. 21, an official from the UGT said. The strike is likely to be formally declared on Nov. 29 in Madrid.

IAG plans to shrink Iberia’s fleet and scrap 4,500 jobs, more than one-fifth of the total, as Europe’s third-biggest airline seeks to stem losses that have wiped out earnings from its British Airways brand. Unions say the plan amounts to the dismantling of the unit, which is struggling to compete with low-cost airlines amid Spain’s five-year economic slump.

Spanish unions are stepping up pressure on companies and the government and staged a second general strike in less than a year this month. The campaigners reject changes to labor rules that make it easier and cheaper to fire workers at struggling companies, combined with the deepest spending cuts on record.

IAG traded 0.4 percent lower at 169.70 pence as of 1:14 p.m. in London, where it’s based. The stock has added 15 percent this year as Chief Executive Officer Willie Walsh follows Air France-KLM Group (AF) and Deutsche Lufthansa AG (LHA) in cutting jobs.

Turnaround Plan

Walsh, who has led IAG since its formation from an Anglo- Spanish merger in 2011, is seeking a 600 million-euro ($778 million) turnaround in earnings by 2015 at Iberia, which lost 262 million euros in the first nine months. He is cutting posts two years after riding out a strike by cabin-crew at British Airways to push through lower pay for new recruits.

IAG has also made a bid for shares it doesn’t yet own of Spanish discount carrier Vueling Airlines SA (VLG), following the creation of its own lower-cost unit, Iberia Express.

Iberia pilots, represented by the Sepla union, aren’t supporting the December strike since they’re bound by terms of an arbitration ruling on a dispute over Iberia Express, according to a spokeswoman for the labor group.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net; Craig Stirling at cstirling1@bloomberg.net


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