Iberia insists January deadline a must for cuts

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Iberia will move ahead with its restructuring plan by the end of January even if there is no agreement with unions as implementing the major cuts in time for the summer season is central to hitting its target of being cash-positive by mid-2013.

Parent company International Airlines Group today detailed plans to cut capacity by 15% at the Spanish carrier next summer, taking 25 aircraft out of the fleet and cutting 4,500 jobs.

"We want to implement this fully for the summer season. We plan to be operating cash positive by mid-next year," said Iberia chief executive Rafael Sánchez-Lozano on a conference call on 9 November.

"There are two main goals. The first is to stop the cash bleeding, We cannot go on like this. We need to stop it quickly. There have been losses of around €900 million over the last four years. That is a lot of money and cannot go on.

"It is already starting today," he says, pointing to briefings with unions taking place on the restructuring plans. The airline has set unions a 31 January deadline to reach agreement, but will press ahead without accord if necessary.

"It is clear we have to go through a very deep restructuring exercise. That is not good news for anyone, but it is absolutely necessary to make it viable," Sánchez-Lozano says. "Today we can fund the plan. If we wait, we won't be able to do it. That is why we have a time pressure,

"We all win by an agreed solution," he adds, but stresses the end of January is a "must" for the airline. "We need the two months before the start of the summer season. If there is no agreement, we will have to move to a non-agreed scenario," he says, noting this it would involve deeper cuts and heavier restructuring.

While the immediate priority is on cutting costs at the Iberia, he maintains the plan is also about growth. "It is not just about surviving. We want to be a leading group in IAG. The only we can grow is to make our cost base competitive," he says.