Iberia has made a major breakthrough in tackling its long-running labour issues by reaching a preliminary deal with pilot union SEPLA on productivity measures which could herald a return to growth for the Spanish carrier.
While the airline has been in dispute with various parts of its labour group as it seeks to restructure the business, it has had a particularly stormy relationship with SEPLA over cuts and the development of short-haul operation Iberia Express. The pilot union notably failed to join other unions last March in accepting mediator proposals which settled the dispute over cuts Iberia implemented to stem its heavy losses.
Those proposals covered the cutting of around 3,000 jobs as well as salary reductions – on top of which an additional 4% reduction was included, recoverable once a deal on productivity was reached. Iberia management has since been in talks with its unions over productivity improvements.
The preliminary deal with pilots covers what Iberia parent IAG calls “fundamental productivity improvements within Iberia”. Salaries will remain frozen until 2015 as outlined in the mediation agreement, after which they will be subject to Iberia’s profitability. The recoverable 4% salary reduction will be returned.
“This ground-breaking deal reduces the cost structure and provides the foundation for the airline to grow profitably,” says Iberia executive chairman Luis Gallego. “A strong and profitable Iberia can protect jobs in the long term and boost tourism, which is a key driver in Barajas and Spain’s economic recovery. Iberia is the natural airline choice for Latin America and this agreement will enable it to be a formidable competitor.
“This agreement also enables the growth of Iberia Express with a competitive cost base and provides promotion opportunities for current Iberia and Iberia Express first officers. Iberia Express will help make Iberia profitable and stronger, by providing short-haul feed, and will provide Spanish competition to low-cost carriers.”
IAG chief executive Willie Walsh adds. “Permanent structural change was the only way to save Iberia from slow decline. This agreement marks the beginning of its future.” IAG has consistently said that Iberia, which cut capacity sharply in 2013, could only return to growth once a deal on productivity with staff was reached.
The deal comes just days after a number of its cabin crew unions reached a provisional agreement on productivity measures.