IBERIA FOLLOWED its announcement of a much-improved financial performance for 1995, with the suggestion that it is now moving in the right direction for eventual privatisation.

The Spanish flag carrier managed to raise its operating profit to Ptas25 billion ($196 million), its best performance for seven years and more than four times higher than in 1994.

The improvement comes from a 0.6% cut in costs, backed by a relatively modest 3.8% rise in sales. Although passenger traffic was up strongly by 7.8% and seat factors reached 70%, the gains were offset by a 2.2% decline in yields.

Despite the encouraging operating performance, net losses grew to nearly Ptas45 billion, although Iberia says that the bulk of this stemmed from the Ptas32 billion provision to cover redundancies.

The carrier says that the outlook for 1996 is positive, with a three-year productivity deal agreed with the unions and signs of growth to Europe and the Americas. The state-owned airline suggests that it is in "an excellent position" to attract private investment.

Teneo, the holding company which runs most of Spain's major state-owned companies, including Iberia and CASA, has outlined plans for progressive privatisation sales as its subsidiaries become saleable. Early in May, the new Government confirmed that Teneo is top of Spain's privatisation list.

Source: Flight International