Julia Hayley/MADRID

Iberia's plan for restructuring loss-making Venezuelan airline Viasa, which includes cuts to jobs and routes, has been approved by the other major shareholders, but must now be cleared by the employees by 15 January.

Iberia put forward the plan in a bid to recover some of the investment it has made since buying a 45% stake in Viasa I.

The Spanish national carrier paid an initial $73.5 million for the stake, but had to inject another $44 million to cover losses in the first two years after privatisation. Viasa's losses have totalled $220 million over the past six years, with Iberia having seen a zero return on its investment.

The restructuring plan outlines the loss of 380 jobs from Viasa's 2,200 employees (including 94 pilots), as well as the imposition of a pay freeze and a 30%reduction in aircrew allowances. The aim is to see Viasa swing back to a $14 million profit in 1997 from a loss of around $18 million this year.

The airline's main Venezuelan shareholder, the Fondo investment group, has agreed to provide $21 million towards the restructuring costs, while Iberia has agreed to write off a similar amount from the $140 million it is owed by Viasa, and to reduce annual interest payments on the remainder.

Source: Flight International