International Airlines Group Plans 3,800 Layoffs at Iberia

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By Martin Baccardax | February 12, 2013 11:35 PM EST

International Consolidated Airlines Group, the carrier formed in 2011 with the merger of British Airways and Iberia Airlines, will lay off around 3,800 staff at its loss-making division just days ahead of a strike that threatened to cripple traffic in and out of Spain.

"International Airlines Group announces that Iberia has today informed its employees, trade unions and the Spanish Employment Ministry that it has started the formal process of collective redundancy," IAG said in a statement published Tuesday on its website. "There will now be a 30 day consultation process."

IAG said it would being the process of collective redundancy for 3,807 Iberia staff as part of what it calls a "transformation plan" announced last November after the division posted an operating loss of €262m in the nine months ending in October. The plan called for a reduction in fleet capacity by 25 planes this year and a further 15 percent next year along with wage reductions and the suspension of unprofitable routes.

"Iberia continues to cause concern and we are announcing today a restructuring plan to introduce permanent structural change across the airline," CEO Willie Walsh said at the time of the plan's release. "Iberia is in a fight for survival and we will transform it to reduce its cost base so it can grow profitably in the future."

The six union groups representing Iberia's 20,000 staff had rejected a 31 January deadline to agree to the IAG plan and instead offered a counter-proposal that limited job cuts 3,147.

Reuters had reported last week that unions were preparing to hold intermittent strikes this month and next to protest the proposed job cuts.

IAG shares were trading around 0.22 percent higher in London following the announcement to change hands at 216.57 pence each. The shares have risen 28 percent since the group unveiled the plan for Iberia on 9 November.

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