‘Severe' cost cuts announced
Iberia has announced "severe" cost cutting measures after suffering a €92.6m loss in the first quarter.
The plan will see €200m in savings through cuts in capacity, staff pay, purchases and external costs.
The Spanish airline group blamed a steep decline in demand but said business travel had been hit hardest.
Capacity cuts will be "selective and temporary", Iberia said, affecting those routes struggling the most from falling demand.
Iberia denied cuts would affect any strategic routes and would not signal a withdrawal from any market.
"The aim of all these measures is to adapt quickly to the current environment and to emerge strengthened, having protected the most important markets and the company's financial strength," Iberia said.
The "contingency plan" is expected to boost Iberia's pre-tax earnings by slashing expenses by €110-125m.
Five A320s will be grounded this month and deliveries postponed as part of the plans.
Iberia also said it would launch a review of planned investments, expected to put €80-90m in spending on hold.
Iberia said any investment "not related to improving customer services or having a direct impact on earnings" would be postponed including a new "crew signing" building at Madrid-Barajas.
A €7m plan to improve VIP lounges at the Madrid hub, and the renovation of long haul aircraft will go ahead.
The airline said areas of the company hit hardest by falling demand could see staff lay-offs following talks with trade unions.
Iberia hopes to make further savings through a hiring freeze, a pay rise review and a freeze on executive salaries.
Rented office space and other buildings and airport spaces will also be shed in efforts to reduce spending.
Iberia's earnings declined by 15.6% as demand from both international and domestic markets dropped.
"This was aggravated by a steep decline in business travel, and strong downward pressure on fares," the group said.
"Other extraordinary factors, such as the disruptions caused by the work-to-rule by pilots and severe snowstorms in January, also had a negative impact on the quarterly accounts."
Iberia said a 6.1% reduction in capacity had been outpaced by a 9.5% decline in demand, pushing load factor down 2.9% year-on-year.
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