Carrier blames high fuel costs and falling demand
Iberia said its net profits for 2008 fell by 90% to €32m.
During the 12 months, the Spanish carrier told analysts yesterday (January 28) that passenger revenues fell by 2.5% to €4.2bn while operating revenues were down 1.3% to €5.5bn.
The airline said it had been hit by both high fuel costs and by falling demand which had not been offset by gains from improved efficiency.
Iberia's demand had been affected not only by the global economic downturn, but also by the opening of the new high speed rail service between Madrid and Barcelona, the country's two main business cities.
The airline said its load factor had dropped 4.5% to 71.3%, despite a substantial cut in domestic capacity.
The airline had expanded capacity on its long haul South American routes but load factors had also dropped on these in the last months of 2008.
Iberia said its formal figures would be released at the end of February.
Iberia is currently in merger talks with BA which issued a profit warning earlier this week predicting a £150m operating loss for the year.
But Willie Walsh, BA's ceo, last week cast doubt on the success of these talks by saying he would walk away from any deal which he did not like.
This included a proposed share ratio of the new company of 53-47 in his airline's favour.
But BA has been hit by a falling share price for the last months of 2008 as well as a deficit in its pension funds which is concerning the Spanish.
The market value of the Spanish carrier is now above that of BA.
Mr Walsh is expected to meet his Iberia counterpart, Fernando Conte in Madrid next week when the oneworld alliance, to which both carriers belong, celebrates its tenth anniversary.
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