Slump in business traffic hits airline
Iberia could incur its first annual loss in 13 years, executive chairman Fernando Conte warned today (June 3).
Mr Conte told shareholders that business traffic, which Iberia relies on heavily, had suffered an industry-wide decline of 20% year-on-year in the first quarter of 2009.
Important business routes between Madrid, London and Latin America have been badly hit as the economic downturn forces business travellers to opt for cheaper economy class seats or switch to rival low cost airlines.
"We are going through the worst global economic crisis we have ever seen," he said, "And our revenues and profits are being seriously affected," Mr Conte said.
Last month Iberia reported a €92.6m loss in the first quarter, blaming a steep decline in demand worst felt in its business segment.
The result prompted Iberia to announce a €200m cost saving programme to be realised through cuts in capacity, staff pay, purchases and other costs.
British Airways, currently in merger talks with Iberia, today said it faced "a fight for survival". BA has also suffered from a slump in premium traffic, with business and first class figures down 17.2% in May.
Mr Conte reportedly said today that BA's pension fund issue is an important factor in the proposed merger.