IAG Makes Vueling Offer and Releases Iberia Restructure Plans

International Consolidated Airlines Group SA (IAG), owner of British Airways and Iberia, has offered to buy the 54.15% stake it does not already own in Spanish airline Vueling for €113 million (US$144m).
Reports believe that IAG’s move may want to use the low-cost airline to help solve problems with Iberia, which today (November 9) released its ‘Transformation Plan’.
The plan, which will “save Iberia after record losses and return it to profitability”, includes the reduction of 4,500 jobs at the carrier.  In 2013, IAG also plans to cut its network capacity by 15% and downsize its fleet by five long-haul aircraft and 20 short-haul.
A deadline to reach agreement with unions has been set for January 31, 2013.
The carrier’s Chief Executive Rafael Sánchez-Lozano commented:  “Iberia is in a fight for survival.  It is unprofitable in all markets.  We have to take tough decisions now to save the company and return it to profitability.  Unless we take radical action to introduce permanent structural change, the future for the airline is bleak.  However, this plan gives us the platform to turn the business around and grow.”
Contrastly, Vueling has prospered since the closure of Spanair in January this year, and has grown to become Spain’s second largest carrier by passenger numbers.  Earlier this week, Vueling posted a nine-month net profit of €50 million ($63.7m).
(Image:  Iberia)