International Airlines Group, the owner of British Airways and Iberia, today swallowed a compromise deal to end mass strikes over huge job cuts and pay freezes at its Spanish airline.
IAG and Spanish unions agreed to bring in a government-appointed mediator to get over a deadlock as the firm tries to turn around a €1 billion (£871 million) loss last year.
The turmoil at Iberia, Europe’s third-biggest airline, has seen staff stage eight days of strikes in the past two months, waving red and yellow Spanish flags outside IAG offices in Madrid with signs such as “Get your dirty hands off Iberia” and “British go home.”
Now, however, IAG has accepted the mediator’s proposal to sack 3141 Iberia staff, rather than the 3807 that the airline had planned to axe, and hand out pay-offs worth 35 days per year worked, rather than 20 as initially planned.
“The board of IAG met today in an extraordinary session to analyse and assess the proposal issued by a mediator regarding Iberia,” the airlines group said last night. “As a result, the board has decided to accept the proposal.”
But unions, including the powerful Spanish pilots’ union Sepla, have not said yet whether they accept the deal. They are set to sit down to meetings with the mediator later today.
Strikes have forced Iberia to cancel hundreds of flights, costing the airline €3 million a day.
Union leaders had previously rejected an IAG offer to trim its initial plan for firing staff. However, the latest negotiations would also see Iberia reduce its 20% salary cuts for the airline’s remaining 16,000 workers to 15% reductions in salaries.
Willie Walsh, IAG’s chief executive, last month said it was “unfortunate that some people are still blind to the problems that exist at Iberia”, adding that its €351 million operating loss of 2012 “should convince anybody that the problem needs to be tackled”.
Spanish politicians have been increasingly critical of IAG’s moves, with José Manuel Soria, the industry minister last week saying: “We want to call attention to what is going on. From the moment there was a merger between British Airways and Iberia the number of routes for BA has increased and the number for Iberia has fallen. Earnings for BA have risen, and fallen for Iberia. It gives the impression that there has not really been a merger at all.”
