BA merger partner Iberia posts third-quarter loss
November 13, 2009
Spanish carrier Iberia, which plans to merge with British Airways, posted third-quarter losses of 16.4 million euros (R182 million) on Friday, a sharp turnaround from last year amid falling demand due to the economic crisis.
In the third quarter of 2008, Iberia posted profits of 30.4 million euros.
The airline said the sector in Spain was facing "exceptionally difficult circumstances" amid the global recession and growing competition from high-speed rail services.
However, it noted a "trend reversal" with a slight recovery in air traffic spurred by lower ticket prices.
The passenger load factor for the third quarter was 82.1 percent, down 1.1 percent year-on-year, but for the month of October it was up 1.3 percent at 80.6 percent.
Over the first nine months of the year the airline reported a loss of 181.9 million euros, compared to a profit of 51.1 million a year earlier.
Iberia had plunged into the red in the second quarter of 2009, recording a net loss of 72.8 million euros.
The latest results came a day after Iberia and British Airways announced a preliminary agreement on a seven-billion-dollar merger to create one of Europe's biggest airlines, ending months of negotiations.
The new airline would have 419 aircraft and fly to 205 destinations, after a merger aimed at better competing in the industry hit hard by the economic crisis, they said in a joint statement.
It said British Airways will hold 55 percent of the new company, while Iberia will hold 45 percent.
The merger would save 400 million euros a year.
Iberia last month announced it will create a new carrier to handle short- and medium-haul routes as part of a restructuring plan to counter declining revenues.
The plan also involves a hiring freeze, a company-wide wage freeze in 2010 and 2011, lay-offs of all cabin attendants older than 55 and additional savings of up to 37 million euros a year in overhead costs in 2011 and 2012.
Iberia shares, which leapt 10 percent Thursday on the BA merger announcement, were up 2.25 percent on the Madrid stock market at 2.27 euros in light trading early Friday. - AFP
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