Investment in long-haul, Madrid T4 hub, and “Iberia Express” are pillars of Iberia’s strategic plan
Iberia Express is one of the pillars of Iberia’s strategy for coming years, to ensure the future and viability of the group, and the sole option available as an alternative to eliminating routes and cutting Iberia staff which would otherwise be necessary.
The investment in long-haul services –with the option of increasing the fleet to 45 aircraft in 2015 from today’s total of 35, and with completely redesigned cabins– and in upgrading our hub in T4 at Madrid-Barajas airport to rival the best in the world are the other two pillars in our 2012-2015 Business Plan, as recently announced to investors and shareholders.
Spain ranks second in the world in terms of the presence of low-cost airlines and high-speed trains, a circumstance which has occasioned a 17% decline in revenues in the past four years, aggravated by a 55% increase in fuel costs in the same period. This means that short- and medium-haul routes are operating at growing losses which the company can ill afford, and obliging it to take counter-measures. Only yesterday one of the world’s largest airlines took drastic steps to save itself from bankruptcy via tough measures to cut costs, including payroll costs.
The creation of Iberia is supported by the representatives of 90% of all Iberia employees with whom nearly a year ago the company signed new collective bargaining agreements and specific agreements about Iberia Express.
Iberia Express will commence operations in March, 2012, and will create 500 new jobs in the first year, of which 125 will be for pilots. More than 1,000 jobs are expected to be created in the course of the first few years, and this will have no negative impact on the terms of employment of existing Iberia employees, which are regulated by their own collective bargaining agreements.
The reorganization of the short- and medium-haul business will free funds for investment in long-haul services, with the corresponding increase in flight crew positions. Under current collective bargaining agreements, handling and maintenance tasks will be the responsibility of Iberia employees.
In order for Iberia to expand its long-haul business, which is a top priority of its Business Plan, it needs increasingly large and strong short- and medium-haul operations, and this requires the founding of a new company within the Iberia group with costs similar to those of its competitors in these market segments. Iberia Express is 100% owned by Iberia. Short- and medium-haul routes are vital to Iberia’s future, since 70% of our long-haul passengers, chiefly to and from the Americas, use Iberia connecting flights.
Attesting to Iberia’s commitment to the long-haul business is the incorporation of up to 16 new aircraft into our fleet starting in 2013, the complete remodeling of all passenger cabins, affecting both Business and Economy class sections to deliver the greatest possible roominess, comfort, individualized entertainment options, and service. This represents a major investment intended to strengthen Iberia’s position as market leader on routes between Europe and Latin America.
At the same time, Iberia is availing itself of Madrid’s strategic location to become progressively more important as a link between Europe and Africa. This year we launched new services to Rabat and Luanda, and increased seat supply to Equatorial Guinea. Next year we plan to operate flights to new destinations like Ghana, Mauritania, and Bata in Equatorial Guinea.
The development of the T4 hub in Madrid-Barajas, linking our domestic and medium-haul flight networks with long-haul flights, is the third pillar of our Business Plan. We will improve connections, reduce waiting times, and improve service and punctuality, to make T4 one of the world’s most important hubs. At the same time a new cargo terminal and a new office building are being erected at the T4 hub.
In sum, Iberia’s Business Plan, as announced to our investors and shareholders, constitutes in itself a denial of accusations that the company has a hidden agenda for the future.
Lastly, the company launches an appeal to the SEPLA union to consider our passengers, whose travel plans have so often been disrupted in the winter holiday season by similar actions in recent years. They should not have to bear the burden of a conflict which has no basis in reality, and at a time in which the company has not interrupted negotiations for a new collective bargaining agreement. Any disagreements between union and management should be addressed on the bargaining table, and any doubts about the legality of Iberia Express should be resolved by the courts.
