Statement issued by the airline in relation to the SEPLA pilots union’s
The Legality of Iberia Express, a Success Story with Good Prospects
Iberia Express was founded on October 6, 2011, and it complies with all Iberia’s agreements and union contracts, so it is strictly legal.
Iberia Express is a company 100% owned by the Iberia group, specialising in short- and medium-haul flights, both point-to-point and to feed traffic to Iberia’s long-haul network in a profitable manner.
Iberia Express began operations on March 25, using four Airbus A320s to serve four domestic destinations, to be expanded by the end of this year to 14 aircraftand 20 destinations, including some that are entirely new for Iberia, such as Riga and Mikonos. It offers both business and tourist class, and the same services as other Iberia flights, at competitive fares.
In a country with 5 million unemployed, the new airline will create some 500 jobs this year, a number which will double when the company reaches full capacity.
Iberia Express is a success story from the very beginning, with a punctuality rating close to 100%. Its business approach, ability to adapt to the current situation and its quality guarantee Iberia Express a bright future, as bright as the other airlines where Iberia holds a stake.
A Short- and Medium-haul Segment with a Future and Employment Guarantees
The traditional business model for short- and medium-haul routes is no longer viable, as the closing of several carriers attests, due to competition from low-cost airlines and other forms of transportation, as well as a structural shift in the priorities of the customers in these markets. At the same time, Iberia relies on having a broad range of such routes since they provide 70% of its traffic on the long-haul routes which are profitable and on which the company is focusing its future growth strategy.
Iberia negotiated and reached agreements with ground staff and cabin crews over a number of measures to contain costs and raise productivity, aimed at restoring profitability to these routes. However, despite a total of more than 60 meetings over a two-year period, it proved impossible to reach a similar agreement with pilots, which led Iberia to launch the new Iberia Express airline as the best alternative for making short- and medium-haul routes viable, while feeding traffic to the company’s long-haul network.
The airline has made formal employment guarantee commitments to the ground and cabin staff unions representing 93% of total company personnel, with assurances that the creation of Iberia Express does not threaten existing jobs.
Iberia Pilots’ Productivity
The productivity of Iberia pilots is the lowest in Spain. They fly an average of 650 hours per year, as compared with the 900 the law permits, the more than 800 flown by pilots of other short-haul airlines with which Iberia competes. The collective bargaining agreement with Iberia specifies a limit of 820 hours per year in short-haul fleets and 850 in long-haul fleets, limits which are never reached because of the large number of conditions and restrictions.
In addition, in long-haul flights many of these hours are worked by extra crew members who travel as reinforcement staff, in excess of legal requisites and the practices of other airlines. Under the proposal made by the SEPLA union, the pilots hired by Iberia Express would enter the ranks of all Iberia pilots and come under the same collective bargaining agreement, with the same conditions and restrictions, which means that their productivity would be exactly the same as that of other Iberia pilots. Without eliminating these conditions and restrictions, it would be impossible to increase productivity to a level near that of competing airlines. In addition, the pilots union proposal for payroll cuts was strictly temporary, and would have been diluted over time and fail to solve any of Iberia’s competitiveness issues.
The Strikes
SEPLA has called a total of 26 strikes against Iberia in the past 30 years, which is probably a record number of strikes ever endured by any company in such a period. In the past five months SEPLA has called 66 strike days to protest the creation of Iberia Express; it initially cancelled 24 of them when the government proposed mediation by Manuel Pimentel, but called again another 30 strikes, up until July 20.
Each of the first 12 strike days in the past few months brought losses to the airline of around 3 million euros, or a total of 36 million. We have to add on top of this the other 30 new strike days, with their concomitant losses to the company.
Mediation
Last November, long before the intervention of the mediator proposed by the government, Iberia had already offered SEPLA representatives the opportunity to choose a neutral person to preside over the bargaining table in order to facilitate negotiations, but this proposal was rejected by SEPLA. For this role the company had suggested Esteban Rodríguez Vera, who has held numerous positions in the Ministry of Labour, including those of Director General and General Technical Secretary, and also Carolina Martínez Moreno, professor of labour law at the University of Oviedo, and chairperson of the National Consultative Committee on Collective Bargaining.
The airline worked openly and in the best of faith with the mediator named by the government, Manuel Pimentel, with the aim of reaching an agreement to call off a conflict that is so damaging to customers, to the company, and to Spain’s tourism sector and economy as a whole.
Iberia was prepared to consider the proposal made by the mediator, but it was rejected out of hand by the SEPLA pilot’s union, so could not even be discussed.
Iberia’s Spanishness
Iberia is not the property of the SEPLA union, but belongs to shareholders around the world, who risk their money, vote on company strategy (including the creation of Iberia Express), appoint top management, and keep watch on the company through the board.
The company’s headquarters, its operational base, and the lion’s share of its business, are all in Spain, and this is the greatest guarantee of its Spanishness.
Sixty-six strike days are not the best way to attract serious investors to the company or the capital required to ensure survival and future growth, but, on the contrary, they drive investors and customers away, and constitute an irresponsible action by the SEPLA union that poses the greatest risk to Iberia’s future.
The T4 Hub Terminal 4 at Madrid-Barajas airport does not belong to the SEPLA union, nor to Iberia, nor to British Airways, nor to any of the many other airlines that use it. It belongs to the state agency AENA, hence to the country as a whole, and it is open to airlines that pay fees for its use.
Iberia is the largest user of this terminal, so its pays the most to AENA. Iberia group airlines operate more than 600 daily flights from/to Madrid, as compared to 10 operated by British Airways, which has actually reduced the number of its Madrid flights since the merger.
IAG
IAG, the holding company to which both Iberia and British Airways now belong, is a Spanish company with corporate domicile in Madrid and operational HQ in London. The chairman is a Spaniard, Iberia chairman Antonio Vázquez, and its largest shareholder is the Spanish bank Caja Madrid (now Bankia).
The IAG board has 14 members, seven chosen by Iberia and seven by British Airways, and it supervises both companies.
IAG’s primary concern is for both airlines to be profitable, and to create value for shareholders, employees, and customers. But the two airlines maintain their separate identities and brands, along with autonomy of management, with each one obliged to solve its problems using its own means and resources. Each airline has to finance investment with its own funds. Each airline has its plans and must manage them with its own resources, solving problems with its own means. The motive of the merger was to create synergies, i.e. to save on costs thanks to a larger volume of purchases, and to share certain resources and increase revenues thanks to a larger network.
Iberia believes it necessary to state the foregoing to further the understanding of the current situation by its customers and the public at large.
The company will continue to use all means at its disposal to assist customers affected by the strikes, and to assure the future of Iberia and of its more than 20,000 employees.
Iberia appeals its pilots to stop the strike and work to make Iberia one of the most competitive airlines, which will benefit them and the company as a whole.
