Iberia to axe 4,500 jobs, reduce fleet by 25 aircraft

[sn26567]

Iberia will axe 4,500 jobs, cut staff salaries, reduce its fleet by 25 aircraft (5 long-haul and 20 short-haul) and downsize its network by 15%, focusing on profitable routes under a large-scale restructuring plan announced by parent company International Airlines Group (IAG).

Iberia has performed worse than British Airways in recession-hit Spain, with its low-cost carrier Iberia Express hit by labour disputes.

"Iberia is in a fight for survival," said the Spanish subsidiary's chief executive, Rafael Sanchez-Lozano. "It is unprofitable in all its markets.

"Unless we take radical action to introduce permanent structural change, the future for the airline is bleak."

[Flanker]

IB top management are also a bunch of amateurs.

Instead of going hourly with A321 on BCN-MAD on weekdays, they fly 19 daily with a mixture of equipment A319/A320/A321 that results in a mess of an operation and end up losing half of their customers to rail.

They operate the most lucrative routes to South America, yet can't make any money on them because they are darn expensive compared to their Brazilian counterparts.

The product is marginal, you must be a food genius to figure out what is in the meal they serve you, cabin crew is old and tired, and they're darn expensive.

On the other hand, they don't miss an opportunity to impose a hand-out on their employees.
Compare it with SN and you know why these airlines aren't working.

Top managements are clueless, don't have any strategies, any vision, any idea of what they should do, other than to downsize and downsize andhope to find a bottom somewhere

You can't learn to manage an airline in a school, it's a work of passion and dedication.
I've heard people sweeping the floors at airlines making more sense than their CEO's, and this is a very sad truth. You need aviation knowledge to find solutions to aviation problems, not delegate everything to people who do, because if Giotto, Picasso and Renoir had to paint a project together on the ceiling of the Cappella Sistina, with Gustin or his friend at IB to manage them, you will probably get a mess.

[teddybAIR]

I've heard people sweeping the floors at airlines making more sense than their CEO's, and this is a very sad truth.

With al due respect for all people sweeping floors but they - just like most participants to internet fora - have the luxury that they do not have all the info. Hence, they can 'assume away' and live in the illusion that their recommendations to 'simplify' or choose this or that metal to fly a particular route will actually fundamentally change something. We don't have to face a union, we don't have supplier contracts, know squat about how routes are started up or discontinued, yet feel compelled to show off our rationale and recommend a course of action with our lack of knowledge of the context. Weird.

[Inquirer]

Flanker, your comments above are leaning very much towards the most ordinary platitudes as you can expect them from the mouth of somebody who has no clue about managing a large company whatsoever, yet thinks he knows it all so much better just because he happens to be an absolute expect on one tiny little aspect of the entire business.

I have asked you several times already and you constantly refuse to answer this very simple question, which is your very right of course even though it is also an answer in itself then, but I will ask you once again: what are your professional credentials to justify thinking you could run an large airline successfully yourself?

Not your usual ranting about how easy it all is, how stupid some new plan is, what a clown this or that CEO is for operating the completely wrong planes or employing way too old staff, but simply your own personal credentials on the job itself: what multinational have you personally been involved with and have ideally helped turning around? Name and year is enough, the rest we will find online ourselves, thank you very much.

I happen to be involved in management of a significantly large multinational myself and I can tell from your comments that you haven't been near any boardroom meeting worthy of that name even, but seem to have spent a fair amount of time talking to the cleaning staff instead, which -as others have said- are not the most informed people in a company: if you think they make far more sense than the CEO, than it may very well be because your insights and knowledge aren't reaching much further that of the janitor's office either.

Think about that for a minute before you post in the way you have done so above: it will do yourself as well as this forum a favour, believe me.

Finally, can we stay on topic: this topic is about Iberia, not about other airlines which you do seem to have an almost orgasmic obsession with and feel the irresistable need for to drag them into almost every discussion you enter?

Thank you.

[Flanker]

Inquirer, first go and hear what the guy who sweeps the floors at SN says, then we talk.

I heard what Gustin says, (and I hear that he likes this forum a lot (hi Bernard :wave: ))and frankly he is a nice guy but he has no clue, no vision, no strategy. I know that he's trying and trying very hard, and for that you can give the man credit, but that is not enough. To stand on top of a 3000 people pyramid, it takes vision, leadership, direction and killer instincts.

There are several people around him who do know what they're talking about but there are also many naysayers and career managers who if asked to give a 20 minute rundown of all the aircraft available on the market in the category that SN would need them, they would not be able to give you the most basic information. They would excel at giving you a run-down of information that they memorized, but serves no useful purpose.

I know how the corporate world works my friend. It's the world of 77%'s. 77% don't care as long as they get their salary at the end of the month, 77% get promotions through personal favors ( a pejorative term to describe it would be: licking b*lls) rather than performance, 77% of the people don't know what they're doing except that they're doing it, 77% don't know their position in the big picture, 77% don't know who their CEO is, 77% of CEO's spend 77% of their time doing nothing but preparing defense strategies against the shareholders. It's true, vini, vidi, vici, hated it.

Like they say, if you're good, you don't work for a boss, you become your own boss...

SN can be a beautiful airline, but the vision has to change.
SN's vision of the future shouldn't be a few more A319's, no additional A330's, and maybe some Ejets.
SN's goal should be a line-up of 40 A380's, 60 A350XWB's and 80 A320 NEO's.
If EK can do 3 times better than that with a hub in the middle of the desert, there is no way SN can't achieve that. And for that vision to become thruth, you need a much more flexible approach to aviation than thinking in the small narrow box.

A good idea makes millions. A terrific idea makes billions. Many people gasp that the golden ages are past us, etc... Yet it's nonsense because billionaires have never risen as fast as they do today. In a globalised world, money moves faster than ever. It only takes an idea, initiative and a team with vision.

How this relates to IB? It's one of those many carriers that need a vision and they need it fast.

Only few succesful companies have been risen by non-owner CEO's.
For instance at Ryanair, it used to be a struggling airline and suddenly a team who knew the workings of the company rose with an idea in mind. They went to Mr. Ryanair and said: "We have a great idea to make you money, just let us take the initiative, invest in it and we'll make it work."
Not many career ceo's do that nowadays, they keep nodding at the shareholders, they're happy telling everyone that they're a ceo, but for the rest they don't do much.

[Charlie Roy]

Off topic, can we talk about Iberia please.

[jan_olieslagers]

seconded

[Inquirer]

Unless you finally want to reply to my simple question about your very own credentials, flanker, can you come back to topic?

Other than a lot of frustration, there seems to be very few substance to your many critics and the longer your posts become, the more it becomes obvious. For the sake of this discussion stay on topic and by all means, keep it short, please.

[Flanker]

Off topic, can we talk about Iberia please.

seconded

If you want to talk, talk.
What is there to say?

IB is firing 4500 people and everyone has seen it coming for years.
Not much to talk about it here, except for bad management and the cause of such bad management.

Sure we can talk about how this was in the making with IB Express being set up, to get rid of the high cost pilots and cabin crew.

Sure we can talk about the consequences for the job market, for instance that there are thousands of pilots with good amounts of hours on type on the job market and that the flight schools are still selling you that there is a huge pilot shortage just around the corner.

We can talk about how Ryanair is going to use this opportunity to strengthen its market position in Spain.

We can talk about anything you want, but if you want to talk, talk.

[cnc]

i'm not really following the IB situation so...
is it really 4500 jobs they axe or is it a forced move to IBS for those people since IBS is taking over IB flights

[airazurxtror]

We can talk about how Ryanair is going to use this opportunity to strengthen its market position in Spain.

Ryanair is already first in Spain with 20,5% of the seats offered - but that can still be bettered, of course !

[Airbus330lover]

We can talk about how Ryanair is going to use this opportunity to strengthen its market position in Spain.

Ryanair is already first in Spain with 20,5% of the seats offered - but that can still be bettered, of course !

Oui on sait mais c'est hors sujet.

Enough IS enough. Back on topic please.

[airazurxtror]

I happen to be involved in management of a significantly large multinational myself and I can tell from your comments that you haven't been near any boardroom meeting worthy of that name even, but seem to have spent a fair amount of time talking to the cleaning staff instead, which -as others have said- are not the most informed people in a company: if you think they make far more sense than the CEO, than it may very well be because your insights and knowledge aren't reaching much further that of the janitor's office either.

When the going gets rough, you don't have to be a genius to
- axe 4500 jobs
- cut salaries
- reduce fleet
- downsize the network
Anybody can do that - even mister Gustin is about to do something of the kind.

What the fat cats at Iberia don't understand or don't care about is the consequences of their decisions on the lower staff :
- a good amount of working time will be spent in discussions about their own future (if any)
- loss of motivation and terrible state of mind : where is the reason of doing the best possible work if I am to be fired nonetheless ? Screw the customer !
- everyone trying to keep his/her job at any cost, including sabotaging his/her colleagues and friends
- a good many, seeing that the writing is on the wall, will spend all their resources trying to find a job elsewhere - the best and brightest actually finding one and leaving

And then what ? More firing of personnel, more salary cuts, still less aircraft and routes ? Where does it end ? At the bankrupt !
No, I have never been in the management of a large multinational, but I know how it feels to be at the receiving end of their brilliant ideas.

[papysn]

@ airazurxtror:

I totally agree and share the same feeling...

Regards.

K.

[RoMax]

And then what ? More firing of personnel, more salary cuts, still less aircraft and routes ? Where does it end ? At the bankrupt !
No, I have never been in the management of a large multinational, but I know how it feels to be at the receiving end of their brilliant ideas.

And who do you think made this decisions? Iberia on its own? Really!? Of course not, IAG is the mother company, to state it simple: BA is making money, IB is losing all of it. Who do you think is going to say enough is enough? Not Iberia (they'll continue messing things up), no BA is going to say this (just as KL has been seriously irritated over the performance of AF in the past years, with the difference that BA has more power in IAG than KL in AF-KL). BA is tired of the mess and as they see Iberia Express is a faillure they want to go beyond being 'rather nice' in times of a huge economical crisis in Spain. BA is the one that says, we are going to grow and you are going to shrink. The routes that don't work will go and Vueling will come in place of that and we will take care of a part of your long haul network as we can do it and you don't.

Of course this is not good at all for the mental state of the people working for Iberia and the results that will have on their working capacities, but is it better that the whole Iberia staff is going on strike when Iberia wants to shift a new route to Iberia Express?! Iberia can't solve the mess with the unions (even the government interfered in this), Iberia ran out of time given by BA/IAG and things are getting worse. What else can you do? It doesn't help saying that they did it all wrong in the past (just as happened with SN), that's not going to bring the company back to black numbers. It's time to act now and if it doesn't work to move your European routes into a lower, cost effective company, than you have to act much more aggressive. If they continue like they did the last 6 months or so, they will still be in the exact same situation as they are now(with all the strikes, even more losses, EU routes that are going to be axed as they can't be replaced by Iberia Express due to the staff, running loss making long haul routes with a messed up service/interior,...).

[fcw]

I happen to be involved in management of a significantly large multinational myself and I can tell from your comments that you haven't been near any boardroom meeting worthy of that name even, but seem to have spent a fair amount of time talking to the cleaning staff instead, which -as others have said- are not the most informed people in a company: if you think they make far more sense than the CEO, than it may very well be because your insights and knowledge aren't reaching much further that of the janitor's office either.

It is a dirty job and somebody has to do it, BUT do the beancounters deserve a bonus for axing jobs and reducing salaries???

[teddybAIR]

With list prices for medium range narrow boddied aircraft around 70 million €'s, I'm thinking that scaling a fleet in function of demand is a more complex job than most people on this forum (including me) could ever imagine.

The decision of IB to axe 4.500 jobs and cut the fleet by 25 frames is not the most popular decision among employees or aviation forum member, go figure! But management wouldn't take such drastic measures is they weren't necessary, right?

About having a vision: there is a difference between a company's vision and an individuals dreams. The difference is the fact that in the real world, you have to hack it with limited resources and operate within certain limitations (workforce, budgets, leasing contract terms and durations, seasonality of demand, etc.)

[RoMax]

Iberia is about to announce the end of 3 long haul routes (and they are looking at more possible casualties). Iberia is about to stop flying from Madrid to Havana, Santo Domingo and Montevideo.

Besides that they'll stop flyint to Istanbul, Cairo and Athens after they already announced the end of Amsterdam, Stockholm and Berlin.

The plan is to reduce capacity in Europe with 21% and 13% on the long haul network (especially destinations that aren't served daily are vulnerable according to the ceo). It's being said that only 10 of the about 100 routes of Iberia are profitable of which 8 are on the transatlantic network.

It's a shame to see they can't even make their unique Latin-American market work...

[LJ]

It's a shame to see they can't even make their unique Latin-American market work...

Which will become even more problematic if you axing feed in MAD... By axing AMS, ARN and TXL they're already making life for the competition a lot easier at those destinations. If they continue axing EU destinations this will become a bigger issue.

[RoMax]

Which will become even more problematic if you axing feed in MAD... By axing AMS, ARN and TXL they're already making life for the competition a lot easier at those destinations. If they continue axing EU destinations this will become a bigger issue.

Agreed, though things aren't made easy for them. AMS, ARN and TXL are heavily loss making routes and their contribution to the long haul network is not enough to justify the operation of these routes, at least not by Iberia mainline (in the case of ARN and TXL). AMS even failed with Iberia Express...but ARN and TXL are operated by Iberia itself, they don't really want to axe these routes, but the personnel makes it impossible to transfer these routes to Iberia Express (and there are many more than just ARN and TXL). In the current situation it doesn't make sense to keep these routes, even when taking into account that they'll lose some transfer traffic.

On the long haul network they made (in my opinion) the crucial mistake not to go with a more efficient aircraft like the A330 already years ago. Now they have the A333 on order, but it's comming too late. Now they have about the least efficient long haul aircraft (and in some cases too big for them) and their cabin is outdated (something you don't want with the increasing capacity on the Europe- Latin American market).

They made huge mistakes in the past and the way they try to solve it doesn't seem the best either, but their personnel doesn't give them a lot of choice. They don't want to give in enough to solve the problems in Europe, as a result Iberia wants to transfer more to Iberia Express (and I believe they'll try to transfer a lot of traffic to Vueling) which is blokked by the personnel as well.