IAG promises no changes with ownership of Vueling

International Consolidated Airlines Group (IAG), a UK-based airline owner and the parent of British Airways, has promised that its purchase of Spain-based budget airline Vueling will not impact on services currently operated by its other Spanish airline, Iberia.

Suggestions that the Vueling takeover could result in more of Iberia’s loss-making short-haul routes being axed have been scotched by IAG. It was also considered possible that Vueling could be viewed as the prime carrier between Spain and Gatwick in the UK, with British Airways abandoning its own services on the routes to leave the field open to its new sister company, but that rumour has also been denied by IAG.

An IAG spokeswoman said, ‘Vueling has got its own business model, we have no changes planned. It is of value to us as a stand-alone business.’

Among the routes that Vueling already operates from the UK are services from Heathrow to La Coruna and Bilbao; Gatwick to Barcelona and Palma; Cardiff to Alicante, Barcelona, Malaga and Palma; Edinburgh to Barcelona; and Heathrow to Florence.

Vueling’s pre-tax profit last year was €33.2 million, while its revenue experienced a 27 percent increase to €1.1 billion. In gaining full control of the company, IAG has increased on the 45.85 percent stake that it already owned as part of its purchase of Iberia, paying €123.5 million to achieve a controlling interest of 90.51 percent.

IAG has in the region of 400 aircraft at its disposal, and it uses them to service around 200 international destinations. Recent substantial aircraft orders are set to boost its fleet still further over the next few years.

BA boss takes hard line on ‘weak airlines’

Willie Walsh, the head of British Airways’ owner, IAG, has taken a hard line on what he described as ‘weak airlines’.

Speaking during a session at the CAPA Airlines in Transition 2013 conference in County Wicklow, Ireland, Walsh said that failing airlines should not receive state aid, but should be allowed to go under. His comments were aimed at European carriers that receive state aid from their governments, while Walsh believes that any lost capacity from their failure would soon be taken up by other carriers, assuming that there was a perceived demand. He singled out Malev, a Hungarian Carrier, and Spanair that operated out of Spain to justify his argument against state intervention.

He said, ‘State aid has gone to carriers in the past which has allowed them to continue for a while before eventually failing. The weak do not have the right to stay. They should be allowed to disappear – that’s what regulators should allow to happen. If you look at the capacity from Spanair, that was replaced overnight by other carriers. With Malev, around 60 percent of capacity was replaced. Governments have been concerned in the past about losing access if an airline went under, but those days are over now. If there is demand then the capacity will be replaced.’

Walsh also criticised the practice of failing airlines joining major alliances as a means of solving their financial problems. Commenting on this he said, ‘Alliances will not guarantee your success. You have to have a robust business yourself and be profitable in your own right. Joining an alliance will only complement or supplement that business.

‘Anybody who thinks the answer to their financial problems is to enter an alliance, they are fooling themselves.’

BA workers plan show of support for Iberia strikers

Workers at UK-based British Airways are planning a show of support for striking employees of BA’s Spain-based sister company, Iberia.

Both companies are owned by UK-based International Airlines Group (IAG), and BA workers are planning to hold a lunchtime demonstration tomorrow (Wednesday) in support of their colleagues’ on going industrial action. Iberia staff are now into their second week-long walkout in protest at proposed job cuts that IAG says are necessary if the airline is to be profitable again. A further strike is planned for March 18 to 22, with a previous one already having taken place between February 18 and 22.

IAG is proposing to cut 4,500 jobs at Iberia, which equates to a little under a quarter of the total workforce. Commenting on the BA workers’ show of support, Oliver Richardson, the national officer for the Unite union, said, ‘BA staff are going to be showing their dignified and peaceful support for their colleagues at Iberia.

‘The Spanish workers are defending their jobs and their airline from an unacceptable attack. BA cabin crew know only too well the pain and the struggle the Spanish workforce are having to endure. The situation at Iberia bears an uncanny resemblance to the British Airways cabin crew dispute during the spring and early summer of 2010. Even the language being used by IAG is almost identical to the rhetoric of that dispute.

‘Cabin crew here in the UK are at a loss to understand why the senior management team at IAG is allowing history to repeat itself.

‘IAG should learn the lessons of the BA cabin crew dispute and take the short-cut to the negotiating table and avoid this unnecessary conflict.’

Strike action grounds Iberia flights

Spain-based Iberia airlines is suffering the latest round of on-going strike action, forcing flights to be delayed and cancelled.

Over 1,000 flights could be grounded as Iberia workers take on the company’s owner, IAG, in a dispute over job cuts. The five days of strike action has been timed to coincide with the UK school half-term holidays, usually a major money-spinner for the Spanish economy and airlines alike.

The walkout, which started at midnight, is the first of three five-day strikes that the Spanish trades unions have scheduled for February and March, in opposition to the company’s plans to cut 3,807 jobs and to cut costs further by reducing salaries. The company has cancelled 415 of its own flights over the next 5 days, but other airlines could also suffer the knock-on effect of strikes by handling staff at Spanish airports, with the likelihood of 1,200 more flights being grounded.

According to Iberia, 70,000 passengers will be affected by this current strike, although long-haul services will be less affected than domestic flights, with 90 percent of the long distance services expected to be operational, compared to just 50 percent of flights within Spain.

On the first and last days of each strike, further disruption is expected from union-organised demonstrations that will take place between 11am and 2pm, and a mass protest has been planned for central Madrid on Wednesday.

The other two strikes in this round of protests are planned for March 4 to 8, and March 18 to 22.

The Spanish unions also organised strikes in the run up to the busy 2012 Christmas period.

IAG Chief Criticises UK Government on Airport Expansion

International Airlines Group (IAG), the UK-based parent company of Iberia and British Airways, has criticised the UK government policy for increasing airport capacity in the southeast of the UK.

The company chief executive officer, Willie Walsh, said at the opening session of the Business travel Show 2013, in London, ‘My own view is that we are not going anywhere with this. British Airways has planned its business on the basis that there will be no third runway at Heathrow. In 50 years time I expect that BA will still be operating from a two-runway airport at Heathrow.

I have heard Gatwick talking about a second runway but that is assuming that airlines are willing to pay for it. I am not going to spend one penny on new runways at Stansted or Gatwick.’

Earlier a study commissioned by the London Heathrow airport owner, BAA Ltd, suggested that lack of capacity at London Heathrow Airport is affecting the UK’s economy. The report, prepared by Frontier Economics, says that the lack of capacity is currently costing the country up to GBP14bn a year in lost trade, and the loss may increase to GBP26bn a year by 2030.

London Heathrow currently operates at 99 percent capacity, with no extra capacity for new trade routes to new economies, thereby affecting the growth of the UK economy. There are around 1,532 more flights to cities in Mainland China from Paris and Frankfurt airports than from London Heathrow.

The mayor of the city of London, Boris Johnson, has appealed to the city’s businesses and people to forward their views on how the city can solve the capacity crunch at London Heathrow airport.

British Airways Announces New Service to Spain

UK based British Airways has announced changes to its 2013 summer schedule, to include a new route.

The airline is offering weekend services to Ibiza, in Spain, from London Heathrow airport, from April 27, 2013. The airline currently offers services to the White Isle from both London City and Gatwick airports. The airline is also introducing flights to Spain from London Heathrow airport to Palma, commencing from March 31, 2013, and from Gatwick airport to Lanzarote commencing from March 31, and Tenerife from Gatwick commencing from March 29, 2013.

The airline has also announced that it is moving its services to Leeds Bradford and Zagreb from London Heathrow airport Terminal 1 to Terminal 5.

From March 31, 2013, the beginning of the airline’s summer schedule, flights to Leeds Bradford will be reduced from four to three flights per day, while winter schedule flights to Dublin, in Ireland, and Tripoli, in Libya, will be continuing into the summer schedule. The airline is offering up to 53 flights per week to Dublin, and three flights a week to Tripoli.

For the summer schedule, the airline is also offering a yearlong service to Almaty, in Kazakhstan from April 2, 2013. The airline will be terminating its service to Tbilisi in Georgia by March 2013, in favour of the service to Almaty, which will operate out of Terminal 5 at Heathrow.

For international travellers, British Airways is offering complimentary hotel rooms to visitors to UK as part of its endorsement of the Big British Invite promotion, in partnership with VisitBritain, the official tourism website for Great Britain.

Iberia Pilot Union Agrees on Talks with Airline

Unions that represent workers at Iberia, the Spain based airline owned by International Airlines Group (IAG), have agreed to participate in negotiations with IAG for planned job cutbacks.

Previously, IAG had proposed a comprehensive plan to restructure the airline, which includes a decrease of 4,500 jobs, reducing network capacity by 15 percent in 2013, and removing around 25 aircraft from the fleet.

The company has also recently announced that it has acquired support from its workers’ unions to negotiate its Transformation Plan.

The company has released a statement saying, ‘Iberia and unions representing ground staff and cabin crews, comprising 93 percent of the total staff, have agreed to negotiate the terms of the company’s Transformation Plan, aimed at restoring profitability and ensuring the airline’s future.

In today’s meeting Iberia management reiterated its wish to rely chiefly on early retirements to achieve about two-thirds of the staff reduction called for in the plan. It is also prepared to negotiate such formulas as payoff for voluntary resignations, and transfers of employees to different positions and/or different locations.

The two sides agreed to negotiate terms for a five-year period, through 2017. The company stressed that its restructuring plan indicates its commitment to the future of the company, which plans to invest millions in new aircraft, new long-haul seating classes, improvements to its Madrid hub, and in its maintenance, handling, and cargo divisions, amongst others.’

SEPLA, the union to which Iberia’s pilots are affiliated, has reported, ‘Since it is necessary to negotiate a multilateral agreement with all groups of the airline, Iberia has invited SEPLA to negotiate ‘without delay’ a transformation plan to solve their problems of competitiveness.’

Iberia Unions Cancel Strikes

Unions for Iberia, the Spain based airline owned by International Airlines Group (IAG), have called off six days of planned strikes.

The unions of the striking workers called off a six-day strike before Christmas after meeting with the airline management, and on advice of the mediation and arbitration service.

The company has issued a statement saying, ‘No agreement was reached at the meeting, despite Iberia’s undertaking to be flexible in considering the proposals advanced by the unions. However, though the opportunity to move forward was missed, the meeting could be another step towards future negotiations.

Iberia hopes that in the future the possibilities of dialogue and negotiations will be exhausted before any new strikes are called since they inflict great harm on the company and its customers.

Iberia is delighted that its customers may now look forward to travelling without problems, though it regrets the damage already caused to company’s public image and to its business.’

The airline is also commencing negotiations with the unions on its Transformation Plan, and is holding meetings with representatives of ground staff, cabin crews, and pilots on December 13, 2012.

As part of a transformation plan, the airline will be cutting down its routes, and will stay focused on its profitable operations.

The airline will be terminating its services to Athens, Istanbul and Cairo from mid-January, 2013; and long-haul services to Santo Domingo in the Dominican Republic and Havana in Cuba, from April 1, 2012.

In a statement, the airline chief executive officer, Rafael Sanchez-Lozano, said, ‘Iberia has announced a Transformation Plan intended chiefly to restore profitability, ensure our future, and to transform us into an airline that is prepared to meet the challenges being faced by the industry, and, most importantly, to meet the expectations of our customers.’

Iberia Announces Routes Cuts as Part of Transformation Plan

Iberia, the Spain based airline owned by International Airlines Group (IAG), will be cutting down its routes, as part of a transformation plan to stay focused on its profitable operations.

The airline will be terminating its services to Athens, Istanbul and Cairo from mid-January, 2013; and long-haul services to Santo Domingo in the Dominican Republic and Havana in Cuba, from April 1, 2012.

In a statement, the airline chief executive officer, Rafael Sanchez-Lozano, said, ‘Iberia has announced a Transformation Plan intended chiefly to restore profitability, ensure our future, and to transform us into an airline that is prepared to meet the challenges being faced by the industry, and, most importantly, to meet the expectations of our customers.

Our Transformation Plan is, above all, a project oriented towards the future, and it includes major investments to improve our fleet and our offer to the customer. The plan calls for a thorough review of our network to focus on routes that are strategic and that otherwise generate value, a new commercial strategy, and a change in our operations of short and medium-haul flights, all of which will make Iberia more competitive, and more attractive to current and future shareholders, ensuring a future for our employees, and anticipating customers’ needs.’

The airline is planning to increase its services to destinations in Brazil, Mexico, US, Central America, Chile and Ecuador; and will be increasing seats on services to London, Casablanca, Algiers, Dakar, Nouakchott and Malabo.

The airline has lost €262 million in the first nine months of 2012, and total losses of around €1,000 million in the last five years. The transformation plan aims to sort out the structural problems of the airline, and is exceed to be completed by 2015.

British Airways Offers More In-Flight Entertainment and Retail Experiences

British Airways, the UK-based airline, has recently upgraded its ‘In-flight Entertainment Experience British Airways’ on its long-distance aircraft.

The entertainment experience will vary with the type of aircraft, but most will be offering a wide range of content that will be available from when passengers board the aircraft to when they arrive at their destination.

For passengers in First and Club World and front row seats, screens will have to be stowed away during takeoff and landing, but they may still listen to audio broadcasts.

The airline has also made plans to increase its in-flight retail offers, as recent research amongst Christmas shoppers has found that a third (or 32%) of people are likely to buy their Christmas gifts on board flights.

Around 30,000 people are flying with British Airways on Christmas Day, and the airline is busy stocking additional gift items for its onboard retail programme, during the busiest shopping season of the year.

Peter O’Shea, the airline on-board retail executive, said, ‘December is our busiest month for on board shopping. Customers like to chose from our carefully selected gifts and benefit from a wide range of travel exclusives and tax-free purchases. Many also like the convenience of buying on board, as it means less to carry in their luggage.’

The airline is also planning to offer a charity donation card, designed by Tracey Emin, and available on board flights and online at www.highlifeshop.com from December 3, 2012. The card, priced at £5, will donate money to Flying Start, the airline’s charity partnership with Comic Relief.