Spanish government draws flak for opposing Iberia restructuring
The Spanish government has been strongly criticized for opposing the restructuring of its national carrier Iberia Airlines. International Airlines Group Chief Executive Willie Walsh stepped up his criticism of the Spanish government for its position. The International Airlines Group or IAG owns British Airways and Iberia Airlines.
Walsh has defended his decision to form the International Airlines Group in 2011 by merging British Airways and Iberia Airlines. Even after the merger, Iberia Airlines had performed badly and had been a drag on the IAG’s overall performance. Walsh vented out his frustration while speaking on the launch of British Airways inaugural flight to Chengdu.
Walsh said that the performance by Iberia Airlines in 2012 had been quite miserable. He said that British Airways reported a profit of $561 million (347 million GBP); while on the other hand Iberia Airlines reported a loss of $478 million (296 million GBP). This was despite reported ‘synergies’ from the $465 million (288 million GBP).
According to Walsh, the synergies with Iberia Airlines are fantastic and that’s a long-term structural benefit for the IAG. He said that Iberia Airlines needs to be restructured at all costs to offset losses. Undertaking restructuring exercise in the current circumstances would be easier, and particularly it will be even quite easier if the restructuring is done in a group such as IAG. He said that such a vocal opposition from the Spanish government was not expected and that the outbursts were badly timed.