Iberia Airline facing losses, unlikely to earn profit before 2013

Iberia Airline is facing losses and is unlikely to make profits before 2013, a top official of the airline said recently.

Media reports citing Iberia Airline’s Chief Executive Officer Rafael Sanchez-Lozano said that the International Consolidated Airlines (IAG) Group SA’s Spanish unit is not expected to earn profits before 2013 due to higher fuel costs and weak domestic demand.

Sanchez- Lozano said that if the airline doesn’t show significant changes within 12 months then earning profits will become tougher. Iberia Airline had in its recent operational results reported H1 operating loss of US$108 million. The airline is now merged with British Airways.

Iberia Airline also stated that it is unable to cope up with the losses for the time being as jet fuel prices have risen 10% this year, and are further expected to witness a sharp increase of 25 % in 2012.

Meanwhile, in another development Iberia Airline recently announced that it will be launching a new budget carrier named Iberia Express to handle short as well as medium-haul flights from the Madrid-Barajas Airport. The new carrier will begin its flight operations in mid-2012.