Kevin O'Toole/LONDON
IBERIA ENDED 1994 with its first operating profit in five years, leaving the ailing Spanish carrier optimistic that it can deliver the promised turnaround over the next two years.
The state-owned group, which is still awaiting European Commission (EC) approval for its rescue plan, ended the year showing an operating profit of Ptas5.9 billion ($47 million) - its first since 1990.
Iberia president Juan Saez believes that the group will improve on the result this year with an operating profit in the order of around Ptas15-20 billion. He adds that the 1994 improvement came despite new competition in the domestic Spanish market.
The group also cut its net loss by 40%, to end 1994 with a deficit of Ptas 41.4 billion. Saez remains confident that the carrier is on course to return to profitability "by the end of 1996", as outlined in the restructuring plan now before the EC.
The effects of the restructuring already show through in the 1994 results, with operating costs down by 2.3% in 1994. The workforce was trimmed by nearly 1,000, to end the year below 23,700.
Under the rescue plan outlined earlier this year, Iberia has pledged to lose another 3,500 staff by the end of 1996, and push through average wage cuts of 8.3%.
A four-year wage freeze was imposed in 1993. The group says that it is already two-thirds of the way towards making targeted cost savings of Ptas5 billion.
The plan, which includes a cash injection of Ptas30 billion from the group's state owners, also pledges a 13% reduction in the fleet. A decision on the plan is due from the EC by June.
During 1994, seat capacity was cut by 6.4% over the year, against a 3.1% fall in passenger traffic. As a result, load factors rose by more than two percentage points, to 68.8%.
Source: Flight International
