IBERIA IS POISED to sell off its stake in Aerolineas Argentinas and other South American airline holdings, in an effort to raise badly needed cash.
Spain's industry minister Juan Manuel Eguiagaray confirmed on 14 November that the bulk of Iberia's 85% holding in the Aerolineas would be transferred to a group of investors led by the Spanish carrier's state-owned parent, Teneo, and a consortium of US and Spanish banks.
The buyers are expected to take 63.5% of the Aerolineas stake, netting Iberia around $300-400 million. Indications are that the investors intend to sell the holding on to a North American carrier, with observers naming American Airlines and United Airlines as the most likely candidates.
Iberia is still awaiting a long-delayed decision from the European Commission (EC) over a proposed Ptas130 billion ($1 billion) injection of state aid. Sources in Madrid now expect the decision in early December, clearing the way for the sale of the Aerolineas holding. A meeting of shareholders in Argentina has already been scheduled for the end of November.
Eguiagaray says that part of Iberia's 45% stake in Viasa and 37% holding in Ladeco will also be put up for sale.
Iberia is meanwhile continuing with its three-year restructuring plan launched in 1993, which aims to cut out 3,500 jobs, reduce average wages by more than 8% and slice Ptas15 billion from annual costs. Airline chairman Juan Saez hopes that the cuts already made will help Iberia end this year with a loss of less than Ptas25 billion, against nearly Ptas42 billion in 1994.
The airline's improvements could be wrecked, however, by a wave of strikes being threatened by pilots for early December, to protest against the delay in the EC state-subsidy decision, which has been pending for months. Eight days of strikes staged so far in November have cost the airline Ptas600 million a day.
Source: Flight International
