Iberia has adopted a three-year strategic plan involving fleet rationalisation, the adoption of a management structure modelled on British Airways and American Airlines, a move to internet and electronic ticket sales, and the establishment of cargo, maintenance and other activities as autonomous profit centres under a new holding company.
The plan, running until 2003, does not involve a major restructuring, however, and Iberia president Xabier de Irala says it entails a "continuation of the strategy we have used between 1997-99, which saw all of our targets easily met".
Iberia, which is aiming for an initial public offering this year, plans to retire all its McDonnell Douglas DC-9s and DC-10s, and Boeing 727s during the three-year period, cutting the number of types in its fleet to six. A 31% rise in available seat capacity is nevertheless being targeted through better aircraft utilisation, from 7.9-8.9h per day.
The adoption of internet/e-ticket sales should cut transaction costs by 70%-80%, while the move towards separate profit centres will allow units to seek allies and outside investors. Iberia forecasts an annual 8.4% increase in turnover to 2003, to €18.6 billion ($17 billion), with profits growing to €900 million. Return on investment should improve from 15% to 16.6%, via a 10% cut in unit seat-kilometre costs and a 23%improvement in productivity.
Source: Flight International
