Iberia is set to end its Latin American airline odyssey after shareholders and unions rejected the Spanish airline's plan to restructure Viasa.
The tough stance adopted by Iberia's senior management suggests that new president, Xabier de Irala Estevez, will shrug off political pressure to maintain existing links with Viasa, Aerolineas Argentinas and Ladeco.
Iberia had proposed a three-point plan to rescue the struggling Venezuelan carrier last November but saw it thrown out by employees, led by the airline's pilots, in mid-January.
Iberia called for the other shareholders to underwrite US$18 million in restructuring costs, a 20 per cent reduction in the workforce and a wage freeze, in return for retiring $21 million of the airline's $140 million in longterm debt. Iberia declined to pump any more cash into Viasa, whose projected $18 million loss in 1996 rose to $30 million, but instead offered to provide services, including maintenance.
Sources at the Spanish carrier say it is now ready to push Viasa into bankruptcy, paving the way for other investors to take Iberia's 45 per cent stake. Avensa, the country's largest private carrier, is seen as the frontrunner to acquire the Viasa franchise.
Iberia officials say they are willing to write off the initial investment together with $60 million in mortgages. One source blames the militant attitude of Viasa's pilots for the breakdown. However, the source suggests Iberia will not write off its investment in Aerolineas and American Airlines is expected to acquire a 20 per cent stake. Meanwhile, LanChile's bid to secure Iberia's 35 per cent stake in Ladeco remains mired in the Chilean courts.
Source: Airline Business
