Kieran Daly/LONDON John Parry/MADRID
THE EUROPEAN Commission (EC) is bringing pressure on the Spanish Government to withdraw its appointed members of Iberia's board as a condition of permitting a proposed $1 billion cash injection.
The condition would remove seven Government nominees from Iberia's 13-strong board and the news comes as Iberia runs into further difficulties with its South American interests.
Venezuela's Government wants to increase the capital of deeply troubled flag carrier Viasa, preferably by selling its 40% shareholding. Iberia has a 45% share of Viasa and is being looked to as the most likely purchaser.
A senior Iberia source says that the situation is "almost a carbon copy" of what happened at Aerolineas Argentinas, where Iberia reluctantly ended up increasing its stake to a substantial majority holding.
Iberia has already delayed for two months a crucial Viasa shareholders' meeting, at which the Venezuelan Government is expected to refuse to participate in the capital increase and pass its shareholding to Iberia. Analysts say that Iberia is hoping to postpone the Viasa meeting until Brussels has decided on the Spanish subsidy issue - which may not be until June.
Viasa declared a provisional $58 million loss in 1994 and must make a capital increase of at least $60 million, to cover its debts and recapitalise.
The airline is suffering day-to-day financial difficulties. Airline industry sources in Madrid say that it defaulted on payments for leasing on two Airbus A300s earlier this year. Although Iberia says that those two aircraft are now due to be substituted by two Boeing 727s, doubts remain over whether Viasa can afford to lease them.
Source: Flight International
