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Old 10th Nov 2012, 16:52   #81 (permalink)
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Microburst2002, can you give the readers of PPRuNe a bit of a rundown of what has happened in the last 10 years or so? Break it down into pre IAG and IAG era if it helps. I am particularly interested in whether the A319 is a separate fleet from the A320 or A321 and whether they have the same management or duplicated. How many flying hours per month do Iberia pilots work, how many days off they have each month, how many weeks leave etc. Also tell us about basic pay, productivity and other benefits.
Lastly, if an airline is loss making, where does the money to keep it going come from and what does the group who cover the losses get for their money?
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Old 10th Nov 2012, 16:56   #82 (permalink)
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I think you need a reality check Microburst.o

Ten years without hiring a pilot in an airline like IB is not natural. They declared total war on pilots over 10 years ago. And IB pilots also had salary cuts, and the era of strikes is long gone, since the first "Laudo", about 10 years ago or more if I recall correctly.
How long ago was IAG formed? If this war on pilots is ten years old how come it's all IAG/BA's fault all of a sudden?

Come on, do you know better about IB than us, the spaniards? Come off it!
No, but nor do we have an emotional attachment which clouds our judgement. We're just looking at the numbers, and it's not a pretty sight.

WW is screwing IB and BA is benefitting from it, and probably the shareholders, too. Now, we can discuss about that. The whole operation, which can be very good for the shareholders, is emptying IB from everything valuable, and turning it into a low cost for IAG (that is, BA) by sacking everybody and hiring slaves.
So explain exactly how this is done rather than just ranting. There is no transfer of resources, capital or routes to BA. The IAG share price has tanked. IB hasn't made a profit in 5 years, is there even anything valuable in there?

PLEASE tell me when did they do that in BA, mate.
BA took it's pain over the last decade. 5 bases cut to just 2, 65000 staff cut to 45000, aircraft fleets rationalised, property sold, third party interests sold, ground handling outsourced, suppliers squeezed, productivity up, costs down. Why do you think IB can avoid this reality?

Screw the shareholders. Are you capitalists or what? I mean Do you own Capital? Otherwise defending the shareholders and their repugnant manoeuvres to scam people is quite silly.
Let me remind you, IB exists to make money for the shareholders, not to serve as a golden goose for the employees. If you don't make profit then the shareholders take their money elsewhere, you can't get cash and the company fails. That's how business works everywhere in the world.

Why? Did we establish the monetary policy? Who kept the interest rates at nearly zero for over a decade? Not the PIGS, I can tell you. French and germans. Oh, but they are so clever, they are never wrong. They fueled a monster. Bubbles are not created by the people. Bubbles are created by the asholes of the European Central Bank. Why are to be blamed those who get into mortgages because it is silly not to? with such very low interest rates, why the hell not mortgage two instead of just one house? Money being that cheap, it is silly not to buy money.
I tend to agree with you, but it's not really relevant to the debate, except as a part explanation as to why the trading climate is so bad in Spain. Unless you have a time machine and can turn back the clock you are going to have to deal with the situation as it stands now, not as you'd wish it to be.

You chose to ignore all the efforts that IB pilots have been doing in the last 7 years or so, and the drastic reduction in salaries and increases in productivityh they have been offering to the managers. THEY WERE SCAMMED AND CHEATED. They believed they were negotiating, for years, when in fact the managers never had an intention to reach an agreement. Believe me in this or research. Because it is clear that you are not experts in Spain and IB.
That may well be so. The problem remains that IB isn't making any money, and that is very much the bottom line.

Iberia has burned through €1 BILLION of it's reserves in four years. It's got just €1 billion left, and lost €262 million last year alone. How long do you think that can go on before the fuel companies start asking for cash payments each time you gas up?
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Old 10th Nov 2012, 18:20   #83 (permalink)
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Screw the shareholders. Are you capitalists or what? I mean Do you own Capital? Otherwise defending the shareholders and their repugnant manoeuvres to scam people is quite silly.

Oh, and don’t forget than many times, the shareholders are not benefitted at all, but the CEOs are, instead… Wake up, Santa Claus does not exist.
The airline exists for the benefit of the shareholder! Not for the benefit of the employee, that ceased to exist when the nationalised airlines disappeared. For an airline to function it needs capital, for it to generate capital it needs investment based upon projected returns.

IB raised capital based upon a premise that the Spanish Government would step in and bail it out if it failed to return on the investment. Up until 2007/2008 a fairly certain bet. Now, not a hope.

If IB fails to attrach investment then the shares slide, the value of the company as a whole decreases and the future investment in equipment, routes etc. becomes risky.

Welcome to Capitalism.

As for BA shares being halved, haven't you lot seen what is going on in the big bad economy.

Stop bleating. IB needs restructuring, that is where IAG has seen the potential for growth. The pain needs to be taken now. IB messed up enough on it's own without outside help. At least IAG has a plan and the ability to see it through.
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Old 10th Nov 2012, 18:42   #84 (permalink)
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Certain managers have the ability to convince its workforce that unless change happens, the business will cease to exist. Once the change capital has been redistributed, the business returns to healthy profits that are not in line with the capital saved by the redistribution.
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Old 10th Nov 2012, 18:46   #85 (permalink)
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Explain that to a fair few of my friends who no longer have a job after the failure of the redistribution of the 'change capital'.
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Old 10th Nov 2012, 18:52   #86 (permalink)
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Explain what?
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Old 10th Nov 2012, 19:04   #87 (permalink)
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There's no need to explain. Litebulbs thinks that managers can cook the books adequately so that they can create an impression that a business is failing to scare the employees into change, then once change is secured they begin making supernormal returns. Of course managers can scare employees but they rarely scare those with a professional level of financial acumen and interest. Remember how long it took the analysts to strip away the smoke and mirrors after Virgin put out those curious 10 month financial results? About 24 hours if I remember correctly. Unfortunately large, high profile listed airlines can't really get away with cooking the books in that way as too many people have too great an interest in them. Sure, you can get a departmental manager to scare his subordinates into believing they better cut costs or be outsourced, but for a major airline entity the numbers speak for themselves. If the CEO says the company is at risk of going t*ts up in the medium term then the chances are he's sounded that message out with key institutional investors already and they agree. It's when airline CEOs say a company is definitely not going bust I start to worry.
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Old 10th Nov 2012, 19:22   #88 (permalink)
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Litebulbs does think that.
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Old 10th Nov 2012, 22:22   #89 (permalink)
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Spain is a very difficult country to do business. I read a recent report saying that it is more difficult to start a business in Spain than in most African countries. So you are better in Africa starting your business than Spain.
I can see the Iberia brand continuing but not the company. IAG will find it easier and more profitable to run the operation out of London with a base in Madrid. It may be that crews will not be based permanently in Madrid. It's difficult to understand how things work in Spain. Real power is concentrated in relatively few people. Most owe their wealth to Franco. Let me explain.
Spain is a relatively new convert to democracy, only having free elections in the mid seventies. Franco was a dictator, he and his cronies owned everything. There was no revolution, those who owned everything in Franco's time still owned everything after Franco died. The sons and daughters of those people still control Spain.
Look at the vast infrastructure projects that have helped push Spain in bankruptcy. These multi billion euro projects were instigated by local politicians. These local politicians normally came from local political and business dynasties, dynasties which have their origins in Franco's rule. They also sat on the boards of the small regional banks who lent money they did not have to finance theses projects. Contracts were given to companies which these people owned or had a direct interest in. If not the contract was given to a " friend". Billions were made and its still going on, Spain is still spending billions of borrowed money on projects it does not need.
In Spain jobs are awarded on who you know. It's about who daddy goes shooting with, about the correct golf club, the tennis club. These guys stick together.
If you talk to the over 50% of unemployed young people in Spain they are bitter about this, but seem to accept it.
So if you we're IAG, would you bother? Run the operation from a civilized country.
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Old 10th Nov 2012, 23:45   #90 (permalink)
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IAG should continue to run IB as a flying club and allow it to lose money hand over fist. Because that is how everyone else regards IB. BA guys should work bloody harder, stop challenging their Spanish counterparts and have some sensitivity for those who don't live by the revenue/vanity and profit/sanity rule.

Welcome to today's world amigos. It's pretty shit. Maybe you should have been an air traffic controller instead?
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Old 10th Nov 2012, 23:55   #91 (permalink)
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Would any of those who have posted on this thread recommend aviation as a future career to their friends and family?

Last edited by newt; 10th Nov 2012 at 23:56.
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Old 11th Nov 2012, 00:48   #92 (permalink)
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Well, what a surprise. BA have being doing this for years, from right back when they were known as BOAC.

Take over a competitor, suss out the operation, work out how to change the operation to fit the BA business model, get rid of the people you don't need (asset strip) take over the routes you want, and voila!

If BA take you over either find a job somewhere else quick, or get shafted. Your choice, but they are the kiss of death and have been since Pontious was a pilot.
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Old 11th Nov 2012, 01:00   #93 (permalink)
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Neatly missing the entire point that BA haven't taken over Iberia. Do try to keep up. Now can you name any succesful airlines that BA have taken over that weren't going bust anyway? Cally? Bust. Dan? Bust. BMI? Bust. Brymon? Would have gone bust when Easy and Ryanair arrived. BRAL? See Brymon. CFE are the only example of a succesful airline bought out by BA.

Last edited by Hand Solo; 11th Nov 2012 at 01:01.
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Old 11th Nov 2012, 04:14   #94 (permalink)
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Guys, don't manipulate things.

Did BA hire thousands on a "BA express" while they cut those thousands of jobs?
Nooo. If you want to restructure, you fire people, ok, you cut salaries, ok. But you don't replace workers.

Litebulbs has got it right. You guys have STOCKHOLM SYNDROME.

Go find a shareholder and pledge loyalty to them, preferrably on your kees.

Iberia shareholders have been making profit for a long time.

IAG is a creature that was planned long time ago, as long as its alliance with BA. It took time and now it's a painful reality.

I have no doubt that without the merger, Iberia would be well off.

According to the terms of the merger, and according to the new laws in Spain, having losses allows IB to cut as many jobs as they want, and BA will gain the weight it needs to be "the winner" of the merger. With a captain making holes in the ship, the ship will sink. Then he says everybody bail out. Then he fixes the holes and hires slave sailors. Good bussiness.

Oh sorry but how could I think those horrible things of those wonderful people, the shareholders and the executives???
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Old 11th Nov 2012, 08:42   #95 (permalink)
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Executive pay at IAG, BA and Iberia

I would like to extend my sympathies for the Iberia pilots and other employees.

Are the Iberia and IAG executives going to be taking pay cuts as well ? Bet not.

Iberia still has quite a few middle managers, who are not efficient, no ?

Is it in the interest of the small Iberia and IAG shareholders that Iberia and IAG key executives make so money and receive huge bonuses for their restructuring efforts ? Anyone have the numbers on this ?

Do not agree with the naive notion that what is going is totally in the best interest of shareholders, the shareholders are secondary to the top executives getting their bonuses and reaching their objectives. Curiously if you were to look at the cost of pilots versus the key executives, its about the redistribution of wealth into the hands of a few and taking it away from many pilots.

The disparity between what executives are making today and 30 years ago compared to a pilot salary is what ? A huge difference.

Its time to realize that there is a pattern going on globally. As this appears to be a global trend, then one day. Lets get united, if they push too far.
As there will be nothing to lose.

Last edited by Jimmy Hoffa Rocks; 11th Nov 2012 at 08:47.
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Old 11th Nov 2012, 09:53   #96 (permalink)
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@Shannon volmet

BA have not taken over IB the two airlines are part of the same group.
As for the others you mention a awful lot of people at BCAL, including myself, did rather well out of it.
BCAL was within a week of not being able to pay its employees and we were taken on by BA on pretty much equal terms, and many still work for the company on decent terms and conditions.
IB should have properly restructured a long time ago and has made some efforts. But, what you leave late hurts more!
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Old 11th Nov 2012, 10:21   #97 (permalink)
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The best thing that can happen to Iberia is along the lines of what happened to Olympic Airlines being morphed into Olympic Air. Iberia needs to be effectively shut with a new Iberia being opened up overnight to replace it with a significantly more stremlined operation, with a smaller fleet and more simplified route network.

However it is unlikely that this is ever going to happen. Many Spaniards simply feel that Iberia cannot fail as it is looked upon as being part of the fabric that makes the identity of their country. The Unions will never allow Iberia to be restructured to such a large extent either. The harsh reality is Iberia is simply a business and a poorly performing one and no business can continue to trade indefinitely in such circumstances.

I have no doubt that without the merger, Iberia would be well off.
Not so, the government in Madrid has no ability to save Iberia nowadays. If there is no external pressure to restructure, then surely one could argue that an independent Iberia would be one with an even shorter life expectancy.

Last edited by Mister Geezer; 11th Nov 2012 at 10:43.
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Old 11th Nov 2012, 11:19   #98 (permalink)
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I have no doubt that without the merger, Iberia would be well off.
Based on what evidence? IB haven't turned a profit in 5 years and they're running out of cash fast.
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Old 11th Nov 2012, 11:27   #99 (permalink)
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The bureaucracy in Mediterranean countries is frustrating and operating into Spanish airports is a nightmare. Everyone knows this basic feature of those countries blessed with warmer weather. Things are far, far better in Britain - as any pilot will tell you; as any person wishing to sign up for new domestic services will tell you - but you have to go into Northern Europe to find a sensible approach to efficiency. In Britain it's all about rules, rules, rules at the expense of common sense. I prefer the Dutch, German or Scandinavian approach.
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Old 12th Nov 2012, 02:08   #100 (permalink)
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At the end of the day it's not very complicated , you either produce or perish , if IB cannot produce a ROI for it's stakeholders then it's goom bye.

The blame game and union strikes at many world airlines , faced with the same situation , did nothing but worsen the final outcome for their employees.

The Golden Age of Aviation have long past.

Last edited by tsgas; 12th Nov 2012 at 02:10.
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