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Iberia to Lose 4500 jobs - 25 airframes

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Old 16th Nov 2012, 07:53
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The real skill is managing the resources you have to make profit. Reducing costs is one thing and reducing salaries quite another. Slavery would also be very useful to reduce costs. IAG lawyers are exploring the possibilities and are already lobbying in Madrid (only).
IB have made losses for five years, the worst of them before IAG even existed. The economic situation in Spain is worsening. How many 'unskilled' managers do you think IAG should go through, all failing to make a profit with the resources they have, before you realise that you can't make a profit with the resources you have and have to change the resources? You've probably got two years left at the current cash burn rate before you go bust.
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Old 16th Nov 2012, 07:58
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Nice post microburst, but irrelevant. And also not true about 'payback' - you profited heavily before 'crisis' - it actually contributed to it.
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Old 16th Nov 2012, 08:17
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"For the willie walsh fans that like to cook books, its not the routes that ba had, its the routes that ba has developed and ib misteriously has stop doing even after being profitable."

I am not a "willie walsh fan" and I apologise if this point has already been made but you are aware that Iberia generate revenue from routes they don't fly, aren't you? As do BA?

What do you suppose is Iberia's highest revenue route? London - JFK. A route flown by BA but on which Iberia has a code share. Code shares, as I guess many have forgotten, means money.

IMVHO it is crazy to suggest that passengers are being diverted from Madrid into flying to South America (say Buenos Aires) via London. Only in the barely profitable lowest fare end of the market would a passenger decide to do this (fly from Madrid to Buenos Aires via London) unless Iberia is so uniquely awful that no high end paying passenger wants to fly with them.

Moreover, the London route was made possible only because of the Iberia code share.... from which Iberia generates revenue.

I think, even leaving aside Spain's rapidly deteriorating economic outlook, one of the problems for Iberia is that if some of your most profitable routes are routes that you don't even fly, then your cost base is almost certainly going to come into question.

IMVHO.

Last edited by OverFlare; 16th Nov 2012 at 08:18.
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Old 16th Nov 2012, 08:46
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Oh dear B&B, where to start?

The trouble for IAG and thus BA and Iberia is that the bigger a legacy carrier gets the more it is exposed to the downward pricing pressure of the low cost and Middle Eastern carriers.
Can you justify this claim? LCCs don't operate an interconnecting hub and spoke model. Mid-East carriers only compete on a small proportion of routes with a small proportion of transfers. There is relatively little competition from Mid-East carriers for O&D traffic becase not that many people want to go to Qatar, or go London to Narita via DXB.

That is all IAG has achieved in real terms for BA and Iberia - greater risk and greater exposure. Profit is the reward for risk but this is not guaranteed when combined with stupidity, hubris and airlines. There were very few 'efficiencies' to be had and those that existed were superficial - they only served BA in my opinion.
Better fuel purchasing, more secure access to capital markets, cost saving in joint markets, more leverage with aircraft manufacturers, staff savings in duplicated business areas, coordinated schedules to provide more flexible services and reduce choke points at outstations. All benefits you seem to have missed.

I am sure BA pilots will claim that Iberia gained greater exposure to London passengers - whoopee do - anyone who thinks this is great is still living in the 80s.
I don't think I've heard a single BA pilot claim this. I don't think IB have a sufficently strong brand or service record in the UK to pick up anything but the more most bargain basement transfer fares from the UK. KLM-AF have a perfectly good LatAm network and with abundant UK connections are the carrier of choice for those I know who need to fly indirectly to South America.

It's a mass market, not a niche market and certainly not a quality market - a negative thing for Iberia on the basis of my first sentence above. It has allowed BA to re-deploy aircraft, crews and slots on to their more lucrative long haul market whilst gaining cheaper route sharing to South America - Iberia are being used.
Which aircraft have been redeployed to long haul? Airbusses? Which crews have have been redeployed? Are you even aware that BA has increased direct services to LatAm? GIG and EZE direct instead of shuttling through GRU? These ideas of your don't seem to have any basis in fact whatsoever. The major driver in BA's long haul growth is the acqusition of bmi, which has an impact an order of magnitude greater than cancelling the BA nightstop service in Madrid.

IAG may well be 'just a holding company' but it is (for the time being) being run by BAs ex chief. Iberia are being used to service and benefit BA where they can. What happened to Iberia's huge cash reserves? What happened to BA's pension deficit?
Oh I missed this treasure on the first pass. IAG is run by an Irishman who hasn't demonstrated any particular love for BA, or Aer Lingus for that matter. Notwithstanding the lack of any evidence that IB are being used to service BA, the answer to your other two questions are easy to find. IB's cash went on servicing debt, early retirements and running big losses. BA's pension deficit is still there. You don't think someone would have spotted BA plugging a billion quid into the pension fund unepectedly?

Ultimately Iberia as it is, is in a bad place. It's crews are over paid, probably under used and illogical in their union stance - though I imagine this is a method of pegging.
Finally something we agree on.

Crews aren't a big cost though when compared to fuel, fleet, slots, unused load factor, debts, brand, it's home nation and depreciation.
They are, however, one of the few costs the company can directly control.

Iberia crews will need to adapt if they wish to stay flying for Iberia in Spain.
Indeed.

I feel pretty much the same about BA. If BA crews believe they are going to maintain their current Ts and Cs, lifestyle or image they, I believe, are sorely mistaken.
No sh*t Sherlock! You've made your opinions about BA clear on here many times, and it's pretty clear that you're not a boned up on BA, it's staff or it's costs as you posts suggest you think you are.

I think they are extremely cheeky to be coming on here giving it the big 'I am' on PPRuNe about how Iberia pilots are so expensive when one of their colleagues messaged me saying I'm 'a loser' because the 900 hours a year I fly for a big LoCo equates to 1500 duty hours whilst the 750 hours he or she flies a year equates to only 900 duty hours a year - all the while (s)he is paid more. You're less profitable, more expensive and apparently less efficient. Do the maths.
I'd be highly sceptical of those hours claims if I were you, unless you believe he's the most work-efficient pilot in BA and is never delayed anywhere.

Last edited by Hand Solo; 16th Nov 2012 at 08:51.
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Old 16th Nov 2012, 08:54
  #165 (permalink)  
 
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Having lived in Madrid for a number of years and travelled frequently to and from London - there is always a huge amount of passengers on both IB and BA flights between the hubs that are connecting onto flights to central and south america. It obviously seems that this is now also the case going the other way. IB's service to north america has always been poor with only ever one or two flights a day to the NY so they are obviously filling the planes up going to LHR as well. They also no longer have competition on the route and have kept the full fares very high since BMI pulled out of their half hearted attempt to serve the route back in the mid 2000s (which they used to do with many routes).

I am sure that the SA network will always be a good source of income, and indeed BA even dropped certain direct routes when they went down the code share route with IB - such as Bogota and Caracas. So the codeshares work both ways.

The main problem with Iberia has been and still is resistance to change with the workforce, and the decimation of their domestic market by the low cost airlines and more recently by the opening of the AVE rail line between Madrid and Barcelona. When you can get on a train in Atocha and get off in Sants in not much more time than it takes to get from the centre of both cities to the airports and get through security etc - it is easy to see why these days an IB aircraft is seldom seen in BCN. To put the blame for all of this as BA's door is a plane farce of Christina Fernandez de Kirchner proportion.
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Old 16th Nov 2012, 08:57
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I removed my post because it just isn't worth having an opinion on pprune!

As for the person claiming those hours - it's someone with the name goldcup on here - if they're not in your private forum then I'll guess they're are a dreamer and if they ARE in your private forum they are a liar - I have the PM.
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Old 16th Nov 2012, 09:02
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NO. It means that importing indonesian shoes in UK should be heavily taxed
This type of thinking demonstrates the selfish short-termism that has got Spain into such deep financial difficulties.
The policy of not addressing the problem, but blaming someone else and then using national protectionism to remedy the fault.

The customer will choose which flight / airline based on price and service.
Which is a dilemma for IB!

I predict that IB will not exist in 5 years.
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Old 16th Nov 2012, 11:28
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A Unions job is to try and protect the jobs and privileges of its members

I can understand why they are bent out of shape but I don't think anyone in this business expects things to continue as they did in the "Golden Age" before privitisation, LCA's and the rise of the Mid East carriers
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Old 16th Nov 2012, 19:13
  #169 (permalink)  
 
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Stick together...

All,

It has been a long time since I posted on PPrune but feel it necessary to contribute given my current role as British Airways Company Council (BACC) chairman.

I first met SEPLA-Iberia leaders in Washington 6yrs ago during a series of meetings brought about by the AA-BA-IB trans-atlantic JBV that concluded in our 3-way protocol document between APA(AA union), SEPLA-IB and the BACC(BALPA). We have continued to meet regularly since then to exchange info and maintain the relationship, and in particular with SEPLA since the BA-IB merger was introduced when we took our protocol documents and relationship even further. I fly out on Monday to Madrid to meet with SEPLA-IB.

BA pilots and BALPA are not the enemy. As I expressed at the SEPLA-IB members meeting in Madrid last Dec 2011, BA pilots are not after Iberia pilots jobs and we respect your agreements. Whilst we are prevented legally from direct action in support of your cause, we continue to try and influence the BA-side of the IAG board when possible to find a peaceful means to end this divide. During your last IA we managed to prevent BA from increasing capacity between LHR-MAD even though legally our hands could have been forced and have sent the same message to the board ahead of any unrest this time.

In my capacity as BACC chairman, I also attend the Oneworld(OCCC) pilots meetings. We have pushed for a Oneworld newsletter to be published and hopefully the first edition will be arriving within the next couple weeks. Why is this important? The industrial reports from all legacy pilot groups within Oneworld read like a magazine of aircraft accident reports. Qantas pilots going from 24 x 744's to 6 over the next few years. AA in chapter 11, and at best will emerge with their pensions closed, double the number of regional jets to be flown by American eagle. JAL pilots with pensions halved and pay cut 30% if not one of the ones sacked on age or attendance records. Malev gone completely. etc, etc.

The matter is much bigger than IAG or even Oneworld, let alone to dismiss the problem as a BA vs IB problem. Our industry is now facing the sorts of "creative destruction" internationally that once re-wrote the US aviation national landscape during their "de-regulation" days. I would like to simplify it as "union-busting" but even that would be inaccurate.

The singularity defining industrial representation these days is to ensure when striving to fulfill the “wishlist” of the members, that the medium/longterm interests of shareholders do not make it necessary for the board to endorse mgmt to take you on, or start afresh. Much as union leaders would like it, negotiated outcomes are not simply the median of two starting points set in a financial vacuum.

BA pilots T&C's have suffered over the last decade through a series of evolutions, none of which were popular or taken without abuse from "hardliners" in our membership. Whilst I would like for the union to take all credit for the current survival rate of BA pilots, the fact is the economic background supporting BA's business has been just as much, or more a factor in our ability to survive as our adeptness to adapt. I have every reason to believe had BA's market felt the same level of disruption as that experienced by Iberia, we also would be at a war footing with BA.

We are under no illusion in the UK that there are board members in IAG that would equally like to outsource BA pilots as IB pilots, and they expressed as much when the opportunity to start afresh with the BMI sale arose just prior to last Christmas. We silenced such hawks by offering painful SH productivity changes and annual cash savings amounting to £10m/yr. This in addition to other more substantial changes in 2006, and in 2009.

The fact is the only opportunity for upstream cashflow in IAG is in the form of dividends and IAG has not yet issued any of those. Our own leaders in BA are not even allowed to cross-subsidise money/profits between distinct business units within BA, let alone across airlines. Our LGW pilots suffered changes in order to become profitable in their own right; apart from any LHR profits. BA LHR SH pilots suffered prod changes that we were only marginally successful in having being shared by BA LHR LH pilots. It is arguable whether any cross-subsidies will stand up long-term or will be discounted/forgotten come the next business plan.

Our industry is no longer the nationalised entities they once were. 40% of BA's profits are from flights not operated by BA pilots, the same is true of nearly every legacy pilot group. Our Scope clauses seem almost irrelevant under the new business regime. But lets not cut our noses off spite our face, joint businesses, mergers, etc have all delivered money into our firms and in BA has the potential to deliver annually half of the record profit BA ever announced several years back. As I said to our suspicious union colleagues elsewhere, that doesn't mean that such money will flow to our pilots, but I personally would rather be negotiating with a company making a billion a year than losing a billion.

When events settle in Madrid, a new low-cost comparator in IAG will have been established. The same IAG board members that saw BMI as an opportunity to start fresh at LHR with their preferred hybrid LCC SH feeder(i.e. Vueling) for all European IAG LH operations will be calling Keith Williams to prove that keeping to the premium SH business model has worked and is worth keeping. Believe me, BA pilots take no delight in events in Madrid.

When asked about moving from the principle of keeping pilots in the same company on one contract, I often reply that the first priority is to keep pilots in the same company. T&C's are only as valuable as they are sustainable and that means continued recruitment. Without which the unit costs drift higher with our median age and time to command.

I trust we will have a good meeting on Monday with the SEPLA-IB pilot leaders who I know have personally sacrificed a great deal to defend IB pilots careers and aspirations in very difficult circumstances. BA pilots continue to respect the career aspirations and agreements of IB pilots and my only wish was that human rights legislation had moved as quickly as the legislation dictating the freedom of capital movement, so that we would be free to do more. In the meantime, let's not feed the vultures through fruitless fighting amongst ourselves. We have more in common than any other legacy pilot working group in the world, and just as much to lose.

Kevin Judkins
BACC chairman.

Last edited by airrage; 16th Nov 2012 at 19:19.
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Old 17th Nov 2012, 10:26
  #170 (permalink)  
 
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Don't forget....remain neutral! A strong IB = A strong IAG (combined with a strong BA) = job protection for all your members.
Will it be long before the boys from blighty are answering a call to arms, venturing into continental Europe in order to help a mega corp in its fight for survival?
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Old 18th Nov 2012, 01:22
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Reading some of the atrocious comments re the crew on Skytrax and IB's ranking especially when one compares it to BA I am surprised IB lasted as long as they did and this reorganisation could well be the change that they so sorely need.

IB was voted in the top 10 worst airlines of the world.


I am appalled by some of the comments of our Spanish members here and would dread to think they were actually crew.

There surely must be some good and decent crew at IB and I do feel for them and the future that they are facing.
Last edited by cldrvr; 15th Nov 2012 at 21:33.
Depends on what a guy like you thinks of decent. I suppose most of ib crews are not gonna share your view of decency, and most of major airline pilots in the world either.

People like us actually care about customers, passengers, fellow employees and then.... Profit.... In that order, not the "decency" order you would assume.

Omnipresent

There is no need to cook any books, when the CEO is doing every effort to make the airline lose money!

I can make BA lose money from tomorrow morning if you appoint me as CEO and I can make a profit out of it.

In 2015 the distribution of the board between IB and BA will be determined based of the relative size of both companies.

Is it a coincidence that just after the merger IB is in a deadly spin, when it was quite OK before it took place?

According to you, guys, IB workers deserve what they are having because they are spanish, basically. It is a miracle that IB lasted so long. (Just until the merger, pheew...)
Bingo.

People in this thread are either company fanboys or very simplistic broad general audience that will believe what any company tells you.

Its really easy to pass the cargo haul of the johannesburg line to Ba, and then claim it unprofitable, pass this line to ba, hence get rid of airplanes and then justify cutting jobs.

Thats also cooking books, and it is also a waste of time trying to explain this to certain pro-company, pro-benefit individuals.

Dont try to teach a pig how to sing, you'll waste your time and the pig will get angry. ( my salutations to the portuguese, irish air lingus guys and the greeks , this doesnt go for them )

Last edited by dlcmdrx; 18th Nov 2012 at 01:35.
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Old 18th Nov 2012, 07:05
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The problem you failed to have grasped is that if you don't make any profit you can't care about customers, passengers and fellow employees for very long as you'll go bust. Simple.

You're still fooling yourself that Iberias woes are down to handing over the MEX and JNB routes to BA, neither of which are true. If you could make money on JNB and MEX you'd still be flying them. Still, I notice the subtle change in your post that now it's the cargo thats gone to BA and not the passengers according to your ever-changing list of accusations.

Last edited by Hand Solo; 18th Nov 2012 at 07:06.
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Old 18th Nov 2012, 08:00
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People like us actually care about customers, passengers, fellow employees and then.... Profit.... In that order, not the "decency" order you would assume.
People in this thread are either company fanboys or very simplistic broad general audience that will believe what any company tells you.
And these fanboys and simplistic audience voted for you as one of the worst airlines. Take a reality check at last. If customers say you're doing poor job, then it means you're doing poor job, even if you think otherwise. Saying 'but we care about customers' makes no point in this case.
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Old 18th Nov 2012, 19:15
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There's an Iberia A330 parked at Heathrow T5C tonight. Imagine the hysteria from some contributers on this thread if a BA777 turned up at Madrid or Barcelona........
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Old 18th Nov 2012, 19:23
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The Iberia A340 flies to LHR every day as the IB3166.

BA Don't fly 777's to MAD but 767's.
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Old 19th Nov 2012, 03:02
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very simplistic broad general audience
AKA "the travelling public." God forbid they have an opinion on what airline to fly.
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Old 19th Nov 2012, 11:18
  #177 (permalink)  
 
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Lets face it - none of us has any job security anymore - the cost of entry for the LCA's is low and there is always someone willing to fly for less than the guy currently holding down a flying job (either upfront or as CC)

It's been coming for years and anyone who is surprised must really have been living in cloud cuckoo land

I don't think the managment of most airlines is very good but I'm sure they'd LOVE to go back to the days of revenuse sharing on routes and the old IATA cartel and the good pay packets paid to pilots in the past

The trouble is the world has changed and keeps changing - you either recognise this and adapt (however painful) or you sit and complain about the unfairness of it all - and that doesn't do any good at all
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Old 20th Nov 2012, 00:27
  #178 (permalink)  
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You've just had an input, identified, from the chairman of the BACC. An input that addresses many of the points raised on this thread, from an identifiable, named individual with "skin in the game."

Is it perhaps an indication of why, despite still being a named moderator on this forum, I no longer take an active interest in the debates simply because such an input has generated exactly no, none, nil, nada comment?

I've just read ten pages of some rationality, but mostly misdirected idiocy at best, and the majority propaganda at worst. Then you get an actual input from someone with skin in the game putting his name to it, and no one even feels it worth commenting on?

Is that what this website has fallen to? Is it merely factions debating without knowledge, is it merely opinions without substance? I admit, since the takeover by the American owners, and their attitude to indemnifying moderators I now merely watch, and don't moderate any more, but this takes the biscuit.

All of you. Get real. Read this forum for what it is, take the best out of it and run with it, ignore the idiots with their polarised opinions, but for the sake of whatever deity you choose to believe in when someone with some with weight behind them, who puts their name to it, and who will back it up and defend it comes on here and posts, for the love of that deity respond!

This forum used to be like that. It isn't any more, it has been hijacked, in the main by points-scorers and trivia-majors. The voices of reason struggle to be heard at the best of times, but there is one right above you.

Use it. That is not rhetoric, that is the reality of how the debate is playing in the real World, from one of those actually doing it, not just talking about it. If you can't see that, then maybe you should go somewhere else and debate, because your input is not , let's face it, really worth it.

That's all I have to say, this is the single simplest example of how this forum will live or die. If it dies, it is not because I, and the other moderators haven't tried over the years, it will be because we have been let down by the posters, first and foremost, because they simply cannot grasp the nettle. And the owners, with their crass disregard for indemnifying a second. You the posters have always came first.

Ten pages I've just read, only about 40 posts were worth the effort. The one above from Airrage trumps them all, but you can't be bothered to see that. And it actually, as is a rarity on this thread, has something relevant to say.

Why do I bother?
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Old 20th Nov 2012, 09:30
  #179 (permalink)  
 
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airrage/KJ's post is indeed a good one and I heartily endorse it -

he of course is looking forward whereas a lot of the posters on here are desperate to vent their rage/disappointment somewhere - or anywhere

raving at the storm isn't very useful but it does help you get it off your chest......
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Old 20th Nov 2012, 10:15
  #180 (permalink)  
 
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I often find that a really good post does shut everyone up for a while. It's almost like a slap round the face by reality which knocks them out of their stupid petty arguments.
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