International Airlines Group has issued a statement saying that it has opted to accept a proposal put forth by a mediator regarding its Spanish airline division Iberia.
The statement read: "The board of International Airlines Group has met today in an extraordinary session to analyse and assess the proposal issued by a mediator regarding Iberia. As a result, the board has decided to accept the proposal."
According to a news article published on Reuters news website, the mediator proposed that the Spanish airline cut 3,141 jobs rather than the 3,807 that the airline had planned to let go. The proposal also reportedly entitled those subject to the lay-offs with severance pay of 35 days per year worked, rather than 20.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It remains unclear whether the Spanish airline unions will accept the proposal as they have previously rejected a series of job cuts packages put forward in the past six months.
However, an indication of their response is expected over the coming hours and days as Reuters reported that the mediator is scheduled to meet with worker representatives on Monday.
The developments follow a series of strike actions which disrupted more than 1,000 flights over the past fortnight.
In the six months to June 30th 2012, Iberia made an operating loss of €263m, working out at approximately €1.0m in operating losses per day.
In IAG's half-yearly results for the six months to June 30th, Willie Walsh, IAG Chief Executive Officer, commented: "There remains a stark difference in the performance of our subsidiaries. British Airways made an operating profit despite rising fuel process while Iberia's losses deepened."
"Iberia's problems are deep and structural and the economic environment reinforces the need for permanent structural change," he added at the time.
Last year, Iberia presented the union with a proposal for cutting up to 4,500 jobs and reducing pay for some staff by between 25% and 30%.
MF
-
Shein shifts IPO focus to Hong KongThe development piles fresh pressure on London’s beleaguered stock market, which many had hoped would be boosted by Shein’s IPO
-
Scientists turn lead into gold – could it wreck the yellow metal's price?Medieval alchemists have been vindicated after scientists turned lead into gold, but the results aren’t going to crash the gold price any time soon
