Home Local News Iberia dropping direct Spain-PR flights
Issued : Saturday, December 8, 2012 10:25 AM
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Iberia dropping direct Spain-PR flights

By CB Online Staff

Iberia Airlines announced Friday it is suspending direct flights between Spain and Puerto Rico as part of broader service cuts in Europe, Latin America and the Caribbean in the coming months as it scrambles to stay afloat in a sea of red ink.

The Spanish carrier will continue to connect Madrid and San Juan via Miami after the direct flights to the Puerto Rico capital are halted this spring.

Iberia is also suspending Caribbean flights to Havana and Santo Domingo as well as service to Athens, Cairo and Istanbul. Direct flights to Montevideo are also being dropped, but the carrier will continue to connect Spain and the Uruguayan capital through Miami.

The move will leave Puerto Rico with just one direct connection to Europe – twice weekly Condor flights between San Juan and Frankfurt. Iberia’s sister airline, British Airways, announced last month that it will suspend its direct flights between the England and Puerto Rican capitals in March, less than two years after the direct service was resumed.

Parent company International Airlines Group warned last month that Iberia was “in a fight for survival” and unveiled a restructuring plan to cut 4,500 jobs as it reported a drop in third-quarter profit.

Iberia CEO Rafael Sánchez-Lozano said the carrier is losing money in all its markets and was “burning $2.17 million every day.”

“Iberia has to modernize and adapt to the new competitive environment as its cost base is significantly higher than its main competitors in Spain and Latin America,” he said.

IAG, which was formed in early 2011 by the merger of British Airways and Iberia, has given the Spanish unions a Jan. 31 deadline to reach agreement on the job cuts. If one hasn’t been reached by then, the company warned there will be deeper cuts and a more radical reduction in Iberia’s operations.

The proposed job cuts would shrink Iberia's payroll from 20,000 to 15,500 and its capacity by 15 percent. The company will suspend non-profitable routes, shed 25 aircraft and adjust salaries.

The carrier said Friday it was eyeing expanded long-range service to strong markets including Brazil, Mexico, Miami, Central America, Chile and Ecuador. It is also looking at expanded its short-route service to Londen, Casablanca and other African destinations.

Sánchez-Lozano said Iberia’s problems predated the financial crisis in Spain and Europe and are systemic.

For the three months to Sept. 30, IAG reported a net profit of $302 million, down 11 percent from a year earlier. Revenue was up 11 percent but expenditure on operations increased by 14 percent.

Puerto Rico officials have been caught off guard by the flight cuts by the European carriers.

Outgoing Ports Authority Executive Director Jaime López Díaz told CARIBBEAN BUSINESS online in late November that he didn’t expect Iberia to drop direct service to the island from Spain.

López said British Airways has asked the Puerto Rico government for a proposal to again resume the service sometime in 2013.

The Associated Press contributed to this report.

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