Iberia plans up to 5,000 temporary lay-offs

Spanish carrier, Iberia has called all of the company’s trade unions together to discuss the measure, as uncertainty regarding the continuation of the Spanish government’s wage subsidy assistance to the sector increases.

As airlines conclude a somewhat successful summer season since the global pandemic began, the Government of Spain is now trying to evaluate how the industry has performed. The Spanish government hopes to determine how the aviation sector will adapt to a post-Covid scenario, where there may still be worldwide restrictions, but hopefully, a situation that requires little or no intervention from the national government.

So far, the Spanish flag carrier has been able to maintain most of its 15,200 workforces with the so-called “Force Majeure ERTE’s,” a temporary government-backed employment retention program. The scheme allowed companies to pay a small percentage of their employees’ salaries while the rest was paid for by the government. In particular, the possible exclusion of the airline sector from such a support mechanism has prompted Iberia to discuss other options to “safeguard” as many jobs as possible, the airline expressed.

The alternative would come in the form of an “ERTE ETOP,” a collective procedure that involves temporary contract suspensions, as well as significant reductions on working hours (based on “organizational and productive reasons”).

The measure could affect around 35% of the workforce, or up to 5,000 employees, which was announced by the Chairman and CEO of Iberia, Javier Sánchez-Prieto during the 75th anniversary of the first flight between Madrid and Buenos Aires.

Ironically, Iberia also expects a 35% loss in capacity for the rest of the year compared to pre-pandemic levels. This is mostly due to the restrictions on many international routes to the United States, Latin America, China and Japan, which contributed heavily to the company’s finances.

In an effort to reach an agreement, the company has invited trade unions that represent its ground staff as well as union representatives for the pilots and cabin crew. The company has insisted on the idea of debating different alternatives just in case the wage support scheme is not postponed until the very end of this year, a demand that the aviation and the touristic sector is passionately urging the government to accept.

Iberia has stated that during the summer was operating at around 65-70% of its pre-Covid capacity. On the other hand, the company is confident it can reach pre-pandemic levels by the following summer when most international travel restrictions will be eased and hopefully airlines will see the return of the so-called “business traveller.”

During the first semester of the year, IAG recorded a loss of €2.04 billion, way below the €3.81 billion that was recorded for the same period last year. Nonetheless, any suspicion on tapping investors for further funds was dismissed by Luis Gallego, the CEO of the group.

In an interview with the Sunday Times, Mr Gallego expressed some interest in the low-cost airline EasyJet, when asked about a merger with some executives, The Chief Executive stated that the International Airlines Group (IAG) is continuously evaluating different options.

Source: https://aeronewsx.com/iberia-plans-up-to-5000-temporary-lay-offs/