A new strategic plan for Iberia to alleviate the adverse circumstances

CapitalMadrid.com published yesterday a very interesting analysis on the Madrid airport current situation, where they highlight the decrease of easyJet and Ryanair. Ryanair reduced passengers by 32% and easyJet by 40%, being 14% the overall decrease for the airport between January and August.

Iberia—the main operator—and Iberia Express together lost passengers by 19%. Struggling to overcome the current circumstances they keep facing problems with pilots and are working on a new medium-term strategic plan for Iberia.

IAG aims to reduce costs at Iberia to make it competitive, above all in the long haul. As for the short and medium haul they will use Iberia Express and Vueling which keeps growing. Iberia Express is stuck by an arbitration award which affects the crew costs.

Now, while the Minister for Industry regrets some of the effects from the merger with Bristish Airways and after a restructuring plan which included nearly 3,150 layoffs and salary cuts by 14%, they are working on the third strategic plan for Iberia within one year and a half.

Madrid airport depends, above all, on the business traffic, clearly affected by the financial crisis. Although not so much, it also affected the drop of visitors to the city in a record year for the foreign tourism.

The airport figures have not grown since 2010, when they increased by 3%. Thus, the backwards trend was already notable before the restructuring plan of Iberia started. Last year, Madrid served 45.2 million passengers, decreasing by 9%. In 2011 the drop was by 0.4%, with 49.7 million travellers. What is significant is the fact that this decline has accelerated so far this year with a drop by over 14%. This has led to situations that would have been unthinkable some years ago like the fact that Barcelona airport beat Madrid for the first time ever.

In spite of the fact that this is a circumstantial scenario, the industry is really concerned about the Madrid airport situation. In fact, this afternoon, finanzas.com informed that Iberia supports the committee which Madrid airport is creating to improve its situation. This committee is to be composed of the Ministry of Development, the Autonomous Region and the City Council. Iberia would be willing to be a part of the committee too.