MAD T4 Taken By IB Workers, Chaos Expected

LHRFlyer · Tue Mar 05, 2013 9:19 pm

Quoting UALWN (Reply 42):
So the (Spanish) management of IB reached an agreement with labor, which was then overturned by WW and his team at IAG. And this is the reason for the current "anti-British" (actually, anti-WW and his mostly ex-BA team at IAG) sentiment.

Did whatever was agreed between Iberia management and the unions actually meet the savings target? If it did why an earth would IAG turn it down?

And SEPLA has been peddling lies and mistruths for months and months to generate anti-British/BA sentiment (BA "stole" the JNB route from Iberia, Iberia funds are being use to plug the BA pension deficit etc). All lies and all comprehensively rebutted.

Quoting icaro (Reply 46):
Please check who bought BMI, IAG or BA? Which company is getting the profit of the operation, BA or IB? You can say that both companies benefit as far as they are part or IAG; but the truth is that BA will make a profit while IB only puts the money. And later this will be used to show how well BA performs and how bad IB does.

IAG bought bmi. Yes, it has been integrated into BA. However, there were individuals in IAG (not Willie Walsh) who were strongly arguing that bmi should be kept separate from BA as "BA Express" type operation. In return for integrating bmi into BA the pilots had to make productivity concessions and BA now has some very demanding targets to make its short-haul operation profitable on a standalone basis over the next few years, much of which will inevitably have to be funded by staff productivity improvement,

BA is by no means being given an easy ride by IAG.

[Edited 2013-03-05 13:24:32]

Redd · Tue Mar 05, 2013 9:32 pm

Quoting Gonzalo (Reply 39):
you need to ask your self "what am I doing wrong".

I agree, but once again it's up to Management to 'Manage/Lead' and create a working environment for employees to be happy. That will in turn make for good customer service.

"You don't lead by hitting people over the head-that's assault, not leadership." -General Dwight D. Eisenhower

Gonzalo · Tue Mar 05, 2013 9:40 pm

Quoting AR385 (Reply 45):
And of course the Spanish government will come to IB´s help. Spain will never allow itself to loose direct connectivity with "the colonies".

Although I completely agree with you regarding the main issue ( the Spanish government will never allow IB going belly up ), I wonder where on Earth they will get : 1.- Political support for an "airline rescue" under the current economic disaster they are facing, and 2.- The money !!!

Rgds.
G.

UALWN · Tue Mar 05, 2013 9:54 pm

Quoting summa767 (Reply 44):
In the press release below, IB stated how IAG's board was made up: Board members now consist of six people with Spanish nationality, three Britons, two from the United States, one from Ireland, one from France and one from New Zealand

But the board (as most boards) just rubber stamps what the CEO proposes, so its composition is mostly irrelevant.

Quoting summa767 (Reply 44):
I am not surprised that some people make up their own facts to justify blaming IB's troubles on Spain's historical rivals.

You are the only one who are bringing up this anti-British crap. It just does not exist. How many times does this need to be repeated?

Quoting summa767 (Reply 44):
Lack of rigour is commonplace.

Indeed...

Quoting LHRFlyer (Reply 50):
Did whatever was agreed between Iberia management and the unions actually meet the savings target? If it did why an earth would IAG turn it down?

You tell me...

LHRFlyer · Tue Mar 05, 2013 9:57 pm

Quoting UALWN (Reply 53):
You tell me...

Because it didn't meet the target set by IAG.

Summa767 · Tue Mar 05, 2013 10:09 pm

Quoting UALWN (Reply 53):
But the board (as most boards) just rubber stamps what the CEO proposes, so its composition is mostly irrelevant.

And the CEO is Irish! How many times does this have to be repeated!

Quoting UALWN (Reply 53):
You are the only one who are bringing up this anti-British crap. It just does not exist. How many times does this need to be repeated?

Of course it does exist. I have seen the pictures, of "British go home on screens and placards, heard the interviews, read teh tweets, seen the UK flag with the pirate signs on top. And there are a few people misconstruing facts to make it look as if BA is bleeding IB. The anti-British sentiment is plain clear. No point in you denying it.

Icaro · Tue Mar 05, 2013 10:27 pm

Quoting Redd (Reply 51):
I agree, but once again it's up to Management to 'Manage/Lead' and create a working environment for employees to be happy. That will in turn make for good customer service.

I could not agree any more.

Quoting LHRFlyer (Reply 50):
IAG bought bmi. Yes, it has been integrated into BA

And why didn't they buy it with their own money? Why did IB have to spend much needed cash in financing something that will only benefit BA? Why does IB have to finance all its expenses with their own money, why can´t they just use IAG's money as BA does?
Is that fair play?

U2380 · Tue Mar 05, 2013 10:59 pm

Quoting icaro (Reply 56):
And why didn't they buy it with their own money?

Because they don't have their 'own money'. Its the same company and the Iberia side of the company is decimating the profits that the BA operation is making. It's all just central reserves of money that happen to be associated with one side of the company.

Icaro · Tue Mar 05, 2013 11:07 pm

Quoting U2380 (Reply 57):
Because they don't have their 'own money'. Its the same company and the Iberia side of the company is decimating the profits that the BA operation is making. It's all just central reserves of money that happen to be associated with one side of the company.

They are two different airlines with their own money that happen to be owned by a parent company called IAG. They are two separate entities with their own resources, expenses, operating margins, etc...
Central reserves of money that happen to be associated with one side of the company??? I beg your pardon?

LHRFlyer · Tue Mar 05, 2013 11:19 pm

Quoting icaro (Reply 56):
And why didn't they buy it with their own money? Why did IB have to spend much needed cash in financing something that will only benefit BA? Why does IB have to finance all its expenses with their own money, why can´t they just use IAG's money as BA does?
Is that fair play?

Because BA has no authority to buy another airline. Those decisions are made by IAG. BA, like Iberia, is merely an operating subsidiary. There's no evidence that Iberia's cash reserves were used to fund the purchase of bmi. Like Iberia, BA has to fund all of its investment from its own resources and is responsible for raising its own finance.

BA has not been handed expansion via bmi on a plate. It has had to present a business plan that it can make its short-haul operation profitable to justify integrating bmi into BA, which will mean significant cost savings. As I said above, BA is not being given an easy ride by IAG and there were some very strong voices that bmi should have been kept separate as "BA Express".

The cold hard reality is that Iberia is bleeding money and if it wasn't for the backing of IAG it would have gone bankrupt by now.

U2380 · Tue Mar 05, 2013 11:50 pm

Quoting icaro (Reply 58):
They are two separate entities with their own resources, expenses, operating margins, etc...

They operate as subsidies of IAG, neither are listed individually on stock markets and their financial performances are not reported as separate entities, merely as a breakdown of IAG's overall financial performance. Each have cash reserves as part of their operation within IAG.

BestWestern · Wed Mar 06, 2013 12:11 am

I am someone who is working harder for less money in the same company to ensure survival. I am also paying higher taxes. Welcome to the recession. I also worked for an airline during 9-11 where we took a voluntary 10% paycut.

This conversation has become stupid. Iberia staff seem to think that BMI is the reason why Iberia is looking for paycuts from them. BMI or not, IB would be losing 3m a day.

Stop muddying the issues. The longer the strike continues, the more IB will need to cut to survive. The company cannot afford to pay the salaries you are seeking.

UALWN · Wed Mar 06, 2013 12:16 am

Quoting summa767 (Reply 55):
And the CEO is Irish! How many times does this have to be repeated!

Why is that relevant?? He could be from Burkina Faso for all anybody cares! He was the CEO of "British" Airways! That's the "British" the IB guys are angry with. It's really not so hard to understand!

Quoting summa767 (Reply 55):
The anti-British sentiment is plain clear. No point in you denying it.

Anti British...Airways! Come on. Who holds a grudge with mom and pop in the East Midlands? It's ridiculous.

RyanairGuru · Wed Mar 06, 2013 1:57 am

Quoting UALWN (Reply 62):
Anti British...Airways!

Well if that's the case then maybe they should be more clear.

From where I sit - far removed from this jingoistic xenophobia - Mr and Mrs Smith in Sunderland aren't going to see "British Go Home" and the British flag being defaced on the nightly news and think "oh, well they don't mean us. They're referring to the senior management of a company incorporated in Spain"

Quoting icaro (Reply 56):
Why did IB have to spend much needed cash in financing something that will only benefit BA?

You keep repeating this ad nauseam, but is there any actual evidence that money from the IB side supported the BD purchase? I'm assuming that if any did it was held in a joint account, and can say with almost 100% certainty that nobody in MAD was writing cheques to Lufthansa.

Quoting icaro (Reply 18):
The Spanish management team agreed to those in december and later found out that WW wouldn't allow them to offer those conditions and prefer to use the new labour law that allows cheap firings so the company will save more money.

I haven't been following the negotiations as closely as I should have been, but I'm assuming what happened here is that IB management agreed to less than was mandated by IAG. If that is the case, the IB management had NO authority, either actual or ostensible, to make the agreement. In that case the agreement is null and void. That is a very simple principle of law, and almost certainly isn't harbouring sinister sadism on the part of WW.

AR385 · Wed Mar 06, 2013 2:09 am

Quoting Gonzalo (Reply 52):
Although I completely agree with you regarding the main issue ( the Spanish government will never allow IB going belly up ), I wonder where on Earth they will get : 1.- Political support for an "airline rescue" under the current economic disaster they are facing, and 2.- The money !!!

Political support would probably come from the left. They are hell bent on rebutting everything the PP does, rightly, in my opinion. They are also on the "BA is dismantling IB under our noses camp." So at some point they´ll have to put their money where they are putting their mouth.

The money is not a problem so much as the regulations from the EU. I´m sure they´ll find a formula though.

lightsaber · Wed Mar 06, 2013 4:23 am

Does anyone have convenient links of a snanummary of IB's finances for say a decade prior to the merger? Including any 'help.'
.
Also, does anyone have a link to the striking union's English language web pages?
If they're not doing PR, then

. Well, its not planning ahead. So a link please.

Of note:
Spanish airline Iberia (IAG) said it found seats elsewhere for 95 percent of the 40,000 customers due to be affected by a strike this week,
http://www.bloomberg.com/news/2013-0...h-told-not-to-draft-ba-pilots.html

Quoting BlueShamu330s (Reply 35):
if the situation arises that Iberia no longer has the resources to fund the required changes in future years, everyone at Iberia can kiss Iberia and their jobs for life adios. Vueling will become the new Iberia and everyone, not just those already planned to go, everyone will be joining the back of the unemployment queue.

I don't quite paint that dark of a picture. I suspect there will be some worth salvaging. But short haul would be Vueling (if not on BA).

Quoting icaro (Reply 37):
Losses don't come only from "high" salaries. They come from opening routes irresponsibly and bleeding money on those. They come from operating a not so efficient fleet that should have been modernized long ago. They come from not investing money in your product for years and letting competition offer much better service.

The issue is the airline unions haven't allowed the productivity required to avoid what is happening. Because of the cash burned... (including due to management mistakes) the pain will be high.

Quoting UALWN (Reply 62):
Who holds a grudge with mom and pop in the East Midlands? It's ridiculous.

Do you think that mom and pop is as likely to buy a Spanish vacation this year?

I would really like to know the change in daily losses for IAG due to the strike as well as for Spanish tax revenue.

Lightsaber

UALWN · Wed Mar 06, 2013 6:05 am

Quoting lightsaber (Reply 65):
Does anyone have convenient links of a snanummary of IB's finances for say a decade prior to the merger? Including any 'help.'

Here: http://www.es.iairgroup.com/phoenix....html?c=240949&p=irol-reportsannual
The summary is that the IB group was profitable every year since 1996 to 2010, except for 2009.

Quoting lightsaber (Reply 65):
Do you think that mom and pop is as likely to buy a Spanish vacation this year?

I bet they are. They just won't fly IB. Not that they used to fly IB anyway...

Summa767 · Wed Mar 06, 2013 6:25 am

Quoting UALWN (Reply 62):
Why is that relevant?? He could be from Burkina Faso for all anybody cares! He was the CEO of "British" Airways! That's the "British" the IB guys are angry with.

He was the CEO of Air Lingus too. And yet when he was at BA, there was no anti-irish feeling among the many employees affected by the restructuring at BA. Different attitude.

Quoting UALWN (Reply 62):
Anti British...Airways!

You certainly won't fool me. And of course, i's not a grudge against individual "mom and pops", it's a more basic instinct.

UALWN · Wed Mar 06, 2013 7:05 am

Quoting summa767 (Reply 67):
there was no anti-irish feeling among the many employees affected by the restructuring at BA. Different attitude.

You are obsessed with this. There are no anti UK feelings here either!

Quoting summa767 (Reply 67):
You certainly won't fool me.

Quoting summa767 (Reply 67):
it's a more basic instinct.

This is insulting. But there's no point in arguing. You know how I feel. Heck, you know how all Spaniards feel. We are just a bunch of xenophobes. (I guess that's why Spain is #1 on number of foreign visitors.)

Or, maybe, it's just that you know those basic instincts just too well, and think everybody else shares them.... Pot, kettle...

UALWN · Wed Mar 06, 2013 7:09 am

Quoting summa767 (Reply 67):
He was the CEO of Air Lingus too. And yet when he was at BA, there was no anti-irish feeling among the many employees affected by the restructuring at BA. Different attitude.

By the way, there are no anti-Irish feelings either within the IB employees. So how is their attitude different from that of the BA employees?

Summa767 · Wed Mar 06, 2013 7:12 am

Quoting UALWN (Reply 68):
This is insulting. But there's no point in arguing

What is insulting is tryingti hide the truth:

It's plain enough. It's nationalistic, and not just anti-BA. You may fool yourself, but you won't fool anyone else.

[Edited 2013-03-05 23:14:33]

seahawk · Wed Mar 06, 2013 7:27 am

Iberia is destroying itself. I love the airline for its proud history, but currently it isone the way out. They do not have an image as a customer friendly airline and this is getting worse. The new Iberia Express product is a bad joke, compared to other network carriers in Europe. Seat pitch and on board services are a bad joke. Those I know who already had the pleasure of flying Iberia Express, seem to say it is like Ryanair, just with even more unfriendly crews. Where i work it is being considered to put them on the "book only in an emergency" list, just like Ryanair. Connecting via Madrid and Iberia is currently avoided if possible.

LHRFlyer · Wed Mar 06, 2013 8:59 am

Quoting UALWN (Reply 66):
Here: http://www.es.iairgroup.com/phoenix....html?c=240949&p=irol-reportsannual
The summary is that the IB group was profitable every year since 1996 to 2010, except for 2009.

And the facts are:

a) The operating profit figures tell a different story

b) Without the backing of IAG, Iberia would be bankrupt as suppliers would have withdrawn support.

BestWestern · Wed Mar 06, 2013 10:01 am

Oh, and the Spanish economy has collapsed since then.

It makes no difference though - Iberia staff still think they are government employees who get paid excessively well regardless of the economic situation the company is in.

BlueShamu330s · Wed Mar 06, 2013 10:05 am

Quoting LHRFlyer (Reply 72):
a) The operating profit figures tell a different story

b) Without the backing of IAG, Iberia would be bankrupt as suppliers would have withdrawn support.

For 2012 alone:

British Airways: 295Million PROFIT.
Iberia: 896Million LOSS

One thing rarely, if ever, acknowledged on here by the Iberia defenders is that Iberia defaulted EIGHT times on its lending repayment obligations in 2012. As a stand alone company, I doubt the banks and institutions would have tolerated such financial delinquency.

That however, is not the end of the story. Those covenant breaches have raised charges of just short of 240 MILLION Euros which must be paid in full this year on top of their regular repayments.

Only two institutions have waived these breaches. Six are yet to decide. It would be in their own interest to waive aside also, but these are financial institutions with their own issues, so the outcome is far from clear.

The Iberia juggernaut continues rolling towards an ugly end. The bankruptcy bullet has been dodged for now, but there is no more family silver to sell off and with 808 Million, strike that, we must be down to 802 Million Euros left in the bank, time and money is fast running out. Take off the 240 Million default charges, then 3 million every day, then factor in the remaining strikes, it leaves Iberia management with very little to negotiate with.

Time is running out. People can taint this thread with nationalistic jingoism, but it's rather like drinking tea whilst the wolf is at the door.

Rgds

Bongodog1964 · Wed Mar 06, 2013 11:55 am

Quoting icaro (Reply 56):
And why didn't they buy it with their own money? Why did IB have to spend much needed cash in financing something that will only benefit BA? Why does IB have to finance all its expenses with their own money, why can´t they just use IAG's money as BA does?
Is that fair play?

All the issued shares are for IAG, BA and IB no longer exist in investment terms. There is no BA money, and no IB money, it all belongs to IAG. The shareholders demand that their cash is used to best advantage, spend it on buying BMI and it will probably produce a positive return, spend it at IB and it will disappear down the black hole.

I an't quite see how IB workers feel that their jobs have been taken by BA. Whilst there are BA planes being maintained in Spain now, there aren't any IB ones being maintained in the UK are there ?
Also BA have not expanded their Latin America routes by ay great % since the merger, so their passengers aren't being redirected.

The overall problem is that whilst widespread airline competition came to the UK more than 20 years ago, other parts of Europe were far later on the scene. Even with the last BA/BASSA dispute I'm sure that BASSA whilst complaining loudly and trying to preserve their terms and conditions, had an understanding of the need to compete for passengers, and that the Government weren't going to come to their aid. I'm not sure that the IB protestors realise this yet.
As to the comments about social responsibility, layoffs vs early retirement etc. Social responsibility is unfortunately for Governments, and not in the main rfor employers. If an employer is too generous with pay offs, and especially with long term pension commitments the costs can be a drain for decades. Remember that the IB shareholders used the BA pension defecit as a huge lever to gain a far higher % of IAG than their income and routes otherwise warranted.

alfie1980 · Wed Mar 06, 2013 1:48 pm

Quoting summa767 (Reply 70):

Its anti BA management in IAG not anti British people, lets just be clear, Spanish people we have no issues or any old rivalries with any country in Europe, we get on with everybody.

lightsaber · Wed Mar 06, 2013 2:19 pm

Quoting UALWN (Reply 66):
The summary is that the IB group was profitable every year since 1996 to 2010, except for 2009.

Thank you for the links. Nitpick, 2010 had a small operational loss too. Looking as the summary, IB's costs were ready to put them into this situation.

Note: The 2005 report has a nice overview early on.

And 2009 was pretty bad with 2008 a profit by a hen's tooth.

Quoting BlueShamu330s (Reply 74):
One thing rarely, if ever, acknowledged on here by the Iberia defenders is that Iberia defaulted EIGHT times on its lending repayment obligations in 2012. As a stand alone company, I doubt the banks and institutions would have tolerated such financial delinquency.

I knew of four of those, do you have links to the complete set?

Quoting BlueShamu330s (Reply 74):
Take off the 240 Million default charges, then 3 million every day, then factor in the remaining strikes, it leaves Iberia management with very little to negotiate with.

IAG must cut the bleeding and soon. These strikes are theater. They cannot hope to save all the jobs. What must be done is to reform IB so it has a chance.

Lightsaber

BlueShamu330s · Wed Mar 06, 2013 2:39 pm

Quoting lightsaber (Reply 77):
I knew of four of those, do you have links to the complete set?

The latest article was last week, March 1st, regarding an A340:

http://www.aviationnews-online.com/a...ovenant-on-a340-600-finance-lease/

Quote:

Latest News
IBERIA BREAKS COVENANT ON A340-600 FINANCE LEASE
March 1st, 2013 by Victoria
Buried in International Airlines Group’s annual report is the news that the group has informed its lenders that is has failed to meet one of the financial covenant on a finance lease for one A340-600, which has now technically become repayable on demand. Iberia has three A340-600s on finance leases.
The IAG annual report states: “The Group’s finance lease for one A340-600 is subject to financial covenants which are tested annually. The Group has informed its lenders that it had failed to meet one of the covenants for the year to December 31, 2012. As a result of this covenant breach, one finance lease has technically become repayable on demand and $85 million (€64 million) has been reclassified from noncurrent to current. On February 14, 2013 the Group obtained a waiver from the lessors.”
“The Group has received notice from the lessor that two of the eight lending institutions have waived the covenant breach. The remaining institutions have provided positive feedback and are expecting their risk committees to formally waive the breach. It is expected for the lessor to issue a formal waiver by March 15, 2013.”

Quote:
Moody's has downgraded the Class A enhanced secured notes on Iberia’s 2004 bond issue to Baa1 from A2.

Rgds

Bongodog1964 · Wed Mar 06, 2013 3:47 pm

Quoting alfie1980 (Reply 76):
Its anti BA management in IAG not anti British people, lets just be clear, Spanish people we have no issues or any old rivalries with any country in Europe, we get on with everybody.

No issues with anyone ? So its all fine with Gibraltar then and you permanantly respect the residents wish to remain British.

As to its all about the IAG management and not anti British, perhaps rent a mob needs to be more careful when they are painting their protest banners, as they presently show a clear British out message.

PDPsol · Wed Mar 06, 2013 4:19 pm

Quoting BlueShamu330s (Reply 78):
The Group has informed its lenders that it had failed to meet one of the covenants for the year to December 31, 2012. As a result of this covenant breach, one finance lease has technically become repayable on demand and $85 million (€64 million) has been reclassified from noncurrent to current. On February 14, 2013 the Group obtained a waiver from the lessors.”
“The Group has received notice from the lessor that two of the eight lending institutions have waived the covenant breach. The remaining institutions have provided positive feedback and are expecting their risk committees to formally waive the breach. It is expected for the lessor to issue a formal waiver by March 15, 2013.”

Quoting BlueShamu330s (Reply 74):
One thing rarely, if ever, acknowledged on here by the Iberia defenders is that Iberia defaulted EIGHT times on its lending repayment obligations in 2012. As a stand alone company, I doubt the banks and institutions would have tolerated such financial delinquency.

OK, newsflash, this is not all that unusual, just because a borrower "blows" a covenant in its credit agreement, or in this case, its operating lessor agreement, it does not mean the borrower will enter into bankruptcy.

Here in the United States, borrowers negotiate waivers from creditors for "blowing" covenants everyday. Of course, it is a negotiation, just like any other negotiation.

If you read the entire note, you will see IAG is expecting a formal waiver from its lessors by mid-month.

This is "no big deal" in the context of corporate lending world. These lessors have extensive knowledge of IB and its operations and would not agree to waive a "blown" covenant without a decent expectation of the carrier's continued creditworthiness and financial position. Again, the creditors that are a party to the operating lease agreement will, of course receive something in return for waiving the blown covenant. This is simply the market at work...

Bongodog1964 · Wed Mar 06, 2013 4:32 pm

Quoting PDPsol (Reply 81):
This is "no big deal" in the context of corporate lending world

However every time a covenant is broken a waiver has to be requested and negotiated. Not only does this cost money in fees, but it can also result in the credit rating being downgraded. Each time the credit rating goes down, the cost of borrowing edges up by a fraction of a %. One post here mentions that they have seen their debt downgraded from A2 to Baa1. This will affect their future borrowing costs.

bennett123 · Wed Mar 06, 2013 4:36 pm

Regardless of what anyone may say, anyone seeing the images in reply 3 and 70 will conclude that Brits are not welcome.

Given how big Spain's tourist industry is, that is not a smart move.

Furthermore, given current events, (of which this is part) would someone book IB, unless there was no option, or IB suddenly becomes a lot cheaper than FR/U2 etc.

Folks do not generally pick an airline for the excitement factor.

PDPsol · Wed Mar 06, 2013 4:42 pm

Quoting Bongodog1964 (Reply 82):
However every time a covenant is broken a waiver has to be requested and negotiated. Not only does this cost money in fees, but it can also result in the credit rating being downgraded. Each time the credit rating goes down, the cost of borrowing edges up by a fraction of a %. One post here mentions that they have seen their debt downgraded from A2 to Baa1. This will affect their future borrowing costs.

No one is debating that. IAG has certainly needed to negotiate something in return for obtaining a waiver from its creditors.

A "blown" covenant is typically an indicator of increased borrower risk and, of course, typically results in higher borrowing costs associated with that enhanced risk. However, it by no means indicates the borrower needs to enter bankruptcy protection.

The key piece of information in the note is that IAG is receiving waivers [negotiated of course] from the creditors that are a party to its operating lease agreement. These creditors would never have negotiated a waiver without having some degree of confidence IB will continue to be a creditworthy borrower, regardless of the quality of the assets that secure the operating lease agreement, in this case, the A340-600.

Corporate borrowers blow through covenants everyday, especially here in the United States...

TYCOON · Wed Mar 06, 2013 4:59 pm

I just booked this morning a business class ticket from ORY to LAX via MAD with Iberia in July.... call me crazy, mad, adventurous, masochistic or just a lover of the airline industry... I only hope things settle down by July!!!

BlueShamu330s · Wed Mar 06, 2013 4:59 pm

Quoting PDPsol (Reply 81):
This is "no big deal" in the context of corporate lending world. These lessors have extensive knowledge of IB and its operations and would not agree to waive a "blown" covenant without a decent expectation of the carrier's continued creditworthiness and financial position.

That is the point. It is a given amongst those close to the situation that were it not for IAG (that big, bad company run by an Irish bully, robbing Iberia of its lifeblood), a stand alone Iberia in its present situation would quite possibly not have been given any waivers and aircraft could have been winging themselves back to lessors quicker than you could shout "British go home."

Quote:
Quote:
Moody's has downgraded the Class A enhanced secured notes on Iberia’s 2004 bond issue to Baa1 from A2.

Rgds

goosebayguy · Wed Mar 06, 2013 5:20 pm

Iberia is beginning to look like Sabena. Sad to say.

Gonzalo · Wed Mar 06, 2013 5:31 pm

Quoting TYCOON (Reply 85):
I just booked this morning a business class ticket from ORY to LAX via MAD with Iberia in July.... call me crazy, mad, adventurous, masochistic or just a lover of the airline industry... I only hope things settle down by July!!!

You are certainly an optimistic !!!! But you never know.... my family booked tickets for a trip MVD-SCL-ANF-SCL-MVD with a "perfectly good and healthy airline known as PU ", paid the full price..... and two weeks later the airline just vanished... At least in your case, if something goes wrong, you can not claim to be surprised.... Anyway, I wish you the best of luck and a nice and comfy flight to LAX.

Quoting bennett123 (Reply 83):
Regardless of what anyone may say, anyone seeing the images in reply 3 and 70 will conclude that Brits are not welcome.

Well, to be honest, the Brits are not doing the best moves for their public image :

IAG announced the distribution of 2,6 million shares with a value of 7,57 million Euros, among 8 of its executive directors ( almost 1 million Euros to each )....the timing for this announcement is horrible, and the picture of Willie Walsh in the article will definitely not help with the current situation.

http://economia.elpais.com/economia/.../actualidad/1362572104_874128.html

Rgds.
G.

LHRFlyer · Wed Mar 06, 2013 5:37 pm

Quoting Gonzalo (Reply 88):
Well, to be honest, the Brits are not doing the best moves for their public image :

IAG announced the distribution of 2,6 million shares with a value of 7,57 million Euros, among 8 of its executive directors ( almost 1 million Euros to each )....the timing for this announcement is horrible, and the picture of Willie Walsh in the article will definitely not help with the current situation.

http://economia.elpais.com/economia/....html

They are conditional share awards based on the performance of the company.

http://www.iairgroup.com/phoenix.zht...rticle_Print&ID=1792650&highlight=

TYCOON · Wed Mar 06, 2013 5:45 pm

Thanks Gonzalo... I too had a ticket on PU from MVD to GIG last January, but the airline went belly up way before the date of travel... and my travel insurance via my credit card only covered half the cost...
So I was "forced" to book a PDP-AEP-GIG flight with your favourite airline Aerolineas Argentinas!

I take comfort that if things remain bad (or get worse) by date of travel, perhaps I will be offered a BA flight via LHR or an AA flight ... though I would prefer IB.

Clydenairways · Wed Mar 06, 2013 5:45 pm

Quoting Bongodog1964 (Reply 80):
No issues with anyone ? So its all fine with Gibraltar then and you permanantly respect the residents wish to remain British.

So now we have Gibraltar being brought into this discussion now

This thread is turning into farce.

phxa340 · Wed Mar 06, 2013 5:52 pm

I have to go with everyone else on this one ... when the Unions waved anti-British flags they were the ones who put the nationalistic spin on the strikes.

I know there is no sense in debating with the Iberia supporters on this one, but only Iberia is to blame because of their problems. With that said, riding in the A340-600 J class was hands down one of the top flying experiences I have had. Great airplane and fantastic crew.

[Edited 2013-03-06 10:43:47 by SA7700]

Summa767 · Wed Mar 06, 2013 5:56 pm

Quoting lightsaber (Reply 77):
Thank you for the links. Nitpick, 2010 had a small operational loss too. Looking as the summary, IB's costs were ready to put them into this situation.

I am glad that you looked at the figures, and see the relevance of the operational profit (sadly, some people fail to see this, and insist that "a profit is a profit" even when it's a result of selling assets, such such stakes that IB has sold in Amadeus)

Quoting lightsaber (Reply 77):
And 2009 was pretty bad with 2008 a profit by a hen's tooth.

And if you look further, you will see that they only just managed the tiny a profit because third party maintenance gave them a €50m. The actual transport of passengers and cargo, i,e flying has not given Iberia a profit since 2007.
And yet, you have people stating that IB was a perfectly healthy airline until it merged with BA, and going out on demonstrations with the "British go home" on the Spanish flag.
If only they saw the real source of Iberia's problems..

alfie1980 · Wed Mar 06, 2013 6:21 pm

Quoting SCL767 (Reply 12):

Quoting Bongodog1964 (Reply 80):

No issues with anyone ? So its all fine with Gibraltar then and you permanantly respect the residents wish to remain British.

As to its all about the IAG management and not anti British, perhaps rent a mob needs to be more careful when they are painting their protest banners, as they presently show a clear British out message.

Excuse me, I dont think Gibraltar should be brought in this conversation as it has nothing to do. If you think that us Spaniards are anti British then I am sorry that you feel that way, we are a country that has opened their arms to the tourism, no matter from which country they come from.

alfie1980 · Wed Mar 06, 2013 6:24 pm

Quoting Gonzalo (Reply 88):
You are certainly an optimistic !!!! But you never know.... my family booked tickets for a trip MVD-SCL-ANF-SCL-MVD with a "perfectly good and healthy airline known as PU ", paid the full price..... and two weeks later the airline just vanished... At least in your case, if something goes wrong, you can not claim to be surprised.... Anyway, I wish you the best of luck and a nice and comfy flight to LAX.

Maybe your family had a bad experience flying on Iberia I never had. I do at leat 50 flights with them a year. I begin to feel like some of you will be actually very happy with Iberia going down how sad

lightsaber · Wed Mar 06, 2013 6:34 pm

Quoting TYCOON (Reply 85):

I just booked this morning a business class ticket from ORY to LAX via MAD with Iberia in July.... call me crazy, mad, adventurous, masochistic or just a lover of the airline industry... I only hope things settle down by July!!!

You just convinced me that when you and your significant other are wearing black leather, you are *not* the one holding the whip.

Quoting BlueShamu330s (Reply 86):
Quote:
Quote:
Moody's has downgraded the Class A enhanced secured notes on Iberia’s 2004 bond issue to Baa1 from A2.

Rgds

Thank you for your continued information. This is becoming interesting...

Lightsaber

Bongodog1964 · Wed Mar 06, 2013 6:54 pm

Quoting alfie1980 (Reply 76):
Its anti BA management in IAG not anti British people, lets just be clear, Spanish people we have no issues or any old rivalries with any country in Europe, we get on with everybody.

Quoting alfie1980 (Reply 93):
Excuse me, I dont think Gibraltar should be brought in this conversation as it has nothing to do. If you think that us Spaniards are anti British then I am sorry that you feel that way, we are a country that has opened their arms to the tourism, no matter from which country they come from.

You clearly stated that the Spanish peopledon't have any issues with any other Country in Europe, I replied with the Gibraltar question, and you immediately flamed out and proved that your original statement was not true.
Perhaps that is the real reason behind the anti British banners

AR385 · Wed Mar 06, 2013 7:37 pm

The results and suggestions by the mediator accepted two weeksa go by both IB and the unions has come out. The proposals are non-binding. Key points:

1) Layoffs to be 3,141 which is 16% of the workforce insteas of the 3,800 19% of the workforce proposed by IB.
2) A 7% salary cut for ground personnel and a 14% cut for cabin crew and pilots.
3) Salaries to remain frozen across the board until the end of 2015.
4) Of the 3,141 cuts, 2,226 will come from ground personnel, 627 from cabin crew, and 258 form the pilots.
5) All of these cuts are being proposed through pre-retirement and with the "ERE" law in place in IB since 2001, not the latest labor "ERE" scheme used in Spain.

Is this reasonable? Will IAG go with this? will the unions? Is it too little too late?

http://economia.elpais.com/economia/.../actualidad/1362568913_518276.html

LJ · Wed Mar 06, 2013 10:06 pm

Quoting clydenairways (Reply 31):

I think your view on using the Vueling AOC is a good suggestion that makes sense.
With the way things are going at the moment i can't see any end in sight and it's getting to the stage where IAG will have to consider winding IB down.
After that in a similar situation to the aftermath of SR and SN, IAG could start a new Iberia using the Vuelling operating certificate like how the Crossair AOC was used for Swiss, and the DAT AOC was used for Brussels Airlines.

Don't expect a Swissair/Sabena construction. Unlike Swissair and Sabena, IB does have a domestic competitor which will probably sue the Spanish government if they would give all the current lucrative IB traffic rights to a new entity (I would think that UX would probably be interested in GRU, GIG, BOG and UIO). In addition, both Swissair and Sabena used local multinationals to provide part of the financing and came out much smaller than they were prior to bankruptcy. For some reason I don't see none of this happening for IB.

Bongodog1964 · Wed Mar 06, 2013 10:43 pm

Quoting AR385 (Reply 97):

1) Layoffs to be 3,141 which is 16% of the workforce insteas of the 3,800 19% of the workforce proposed by IB.
2) A 7% salary cut for ground personnel and a 14% cut for cabin crew and pilots.
3) Salaries to remain frozen across the board until the end of 2015.
4) Of the 3,141 cuts, 2,226 will come from ground personnel, 627 from cabin crew, and 258 form the pilots.
5) All of these cuts are being proposed through pre-retirement and with the "ERE" law in place in IB since 2001, not the latest labor "ERE" scheme used in Spain.

Is this reasonable? Will IAG go with this? will the unions? Is it too little too late?

The one that sticks out to me is no5, whilst the others are a few % away from IAG's stance, It might be that the cost difference between redundancy and retirement with an instant pension is huge.

Any Spanish experts here who know ?

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