The Spanish carrier has called all social unions to discuss the measure over increasing uncertainty regarding the continuation of the government’s assistance to the sector.

As airlines conclude a second summer season since the world pandemic erupted, it is now time to evaluate how the industry has performed and, thus, determine how it will adapt to the post-Covid scenario where a full recovery will be still limited by worldwide restrictions, together with a reduced involvement of public intervention.

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, through which companies are exempt from paying a big stake of the salaries, a benefit that is now at risk as to the public institutions slowly reduce its presence in the markets. In this particular case, the possible exclusion of the sector from such a tool has prompt the decision to discuss other options to “safeguard” as many jobs as possible, the airline has 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”) that could affect around 35% of the workforce, or up to 5,000 employees, the president Javier Sánchez-Prieto has announced during the 75th anniversary of the first flight between Madrid and Buenos Aires.

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

The company has included ground Unions and representatives for the pilots and cabin crew to help agree. The company has insisted on the idea of debating different alternatives in case the public aid is not postponed until the very end of this year, a demand that the aviation and the touristic sector is vehemently urging the government to accept.

Iberia has been performing at a 65-70% capacity rate during summer, but the occupation rate, according to some sources, is only 50%. On the other hand, the company expects to reach pre-pandemic levels by the following summer, when many travel restrictions will be eased, and the so-called “business travelers” will get airborne again if they finally do.

During the first semester of the year, IAG recorded a loss of €2,048m, way below the €3,813m that is recorded in the same period last year. Moreover, the holding amounts to €12B in debt. Nonetheless, any suspicion on tapping investors for further funds was dismissed by Luis Gallego, the CEO of the group, on Sunday, contrary to what the low-cost airline EasyJet has recently announced. Following the interview in the Sunday Times, Mr. Gallego also showed some interest in the orange airline when asked about a merger with some executives, pointing that the Group is continuously evaluating different options.

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