IAG announces net loss, job cuts at Iberia

International Airlines Group on Friday said it planned to cut jobs at its Spanish unit Iberia, whose weak performance along with soaring fuel prices sent IAG crashing into a first-half net loss. IAG, which also owns British Airways, said it suffered a loss after tax of 251 million euros ($306 million) in the six months to June 30, compared with a net profit of 88 million euros in the first half of 2011. "There remains a stark difference in the performance of our subsidiaries," IAG chief executive Willie Walsh said in the earnings release. "British Airways made an operating profit despite rising fuel prices while Iberia's losses deepened. "Iberia's problems are deep and structural and the economic environment reinforces the need for permanent structural change. We are currently working on a restructuring plan for Iberia which we anticipate will be finalised by the end of September. "This is likely to include short term downsizing, network reshaping to deliver higher unit revenues and a re-evaluation of all aspects of the business to deliver competitive costs and service to enable long-term profitable growth. "Inevitably, we will not be able to avoid job losses as part of this process," Walsh added. IAG said its fuel charges soared 25 percent in the reporting period compared with a year earlier.