Iberia's profit streak ends with €273 million loss

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Iberia's profit streak ends with €273 million loss

Unread post by bimjim » Fri Feb 26, 2010

http://www.atwonline.com/news/story.html?storyID=19519

Iberia's profit streak ends with €273 million loss
Friday February 26, 2010

Iberia Group ended what may be its final year as an independent carrier on a sour note, reporting a consolidated net loss of €273 million ($369.8 million) for 2009, reversed from a €32 million surplus the prior year.

The deficit also ended a 13-year annual profit streak for the Spanish airline that is merging with British Airways. Operating revenue plunged 19.2% to €4.46 billion and operating expenses declined 10.9% to €4.93 billion. IB's operating loss widened sharply from a €79 million deficit in 2008 to €464 million last year.

"This market has changed for good," Chairman Antonio Vazquez was quoted as saying by the Financial Times. "Traditional airlines as we know them will disappear, but we're not about to cry about it."

To adapt to falling demand, Iberia reduced its fleet by 10 units and ended 2009 with 109 aircraft through cancellation of leases, postponement of new deliveries and "mothballing" of some planes. It cut capacity by 6% to 62.16 billion ASKs, driven by an 11% reduction in Spanish routes and a 10.6% cut on its European network. Long-haul capacity fell 3.3%. Traffic was down 6.2% to 49.61 billion RPKs and load factor slipped 0.2 point to 79.8%.

Full-year passenger revenue fell 21.2% to €3.33 billion with yields across the network sinking 14.1% to €6.32 cents "due to mix deterioration, an intense pressure on pricing in most markets and the effect of an increase in average stage length," IB said. RASK decreased 14.3% to €5.05 cents and CASK was down 6.3% to €7.84 cents. Cargo revenue fell 27.4% to €251 million, handling revenue decreased 3.3% to €266 million and maintenance revenue rose 4.2% to €310 million.

Fourth-quarter loss widened to €91 million from €19 million in the year-ago period, on a 19% decline in revenue to €1 billion.

Regarding the planned merger with BA, Vazquez said he expects the signing of a definitive agreement will take place "in the coming weeks" and that it will enter effect "more or less at the end of the year," the Associated Press reported.

by Cathy Buyck

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