Iberia to concentrate on long-haul flights

Today, Iberia's Boad of Directors has adopted a new strategic plan (Plan 2012) to address the dramatic situation now faced by the airline, with declining revenues, weak demand and mounting losses, as the negative performance of the economy has shown the measures taken so far to be insufficient.

The new plan calls for greater emphasis on the generation of revenues, cost savings and efficiency, improved service, and a shift in the airline’s approach to the short- and medium-haul segment.
Iberia’s COO, Rafael Sánchez-Lozano, describes the current situation as unsustainable. "The airline industry has never experienced such a dramatic situation. It is essential for us to use imaginative means to transform Iberia into a sound and viable project”. The measures prescribed in Plan 2012 are aimed at bringing Iberia back to profitability.

Given the difference in the performance and competitiveness of Iberia’s long-haul business in contrast to the short- and medium-haul routes, the company is posing two well-defined strategies that allow it to be larger while simultaneously cutting losses. These are: Growth in the long-haul routes, where Iberia is market leader on those that connect Europe and Latin America, in order to maintain and increase this lead. A similar reduction in seat supply on short-and medium-haul routes, in addition to that already underway, and a change in the production model for these flights. To achieve this paradigm shift, which is to be effective in 2011, the airline plans to create a new network airline based in Madrid which will feed and distribute traffic to Iberia’s growing long-haul network.

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