IAT CARGO AIRLINES, LTD.: Unit 127, Southampton House, Building 521, World Cargo Centre, London Heathrow Airport, Hounslow, Middlesex, England, TW6 3HF, United Kingdom; Phone 44 (181) 745-1780; Fax 44 (181) 745-1778; Code VGO; Year Founded 1996. IAT is set up at London (LHR) in August 1996 to offer worldwide and ad hoc all-cargo charters. Peter Barnes is general manager and he recruits a workforce of 20 and leases a Boeing 707-355C. Revenue services commence on November 1. It is understood that flights have continued.
IBA INTERNATIONAL BUSINESS AIR, A. B.: Bromma Flygplats, Bromma, S-16169, Sweden; Phone 46 (8) 286050; Fax 46 (454) 19596; Http://www. algonet. se/ulldani/iba. html; Year Founded 1995.
IBA is set up at Bromma in 1995 to offer executive charter services to domestic and Scandinavian destinations. Joakim Palsson is operations manager and his concern operates a fleet comprising 2 Mitsubishi Mu-2Bs and 1 each SAAB-Fairchild Metro II and Piper PA-31-350 Navajo Chieftains.
Scheduled services are added in 1996 with a Metro III and these continue.
IBC AIRWAYS: 8401 NW 17th St., Miami, Florida 33126, United States; Phone (305) 591-8080; Fax (305) 471-9619; Year Founded 1991. IBC is founded at Miami (MIA) in 1991 to provide all-cargo and express charters to destinations throughout the U. S. and Latin America. By 2000, the company employs four pilots and flies three Swearingen Merlins.
IBERIA SPANISH AIRLINES (1) (SOCIEDAD IBERICA DE AVIACION, S. A.): Spain (1927-1929). On April 11, 1927, the Spanish government forms a Superior Aviation Council (CETA) to oversea airline development and subsidy distribution. Meanwhile, in need of a jumping off point for its South American services, Deutsche Luft Hansa, A. G. (DLH) on June 28, assists a Spanish business group in the formation of the first Iberia and the Spanish state awards it exclusive rights to the air route between Madrid and Barcelona.
The local interests hold 51% of the shares and the German airline owns 49% while providing technical support and three ex-DLH Rohrbach Rolands, the Watzmann, Feldberg, and Brocken. Following a ceremony attended by King Alfonso XIII, the aircraft are employed to inaugurate Madrid-Barcelona flights on December 14. Passengers at Barcelona are able to connect with DLH’s service to Marseilles and hence to Berlin and beyond.
In early 1928, a fourth ex-DLH Rohrbach Roland, the Zugspitze, is acquired. Having determined just over a year later that a unified state carrier is required, CETA halts subsidy to Iberia and two other small carriers, Compania Espanola de Trafico Aereo, S. A. (CETA), and Union Aerea Espanola, S. A. (UAE). On March 29, 1929, these are merged into the new national airline Concessionaria Lineas Aereas Subven-cionades, S. A. (CLASSA).
IBERIA SPANISH AIRLINES (2) (LINEAS AEREAS DE ES-PANA, S. A.): Calle Valazquez 130, Madrid, E-28006, Spain; Phone 34 (1) 587-8787; Fax 34 (1) 587-7329; Http://www. iberia. com; Http://www. irinfo. es/aviacion/eng/iberia. html; Code IB; Year Founded 1940. During the Spanish Civil War, a Falangist air transport wing is formed (Sociedad Espanola Iberia or SEI) and in August 1937 is equipped with two Deutsche Lufthansa, A. G.-supplied Junkers Ju-51/3ms, a third being delivered in 1938. As Nationalist forces approach victory, the military airfield at Son Bonnet on Palma de Mallorca is readied to receive civilian traffic.
Meanwhile, the Republican airline Lineas Aereas Postales Es-panolas, S. A. (LAPE) employs a variety of transports until the government surrenders in April 1939. During that month, the most modern LAPE units, the original Douglas DC-1 and three DC-2s, flee to France with officials of the former regime.
In May, the Douglas transports are returned to Madrid, where they are reunited with the Capitan Vara de Rey, a former LAPE DC-2 taken early in the war and renamed. On June 15, civilian services are resumed to Palma de Mallorca from Barcelona.
LAPE continues to function in a minimal fashion until late in the year when it is succeeded by the Compania Anonima Espanola de Trans-porte Aereo, S. A. (SAETA) , to which all former commercial airliners and some military transports in the country are transferred.
In April 1940, the Franco government replaces SAETA and forms the Trafico Aereo Espanol (TAE) to control air services. TAE is given the seven or eight SEI trimotors and the Douglas transports, including the DC-1 now christened Manuel Negron (after the Battle of Turuel hero Commandante Manuel Negron de las Cuevas) and assigned to a Seville to Tetuan via Malaga route. During the spring, an agreement is signed with Italy and services commence Lisbon-Barcelona via Madrid and Madrid-Tetuan and Melilla via Malaga.
On July 7, the new state airline, Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.), is formed around the TAE aircraft, plus the former Republican Douglas DCs and a de Havilland DH 89 Dragon Rapide. The government holds 51% of the shares and private and foreign interests, including Deutsche Lufthansa, A. G. (DLH), own the remainder. An Administrative Council is set up to control operations; two of its members come from DLH. While taking off from Malaga on December 1, the DC-1 Manuel Negron loses an engine and makes a crash belly landing; although no injuries are reported, the aircraft must be written off as a complete wreck.
In June 1941, a network of domestic service is opened within Spain to the Canary Islands via Cabo Jabi and Ifni to Palma and Morocco. Three Junkers Ju-52/3ms are delivered from Germany in December and are placed in service. Fuel shortages cause severe reductions in frequencies beginning in March 1942 and, in November, the Canary Island service is withdrawn.
In March 1943, only the Madrid-Morocco route remains; service to Seville is suspended on May 5. The route is operated by the Dragon Rapide, the only available aircraft that burns ordinary gasoline. On August 14, a new government organization, the Instituto Nacional de Industria (INI) acquires the carrier’s private and foreign shares, thereby buying out any German interest. Service is resumed on November 20 between Barcelona, Madrid, and Lisbon.
While landing at Barcelona on February 3, 1944, the DC-2 Capitan Vara de Rey, with 11 aboard, crashes (8 dead). INI assumes full control of Iberia on September 30; however, provision is made for a future sale of stock to create a new private minority holding and a 20-year domestic concession is granted. During the summer, limited fuel resources are delivered by the U. S. and allow the start-up of domestic services, together with flights to Bata (Spanish Guinea) and Santa Isabel. Three interned Douglas C-47s are brought up to DC-3 civil standard and three purchased DC-3s arrive from America. A new Spain-U. S. bilateral agreement is signed on December 2.
Route development continues in 1945, with the DC-2 Carlos Haya withdrawn from service in September. In March 1946, the Canary Islands route is restarted. The DC-2 Garcia Morato completes its final flight on April 11.
Service is extended to London on May 3 and to Rome in August. In the latter month, multistage flights are launched, in cooperation with the Argentine carrier FAMA (Flota Aerea Mercante Argentina, S. A.), from Madrid to Buenos Aires via Villa Cisneros, Natal, Rio de Janeiro, and Montevideo, with newly delivered Douglas DC-4s. Service to passengers on long-haul routes demands new approaches, including the introduction of the air hostess, or stewardess.
In 1947-1948, the European regional network is improved as additional DC-3s are placed in service. One of these crashes near Tarragona on Christmas Eve 1948 (27 dead). Also in 1948, an arrangement is concluded with AVIACO (Aviacion y Comercio, S. A.) whereby the private airline will operate low-density, secondary domestic routes for the state carrier while Iberia flies the high-density trunk routes.
Multistage Madrid-Caracas via the Central Atlantic DC-4 flights are inaugurated on July 3, 1949 and on March 15, 1950 transatlantic DC-4 flights start from Madrid to Havana and Mexico City via Venezuela and Puerto Rico. In 1951-1953, in anticipation of long-haul service, orders are placed for three Lockheed L-1049G Super Constellations; additionally, Convair CV-440 Metropolitans are ordered for the regional routes.
On May 27, 1954, Lt. Gen. Gonzales Gallarza reports, too optimistically, that the carrier will begin thrice-weekly Madrid-New York flights at month’s end. The first direct Madrid-New York service begins on September 2 with three newly delivered L-1049Es; on November 30, a Super Connie flies from New York to Madrid nonstop in a record 9 hrs. 25 min. A total of 1,000 persons are flown across the North Atlantic during the fourth quarter. Meanwhile, the new CV-440s enter service on the
European routes. Two L-1049Gs are ordered in December 1955 as the carrier’s North Atlantic traffic grows to 7,000.
An L-1049E crashes while attempting to land at Madrid on May 10, 1957 (37 dead). The two surviving L-1049Es are now brought up to L-1049G standard. A DC-3 with 4 crew and 17 passengers is lost at Getafe, near the Spanish capital, on October 26; there are no survivors.
Under unknown circumstances, a DC-3 is lost at Palma de Mallorca on April 10, 1958; there are no fatalities.
En route from Bilbao to Barcelona on April 15, another DC-3 is lost with 16 passengers. Another Douglas transport crashes while flying from Vigo to Madrid on December 4 (21 dead). Orders are placed in 1959 for three DC-8-30, later Dash-52, jetliners.
A DC-3 with 3 crew and 25 passengers is lost at Cuenca, near Valde-meca, on April 29; there are no survivors.
Later in the year, the L-1049G Super Constellations enter service.
In 1960, controlling interest is taken in Aviacion y Comercio, S. A. (AVIACO). North Atlantic enplanements for the year total 11,000. An L-1049E is lost in a crash at Madrid on March 6, 1961. An L-1049E is leased as an interim replacement from KLM (Royal Dutch Airlines,
N. V.) on April 1. The arrival of the first DC-8-52 in late spring allows launch of jet service from Madrid to New York’s Idlewild Airport on July 2, Caracas on September 3, and Buenos Aires on November 1. Meanwhile, on July 18, the first DC-3 service is inaugurated to the new Son Sant Joan airport on Palma de Mallorca.
For the first time, the company this year flies in excess of one million passengers.
Early in 1961, an L-1049G is leased from KLM (Royal Dutch Airlines, N. V.). On March 6, the Super Constellation with 10 crew and 36 passengers arriving from Madrid, crashes while on final approach to Sao Paulo; although the Super Constellation is damaged, there are no fatalities.
The damaged KLM machine is replaced in service by an L-1049G purchased from Aerovias Guest, S. A. of Mexico. As the CV-440s begin orderly retirement, they are replaced on European services by four Sud Est SE-210 Caravelle VIRs, the first of which enters operations on May 1,1962.
The chartered Dutch L-1049E Super Constellation is returned to Amsterdam on May 28; however, the leased L-1049G, by now repaired, is purchased on August 15.
While on initial approach to the airport at Carmona on October 12, a CV-440, with four crew and 14 passengers, crashes into a mountain; there are no survivors. Transatlantic traffic accelerates for the year to 16,000.
The two remaining Super Constellations are withdrawn from frontline service in 1963. One is outfitted as a freighter and the other is leased to Aviacion y Comercio, S. A. (AVIACO).
Systemwide, enplanements total 1,432,293.
Airline employment is 6,518 in 1964. On March 1, the airline steps up its DC-8-30 passenger traffic to Cuba, cutting back on cargo shipments; the weekly Madrid-Havana return service becomes Cuba’s only western air link to Europe. Orders are placed for three DC-9-15s.
Total passenger boardings accelerate 14.7% to 1,679,124 and the 68% gain in North Atlantic traffic is the largest recorded by any airline in that market this year. Revenues total $72.59 million.
The employee population swells to 9,700 in 1965. Two additional SE-210s arrive, in March and April respectively, with three more ordered in March. The fleet now includes 6 DC-8-30s, 11 SE-210s, 6 L-1049Gs, 15 CV-440s, 7 DC-4s, and 17 DC-3s.
En route from Malaga, a CV-440 with 5 crew and 48 passengers stalls 10 nm. off Tangier, Morocco, on March 31 while on initial approach and crashes into the Mediterranean Sea (50 dead).
While going around in thick fog for another landing at Los Rodeos Airport, Tenerife, Canary Islands, on May 5, Flight 401, a L-1049G with 9 crew and 40 passengers coming in from Madrid, crashes (32 dead). Construction is undertaken during the year on a new 15-floor headquarters building in downtown Madrid and bookings jump to 2,254,356, of which 60% are flown in national service and 40% in international. Three DC-9-15s are delivered in 1966 and two Caravelles are leased.
A DC-3 with 3 crew and 24 passengers loses an engine just after takeoff from Tenerife on September 16; the Douglas is ditched, but remains afloat for 5 min. One passenger who refuses to abandon the aircraft goes down with it.
As Spain continues to attain world recognition as a major tourist destination, passenger boardings climb slightly to 2,274,000.
During 1967, 22 more aircraft join the fleet: 2 Carvairs, 9 DC-9-32s, 1 DC-8-63, 6 SE-210s and 4 Fokker F.27s. Orders remain outstanding for 4 F.27s, 12 DC-9-32s, 1 DC-8-50,4 DC-8-63s, 4 B-747s, and 3 U. S. SSTs, the last on option.
The first of the nine DC-9-32s to be received on the year arrives on June 29, the day after the company celebrates its 40th anniversary. Iberia is the first European operator of the DC-9.
A Boeing 707-387B, operated jointly with Aerolineas Argentina, S. A., inaugurates 6,462-mile nonstop service from Buenos Aires to Madrid on August 8, the world’s longest nonstop scheduled frequency.
During the summer, a Convair CV-990A Coronado is leased from the cargo charter operator Spantax, S. A.
On descent toward a November 4 landing at London (LHR) following a service from Malaga, an SE-210 Caravelle XR with 7 crew and 30 passengers crashes into the southern slope of Black Down Hill, near Femhurst, England, 40 mi. SW of the airport; there are no survivors.
The workforce grows to 9,581 and passenger boardings jump 16% to 2,632,053.
The employee population numbers 12,615 in 1968. Nonstop New York to Barcelona service is opened on April 1. In Europe, new routes are opened to cities in Belgium, Holland, the U. K., Germany, Denmark, France, and Switzerland, while domestic services are also expanded. Twenty new offices are opened worldwide and new aircraft livery and flight attendant uniforms are introduced, along with Royal Rose first-class service. The fleet is increased by four DC-9-32s, four DC-8-62s, and six Friendships. All but five DC-3s and one DC-4 are retired.
Cargo traffic skyrockets 60% and passenger boardings soar 30% to 3,410,008. Revenues are now $147 million.
An unofficial Douglas jetliner capacity record is established in April 1969. A company DC-8-63 transports 346 Spanish nationals from Bata to Las Palmas and Madrid in an emergency evacuation following the independence of Equatorial Guinea.
On June 4, Socarras Ramirez becomes history’s most daring—and luckiest—stowaway. Fleeing “Cuban oppression,” he hides in the unpressurized wheel well of a DC-8-62’s starboard wing and survives the 5,600-mi. flight from Havana to Madrid. He receives asylum for his effort. During the summer, two more CV-990As are chartered from Span-tax, S. A. and orders are placed for a pair of Boeing Jumbojets.
In the fall, the carrier joins the ATLAS maintenance consortium, along with Air France, Alitalia, S. p.A., Deutsche Lufthansa, A. G., and Sabena Belgian World Airlines, S. A.
Enplanements swell to 4,249,341 as the last DC-4 is sold. As the new decade dawns, Iberia, in terms of bookings, is the world’s 17th largest airline; its workforce of 15,529 is 13th in size and the fleet, with 86 aircraft, ranks 11th.
Jesus Romero Garcia becomes chairman on January 1, 1970.
An F.27-600, with 3 crew and 46 passengers skids off the runway while landing at Tenerife on January 5; there are no fatalities.
On January 7, teenager M. Ventura Rodriguez is held after attempting to hijack a CV-440 with 45 other passengers when it stopped for refueling at Zaragoza while on a domestic flight from Madrid. On January 9, Spanish pilots charge that Lt. Gen. Rute Vilanova, military governor of the city, had endangered the lives of the crewmen and passengers on the plane during his capture of the pirate, who had actually surrendered peacefully. Rodriguez will be tried and given a six-year prison sentence.
On May 11, planes in four European cities are targets of fire bombers believed to be political enemies of the Franco government. Disaster is
Narrowly averted in Geneva where 50 passengers have been removed just before a bomb explodes in the baggage compartment of a DC-9-32.
Named for the Spanish literary giants Cervantes and Lope de Vega, two B-747-156s are placed in service in October and November, boosting the fleet total to 86 airliners, all of which, except for seven CV-440s and three DC-3s, are jets. Madrid to New York B-747-156 flights commence in December. Freight climbs 11.65% and in recognition of a booming cargo business, the carrier opens a new air cargo terminal at Madrid Barajas Airport.
Passenger boardings pass the five million-mark, up 26.12% to 5,742,352, and freight tonnage accelerates by 11.65%.
In March 1971, Jose Sanez Insausti is named director general. Service begins on April 1 from Madrid-Santo Domingo, Panama, and Guatemala.
Enplanements reach 6,362,404, the third consecutive year in which boardings are up by over l million.
Airline employment is 17,346 in 1972.
While on final approach to Sierra de Atalayasa on a January 7 service from Valencia, Flight 602, an SE-210 Caravelle VIR with 6 crew and 98 passengers, crashes into the side of a 415-m. mountain, 30 m. from its summit; there are no survivors.
As the first 2 Fokker F.28s and 10 DC-9-32s enter service, 3 of the 5 remaining DC-3s are sold.
The first of six B-747-256Bs, the Calderon de la Barca, joins the fleet on June 4.
Faulty brakes cause an F.28-1000 with four crew to run off the runway while landing at Bilbao on a December 28 training flight; there are no fatalities.
Passenger traffic zooms upward again this year, climbing 18.2% to 7,778,374 passengers carried and freight is up by 27.1%. On revenues of $461 million, a $10-million net profit is posted.
To bolster Aviacion y Comercio, S. A. (AVIACO)’s charter mandate, the 4 older DC-8-62s and 15 Caravelles are transferred to the subsidiary in 1973. The flag line acquires 3 Douglas DC-10-30s and 13 Boeing 727-256s, the latter for European service.
On March 5, while en route from Palma de Mallorca to London (LHR) during a strike of French air traffic controllers, Flight 504, a DC-
9- 32 with 7 crew and 61 passengers collides with a Spantax S. A. (Transportes Aereos) CV-990A Coronado over La Trauche, near Nantes. The Coronado makes an emergency landing at the military airfield near Cognac, but the Douglas explodes and crashes, killing all aboard.
New routes are extended during spring and summer to Washington, D. C., Costa Rica, and El Salvador, and the DC-10-30s are placed in service on routes Malaga and Las Palmas-New York and Madrid-Venezuela.
An SE-210 Caravelle VIR is destroyed in a hangar fire at Madrid on September 29. Another SE-210 Caravelle VIR is destroyed after it catches fire on the ground at Madrid on November 5.
On December 17, during an instrument landing at Boston in bad weather, Flight 933, a DC-10-30 with 14 crew and 154 passengers, strikes approach lights. The aircraft hits a dyke and with its right main landing gear collapsed, skids 3,000 ft. to a stop. There are no fatalities, but the aircraft must be written off, the first of its type to be lost.
Passenger boardings accelerate 16% to 10,267,754 and total revenues climb 17.9% to $543 million.
The workforce in 1974 is 19,100. New Boeing 727-200 flights are launched to Rome, Athens, Istanbul, Warsaw, and Budapest, while DC-
10- 30s fly from Las Palmas to Dakar and Lagos. Two pedestrians are injured in Brussels on May 22 when a bomb explodes near the company’s office.
Hourly DC-9 Madrid-Barcelona shuttle service begins; the first Spanish cities to be linked by air are now the first in Europe to be joined together by an air bridge—or shuttle.
In July, an agreement is signed with LOT Polish Airlines for the introduction of what will evolve into joint code-sharing flights over a route from Madrid to Warsaw. The last two DC-3s are sold; all of the F.27s and both F.28s are transferred to Aviacion y Comercio, S. A. (AVIACO) , thus giving the parent an 84-aircraft, all-jet fleet. Late in the year, the Inforiberia high-technology telephone information service is introduced.
Passenger traffic dips 2.4% to 9.5 million.
A total of 858 personnel are added to the employee base in 1975. Cargo service to New York is inaugurated from Alicante along with new routes to Central America. New European customer and cargo destinations include Rome, Athens, Istanbul, Warsaw, and Budapest. A fourth DC-10-30 is delivered and in June joint flights commence from Madrid to Beirut in cooperation with Middle East Airlines, S. A.L. (2).
The airline cancels its flights to Italian and Scandinavian destinations on October 2, following boycotts by European trade unions protesting the execution of terrorists by the Spanish government.
The year’s freight traffic grows 9.3% and enplanements leap a modest 3.6% to 9,844,000.
The employee population in 1976 is 20,181. Manuel de Predo y Colon de Carvajal, the IATA president, is appointed CEO. New routes are opened to Monrovia, Abidjan, Libreville, and Recife. Two additional DC-10-30s arrive and one DC-8-63 is reconfigured into a freighter. A new engine maintenance facility is opened at Barajas Airport; it not only services Iberia’s aircraft but the Concordes of Air France.
Passenger bookings climb 8.14% to 10,779,000 and cargo is up 3.89%.
In 1977, the company celebrates its fiftieth anniversary by redesigning its insignia and renovating its international image.
During a March 14 Barcelona-Palma flight, gunman Luciano Porcari hijacks a B-727-256 with 36 aboard and diverts the aircraft to the Ivory Coast, where he receives $16,000 of a demanded $140,000 ransom. Refused landing permission in Morocco, the pirate orders the Boeing flown to Seville and Turin, now requiring the return of his young daughter from his estranged wife. From Turin, the aircraft is ordered to Moscow, but Porcari is seized by police during a refueling stop in Switzerland.
Porcari will be tried and receive a 10-year prison term. Later, he will walk away from a prison leave and try to take over another aircraft. Captured in Italy, he will go on trial again and be imprisoned for an additional nine years.
After a flight from Madrid on May 2, hijacker Abuiasha Ali Fargani is overpowered by the pilot of a B-727-256 during an attempted takeover at Rome. Fargani is turned over to police and will be tried and sent to prison.
Enplanements for the year jump to 11,831,296.
The workforce totals 23,116 in 1978. On March 3, a DC-8-63 with 11 crew and 211 passengers is breaks in two after a bad landing at Santiago de Compostella, in northwest Spain; there are no fatalities.
New service is launched to Tehran and Moscow while an order is placed for four Airbus Industrie A300B4-120s. The first electronic ticket reservation terminals are made available to Spanish travel agencies.
Passenger boardings climb 15.2% to 13,952,000 and freight accelerates 9%. On revenues of $1.2 billion, a record $11.3-million net profit is earned.
New routes are started to Kuwait, Mairobi, Cairo, and Jeddah in 1979. The ATLAS Group names Iberia as Central Agency and assigns to it the task of inspecting and maintaining the engines of the B-747 and A300 fleets maintained by the partners. The carrier’s industrial installations in this regard now cover in excess of two million square meters and employ over 5,000 workers.
On August 5, a trio of armed Spanish foreign legionnaires hijacks a DC-9-32 with 23 aboard at Fuertenventura, Canary Islands, and forces it to fly to Lisbon. There they release all of their hostages save the captain and first officer and demand food and fuel for a flight to Rhodesia. The next day, they fly to Geneva, instead, and surrender to Swiss police. The 3 perpetrators will be tried and given prison terms of 20 months.
Passenger traffic moves ahead 5.8% to 14,417,023 and freight climbs 5.6%. High fuel costs and a drop in Spanish tourism conspires to raise expenses 19.7% to $1.46 billion. On total revenues of $1.42 billion, a net $39-million loss is suffered.
The B-747-156 Cervantes is sold to Trans World Airlines (TWA) in May 1980, the same month in which two B-757-256Bs, Cervantes II and Francisco de Quevedo enter service. A DC-10-30 collides with a Colombian Air Force plane on the runway at Bogota on June 12; no injuries are reported.
As the economic crisis deepens, passenger boardings fall 4% to 13.8 million. Still, new B-747-256Bs inaugurate nonstop flights to Mexico City and Buenos Aires; a multistop route is opened to Nairobi. On revenues of $1.7 billion, expenses climb 30.4% to $1.85 billion, and a record $120.8-million loss is taken.
The workforce is increased a scant 0.1% in 1981 to 23,181 and the B-747-156 Lope de Vega is sold to Trans World Airlines (TWA) in February. Christened Francisco de Quevedo, a new B-757-256B arrives on February 18. The B-747-256B Lope de Vega II enters service on March 24 as frequencies are inaugurated to Algiers and Tunis.
A new training center is opened in La Munoza where Iberia trains its pilots for the A300B4-120s; ATLAS Group now contracts with the carrier to teach all of its A300 pilots as well. A new computerized reservations system is installed late in the year.
Enplanements fall another 4.4% to 13,234,000, but freight grows 5.4% to 415.76 million FTKs. Revenues are down to $1.75 billion, but expenses are up to 1.79 billion. Thus a $40.6-million loss is recorded.
The workforce in 1982 is 24,332, a 2.4% boost. The last F.27 is sold as a B-747-256B and two A300B4-120s are delivered; the B-747-256B Juan Ramon Jinenez is acquired on February 26.
In March, a code-sharing agreement is signed with CSA (Czechoslovak Airlines) covering flights over the route from Madrid to Prague, In April, a similar arrangement is inked with Balkan Bulgarian Airlines for services going from Madrid to Sofia. New charter operations and classes of service, including business-class, are introduced. The new CRS, Resiber III, is turned on.
Cargo is up 8.1% to 488.09 million FTKs, but boardings decline again, down 9.7% to 13,144,342. On revenues of $1.76 billion and expenses of $1.81 billion, the net loss climbs to $76.1 million, atop an operating decline of $54.5 million. The cumulative loss since 1979 is now $210 million.
The workforce is cut 4.7% to 23,189 in 1983. Carlos Espinosa becomes director general in March. In April, a joint marketing arrangement is signed with TAROM (Transporturile Aerienne Romane, S. A.) covering flights from Madrid to Bucharest. New uniforms are now designed for cabin attendants, a market is opened at Tel Aviv, and three additional A300B4-120s are delivered.
In thick fog at Madrid on December 7, Iberia Flight 350, a B-727-256 with 9 crew and 84 passengers, is taking off for Rome when its crew sights Aviacion y Comercio, S. A. (AVIACO) Flight 134. The DC-9-32 with 5 crew and 37 passengers is taxiing out onto the active Runway 1 for takeoff to Santander. Flight 350 attempts to take evasive action, but it is too late and the aircraft collide. The Boeing’s left wing and left main landing gear are torn off and the two planes catch fire and are destroyed. Although 8 crew and 30 passengers escape burning Flight 350, there are no survivors from Flight 134.
This is the second airline disaster at Barajas Airport within a 10-day period, causing union and airline officials to complain bitterly about the lack of ground radar and warning lights.
Boardings slip 1.3% to 12,968,000 as freight gains 0.8% to 492.2 million FTKs. Revenues jump 14.3% to $1.3 billion, but are submerged under skyrocketing expenses. The operating loss quadruples to $150 million.
Airline employment grows 0.1% to 24,232 in 1984. Madrid-Los Angeles and Houston charter flights are introduced. Pilots return to work on July 25, ending a 36-day strike that causes the loss of $20 million in lost business. Two accidents and a series of pilot navigational errors bring additional concerns and new safety precautions are taken on top of a rigid cost-cutting program.
New freight terminals and automated booking and routing systems are introduced along the company’s domestic network. In November, a new shuttle service is inaugurated between Madrid and Barcelona.
Passenger boardings drop 3.2% to 12,577,000, but cargo grows 6.7% to 525.31 million FTKs. On total revenues of $1.58 billion, another giant net loss is suffered, $106.8 million, which comes on top of an operating loss of $99.3 million.
The employee population drops 1.7% to 22,335 in 1985 and the fleet now totals 6 B-747-256Bs, 8 DC-10-30s, 6 A300B4-120s plus 35 B-727-256s and 29 DC-9-32s.
On initial approach to Bilbao on a service from Madrid on February 19, Flight 610, a B-727-256 with 7 crew and 141 passengers, is 3 mi. off course and 990 ft. below its recommended minimum altitude. Consequently, the aircraft strikes a television antenna atop Mount Oiz. The left wing separates and the Boeing crashes at the hill’s 3,400-ft. altitude; there are no survivors.
Following acrimonious clashes with government officials of Instituto Nacional de Industria regarding safety, Director General Espinosa is replaced on March 18 by respected banker Narciso Andreu Muste, with Francisco Escarti Carbonell as managing director; at approximately the same time, plans to withdraw the carrier’s 29 DC-9s are shelved. As a new management team takes office, routes are opened to Hamburg, Tokyo, and Bombay; however, a two-week pilot strike is also suffered.
Once operated by Air Canada, Ltd., a B-747-133 is leased from Guinness Peat for six months, May-October, to replace the Airbus. A new “Iberiamatic” ticket dispensing system installed at Madrid and Barcelona airports are the first of their kind anywhere in Europe. Based on a Unisys package, a new yield management program is introduced at year’s end.
Passenger bookings grow 4.8% to 13.16 million and freight is up 13% to 517.49 million FTKs. On revenues of $1.94 billion, up 10.4%, a smaller net loss is reported, $64.5 million, on top of an operating loss of $56 million. Despite its financial woes, Iberia retains its position as Europe’s 3rd largest carrier and in terms of passengers carried, 17th among all world airlines; it is 22nd in terms of fleet size, 12th in total number of employees, and 14th in revenues generated.
The payroll increases 12% in 1986 to 25,009 and the new yield management program is started up in January. In March, weekly Madrid to Bombay via Tokyo service is announced; it is inaugurated on May 1. Protesting the line’s failure to carry out certain provisions in its contract, the carrier’s pilots stage a 24-hour strike on May 17, forcing the cancellation of 143 domestic and international flights. During the year, two DC-9-32s are retired and other aircraft are moved from unprofitable to profitable routes.
On September 24, a DC-10-30 en route from Managua, Nicaragua, to Madrid via Havana makes an emergency landing in Miami when Manuel de Jesus Prado-Ortega, the 20-year - old son of a Nicaraguan official, joins a Cuban family of three in asking for political asylum.
A joint venture is now formed with Swissair, A. G., “Iberswiss,” a catering company that begins operations in several domestic airports. Under its ATLAS partnership agreements, the carrier now services the aircraft of 110 airlines in 48 airports, including 21 outside of Spain.
Passenger boardings climb 3.8% to 13,645,463 while cargo rises 2.3% to 525.23 million FTKs. Revenues advance 4.3% to $1.98 billion and costs are kept low, allowing profits of $45.9 million (operating) and $5.3 million (net). The operating gain is the first in a decade.
Airline employment in 1987, the 60th anniversary year, totals 26,417, a 3.6% boost. Share capital amounts to PTA 93 million and offices are maintained in 51 nations. In January, a code-sharing alliance is entered into with Kuwait Airways Corporation for flights between Madrid and Kuwait City. Nonstop service is introduced from Chicago and Los Angeles to Madrid in April, with special reduced fares through the month of May. Also in April and May, a process to redesign the uniform of all personnel working in contact with passengers is started in cooperation with the nation’s best fashion designers.
In the summer, flights begin to Los Angeles and San Francisco. In October, code-sharing flights commence from Las Palmas to Nouabibou via Nouakchott, under terms of an alliance inked with Air Mauritanie, S. A.; the following month, a similar deal with MALEV Hungarian Airlines brings joint services from Madrid to Budapest. Sometime afterwards, MALEV jetliners take over the frequencies and add a route from Barcelona to Budapest.
Late in the year, the fleet includes 83 aircraft as $400 million in orders are placed for 17 McDonnell Douglas MD-87s as B-727-256 replacements.
Customer bookings zoom upward by 7.3% to 14,127,160. Revenues climb 8.7% to $2.7 billion and allow an operating profit of $279.4 million.
The workforce is cut a major 16.9% in 1988 to 21,994 and the fleet now includes 6 B-747-256Bs, 35 B-727-256/-256As, A300B4-120S, 8 DC-10-30s, 24 DC-9-32s, 4 DC-9-33Fs, and 6 Airbus Industrie A300B4-120s. Orders are placed for 15 A320s as DC-9-32 replacements and 8 A340s as DC-10-30 follow-ons and the B-747-256B Garcia Lorca enters service on April 5.
New uniforms are introduced by all personnel having contact with customers. Chairman Muste and Managing Director Carbonell oversee planning for privatization two years hence. A code-sharing and pooling agreement is signed with Royal Air Maroc in March covering the route from Madrid to Malaga via Barcelona, Casablanca, and Tangier. Dualdesignator flights from Barcelona to Casablanca and from Malaga to Casablanca will be added later. On April 1, nonstop Madrid to Los Angeles service is introduced, followed by the initiation of a third weekly Los Angeles (LAX)-Madrid roundtrip in June.
A code-sharing agreement is reached with Dominicana Airlines, S. A. covering a route from Madrid to Rio de Janeiro via Santo Domingo and Bogota. Passenger boardings ascend 2.6% to 14,487,687 and freight grows 13.5% to 596.08 million FTKs. The operating gain is $190 million.
Airline employment is increased by 27.3% in 1989 to 28,003. Two B-747-256Bs are withdrawn as two A300B4-203s join the fleet.
A strike forces cancellation of 55 flights on January 3. Later in the month, a B-747-256C succeeds the DC-10-30CF employed on the Madrid-Chicago-Los Angeles route. In February, a B-747-256B is introduced on the semiweekly flights from Madrid to Los Angeles via Chicago. Planning for privatization continues and total 100% shareholding is taken in Aviacion y Comercio, S. A. (AVIACO).
The state carrier now begins to develop five regional feeder airlines. These include Seville-based Binter Andalucia, S. A., Canary Islands-based Binter Canarias, S. A., Binter Cantabria, S. A. in northern Spain, Madrid-based Binter Centro, S. A., and Majorca-based Binter Mediterraneo, S. A.
Binter Canarias, S. A. is the first of the regionals to inaugurate services. With pilots provided by the parent, it begins operations in March, only to be shut down for two days in May by a pilots’ strike.
Service to the U. S. is significantly expanded in June. Six-times-per-week roundtrip passenger service is inaugurated from Barcelona to New York and two more B-747F frequencies are added from Madrid to New York. During the month, the carrier also joins the frequent flyer programs of Continental Airlines, Eastern Air Lines, and United Airlines. The previous four-times-per-week Madrid to Miami roundtrip DC-10-30 service becomes a daily Jumbojet offering on July 1.
On September 1, Iberia becomes the first airline to fly nonstop from New York (JFK) to Barcelona; passengers choosing to fly the new Barcelona Express route receive six nights free at a hotel in either Barcelona or Torremolinos.
Customer bookings climb another modest 2.8% to 14,894,485 while cargo surges by 23.6% to 736.47 million FTKs.
With 28,000 workers, Iberia is Europe’s fourth largest carrier in 1990, overseeing the 14th largest number of airline employees in the world. Additionally, the company’s 97 aircraft comprise the 22nd largest fleet. On May 25, the government grants the company permission to purchase 16 B-757-256s for $1 billion; the cost will actually be closer to $4 billion.
Chairman/CEO Muste signs a major cooperative agreement in June with Giovanni Bisignani, managing director of Alitalia, S. p.A.; the pact covers not only the joint development of new routes, but joint cooperation in technical, commercial, and other operational activities. During the summer, flights are initiated from Barcelona and Madrid to Berlin and from Bilbao to Frankfurt.
On July 15, the carrier reaches resolution with American Airlines concerning a four-month dispute over reservations systems. Four days later, Argentina agrees to sell the majority share of Aerolineas Argenti-nas, S. A. to a consortium led by Iberia for an estimated $260 million in cash and $2.01 billion in debt paper.
The Alitalia, S. p.A. pact comes into effect in August; under its terms, Iberia begins to fly the Italian line’s passengers from Madrid to Mexico City while Alitalia takes Spanish-booked travelers from Rome to Bangkok. Iberia on September 14 purchases the 48% minority shareholding in the inclusive-tour operator Viva Air, S. A. from the German state airline Deutsche Lufthansa, A. G. Viva Air, S. A. is reconfigured as a scheduled airline for the tourist trade.
Later in the year, the Majorca-based feeder Binter Mediterraneo, S. A. initiates services The airline is reorganized in October into two principal units with the entire structure overseen by corporate group headquarters.
The major operating division is comprised of three business units: Iberia Intercontinental, Iberia Europe, and Iberia Spain, while four other business units cover Iberia Cargo, Aviacion y Comercio, S. A. (AVI-ACO), Viva Air, S. A. , and the Binter subsidiaries. The support division comprises four units: flight technology, engineering, systems, and handling. Also during the month, the company begins to explore the possibility of taking shares in three more South American airlines: AVIANCA Colombian Airlines (Aerovias Nacionales de Colombia, S. A.), VIASA (Venezolana Internacional de Aviacion, S. A.), and PLUNA (Primera Uruguayas de Navegacion Aerea, S. A.). The Aero-lineas Argentinas, S. A. takeover comes into effect on November 1.
Passenger boardings ascend 4.3% to 15,500,000 (including 1.84 million on the Madrid-Barcelona shuttle service) and freight climbs 3.7% to 763.9 million FTKs. The boarding figure makes the Spanish airline the world’s 20th largest.
The payroll is sliced 10.1% in 1991 to 25,000 and the fleet now includes 114 aircraft. Seven days of strikes early in the year cost the company PTA 2.1 billion; however, the carrier’s unions do agree to accept work rules changes along with their 7% wage increase. A new terminal is opened at Barcelona’s Prat Airport in March for the company’s shuttle service to Madrid.
During the second quarter, the carrier acquires an almost total monopoly of the Argentine scheduled air transport industry. Iberia retires over $1.6 billion in debt, along with a $142.5-million foreign-debt title payment to the Argentine government (plus the $130 million in cash paid the previous year). Iberia then increases its ownership in Aerolin-eas Argentina, S. A. from 13% to 30% and acquires a 70% majority interest in Austral Lineas Aereas, S. A.
In order to increase its South American presence, the Spanish flag carrier’s consortium in April purchases 35% shareholding in LanChile Airlines, S. A.’s domestic competitor LADECO Chilean Airlines (Lineas Aerea del Cobre, S. A.) for $10.5 million; a comprehensive marketing agreement is also signed with Ladeco.
Chairman Muste resigns in June to become chairman/CEO of the Spanish-Italian independent Meridiana Air, S. A. and is succeeded by Miguel Aguilo. The same month, the U. S. government grants the airline permission to operate a minihub at Miami.
In addition, the carrier leads a Venezuelan consortium, with Banco Provincial, which is able to acquire controlling interest in the Venezuelan airline VIASA (Venezolana Internacional de Aviacion, S. A.) on August 9 for $145.5 million; the arrangement marks the first big sale of a Venezuelan state asset to a foreign buyer. A major alliance is signed with this South American carrier; it includes a management contract and marketing agreement with joint routes, code-sharing, joint frequent flyer programs, and schedule coordination.
Also during the month, agreement is reached with the Argentine government on a new formula covering Iberia’s 85% acquisition of Aero-lineas Argentinas, S. A. Although the amount of foreign debt that the Spanish must retire is reduced, $171 million is added to AA’s cost. The arrangement is completed in September, the same month the LADECO Chilean Airlines (Lineas Aerea del Cobre, S. A.) agreement takes effect.
Due to recession and the Gulf crisis, customer bookings decline 10.3% to 14,551,989 and cargo drops 18.7% to 635.17 million FTKs. Expenses exceed income and there is a $305-million operating loss.
The employee population declines another 13% in 1992 to 27,000 and the fleet now includes 8 Airbus Industrie A300B4-120/203s, 21 A320-211s, 29 Boeing 727-256As, 6 B-747-256Bs, 1 B-747-256B/C, 12 Douglas DC-9-32s, 1 DC-9-34, 2 DC-9-34CFs, 24 MD-87s, and 8 DC-10-30s.
In a move completed by summer, the carrier, in February, begins the transfer of its U. S. headquarters from Los Angeles to Miami, where a hub is created to connect European traffic with Latin America. An alliance is entered into with Air Canada, Ltd. in April providing for code-sharing on the route from Madrid to Montreal and Toronto.
The company transports passengers to the Expo’92 World’s Fair at Seville and the Summer Olympics at Barcelona. Iberia helps to sponsor both events, as well as Madrid’s year as Cultural Capital of Europe. In addition, new markets are opened at San Salvador, San Pedro Sula, and Guatemala City. The company now stations three DC-9-32s at Miami that are employed to operate a daily change of gauge operation to these points, as well as Cancun and Managua. Simultaneously, two DC-9-32s are posted to Santo Domingo in the Dominican Republic to fly services to Havana and Panama City.
On July 7, the computerized reservations system dispute with American Airlines resumes as Iberia files a complaint with the European Union accusing the U. S. major of using its jointly run reservation system to discourage passengers from using the Spanish airline. Also in July, the company receives EU Commission approval for a PTA 120-billion bailout from the government; the approval is contingent upon the funding being “the last capital injection from public funds for the duration of the [1989-1996] programme.” The arrangement prohibits Iberia from acquiring shareholding in European carriers, but does permit Chairman Aguilo’s continuing “Latin American adventure.” Preliminary discussions concerning the acquisition of a stake in Dominicana Airlines, S. A. end.
The Argentine government agrees to take its shareholding in Aero-lineas Argentinas, S. A. to 33%, but then threatens to damage its flag carrier by deregulating domestic routes. Numerous wrangles with the Argentine government and its legislature over this and manpower issues lead to a revised pact with the Iberia group, signed in October. In an effort to further reduce expenses, the workforce is reduced 12% during the year and the wages of all pilots are frozen.
Enplanements recover and grow by 11.1% to 23,172,000, but freight falls 7.4% to 588.41 million FTKs. Revenues rise 9.1% to $3.55 billion and with costs down, the operating loss is cut to $128 million. The net loss is $263.5 million.
The workforce in 1993 totals 26,000, down 3.7% from the previous year. One more A320-211, a B-727-256A, three B-757-256s, and three DC-9-32s are acquired. In January, the company begins to second 38 managers to Aerolineas Argentinas, S. A., including directors for financing and commercial, marketing and maintenance. Strategic plans are developed for massive route rationalization with the South American partners, beginning late in the first quarter. In April, the carrier joins with the American charter operator Carnival Air Lines in an application to the U. S. DOT seeking permission to code-share on routes out of Miami to New York, New Orleans, Chicago, Houston, and Los Angeles. The plan envisions the purchase of blocks of up to 150 seats on flights operated by the American carrier.
Air Seychelles signs an agreement with Iberia during the same month that provides for code-sharing flights from Madrid to Mahe via Nairobi.
The following month, a similar deal is signed with Garuda Indonesia covering joint services from Madrid to Jakarta and Denpasar. In May, Argentine company employee Manuel Moran is appointed president of Aerolineas Argentinas, S. A. During the first six months, the flag carrier loses a total of PTA 29.9 billion ($221 million). The code-sharing pact with Carnival Air Lines is approved by the U. S. DOT on June 15.
Chairman Aguilo’s turbulent and expansionist tenure comes to an end in September when he is succeeded in office by the parent INI company’s chairman, Javier Salas; another INI official, Juan Saez, is appointed vice chairman and managing director. In October, VIASA (Venezolana Internacional de Aviacion, S. A.) becomes the exclusive general sales agent for the Spanish major, as well as Aerolineas Ar-gentinas, S. A. in Colombia. A new cargo division is established to coordinate the freight operations of all three airlines in South America.
Late in the month, Saez, reporting the annual loss of $15 million on the Miami hub, recommends its closure. The first code-sharing flight with Carnival Air Lines, from Miami to Los Angeles, is completed on October 11 with an Airbus A300B4-203 leased from VIASA (Vene-zolana Internacional de Aviacion, S. A.). Simultaneously, the Spanish flag carrier ends its thrice-weekly service from Madrid to Los Angeles.
Argentina in November rejects an Iberia request that $215 million be contributed by its government to a $500-million capital pool being assembled for use in reinvigorating Aerolineas Argentinas, S. A.
Passenger boardings for the year slide 6.7% to 14,383,262 while freight drops 5.4% to 543.21 million FTKs. The operating loss reaches $124.06 million with a net loss of $487 million following right behind. The cumulative debt is now almost $1 billion.
Airline employment is cut another 3.8% in 1994 to 25,100 and the owned fleet now includes 8 A300B4-120/203s, 22 A320-211s, 30 B-727-256As, 6 B-757-256Bs, 1 B-747-256B/C, 8 B-757-256s, 10 DC-9-32s, 1 DC-9-34, 2 DC-9-34s, 24 MD-87s, and 8 DC-10-30s, 1 of which is chartered to VIASA (Venezolana Internacional de Aviation, S. A.). A total of $2.6 billion in debt still remains on those aircraft acquired after 1990. Leased units include six B-727-256As and orders are outstanding for eight A340-300s.
Early in the year, a code-sharing and block-space agreement begins with Austrian Airlines, A. G. on routes from Barcelona and Madrid to Vienna. In February, the government, following deregulation of the domestic airline market, authorizes the private carrier Air Europa, S. A. to begin competitive scheduled service over the lucrative Madrid to Barcelona route. In March, a comprehensive marketing agreement and management contract is negotiated, but put on hold, with Aerolineas Argentinas, S. A.
A marketing and code-sharing alliance is signed with United Airlines on April 18. About the same time, a code-sharing agreement is signed with Finnair O/Y covering service over routes from Madrid and Barcelona to Helsinki, via Amsterdam and Gothenburg. Later in the month, the on-again, off-again stake increase in Aerolineas Argentina, S. A. (to 85%) is on again after a higher court overturns a lower court challenge to the $500-million arrangement. Although many no longer wish to acquire the Argentine carrier, the unacceptable alternative is to let it collapse and assume responsibility for its debt. The March pact now comes into effect as code-sharing, joint routes, and a linked frequent flyer program begins.
By August, the start-up Air Europa, S. A. has seized 14% of the traffic on the Madrid-Barcelona return service; the state carrier must now offer discount fares on this important internal artery. Another new entrant, Spanair, S. A., is also becoming something of a concern. Both are based at Palma de Mallorca; their entry onto the scene will help force Iberia to push its self-reform.
In early November, Chairman Salas announces a restructuring plan designed to stave off bankruptcy and to win EU Commission approval for a government aid package worth PTA 130 billion ($1 billion). Under its terms, salaries will be cut 15%, approximately a quarter of the workforce will be laid off, an order for eight A321s is cancelled, and deliveries of four A340-300s are delayed. In addition, the U. S. investment banks Goldman Sachs, Morgan Stanley, Bankers Trust, and Salomon Brothers are invited by the government holding company INI (Instituto Nacional de Industrias) to undertake valuations of the carrier’s assets.
Airports across Spain are paralyzed on November 28 and more than 100,000 passengers are stranded in a wildcat strike by the carrier’s workers, staged to protest the state carrier’s announced plans to dismiss almost 25% of its workforce and to start selling off assets. All Iberia flights are grounded as management and the unions seek an agreement that will save the airline from financial disaster. The one-day job action ends on November 29, but costs the airline over $11.5 million in lost revenue and compensation to replacement carriers and stranded passengers. The government agrees to pay back wages of PTA 10 billion ($76 million) and the workers agree to reduce their wages by 8%, seven points less than management had desired.
On December 2, the airline’s 1,100 pilots, facing 20% salary and benefit reductions, make it known that they will not accept the pay cuts agreed to by the carrier’s other employees. The next day, the airline agrees with the unions to postpone its decision on drastic employment reductions. Talks continue until December 6 when Iberia, without an agreement from the pilots union, announces that it will impose a huge program of asset sales recommended in a plan from the American bankers. Jobs will be cut by up to 5,200 in an effort to avoid the necessity of a government bailout or bankruptcy. On December 7, the layoff figure is stated as one-fifth of the workforce.
The pilots union threatens a 12-day strike, but following several weeks of posturing on both sides, the pilots call off their job action on December 28 after having reached an accord with management. Contingent upon EU approval of state aid to the carrier, the pilots approve an 8% salary cut in exchange for a larger share in company decision-making.
In something of a footnote, one other piece of good news is received this year. After 239 judges have flown 100,000 miles on the carrier since January, Iberia defeats 29 others carriers (including two from the U. K.) to win the 1994 British National Tea Council’s “Inflight Best Cup of Tea” award.
On the year, customer bookings decline by 4.4% to 13,756,022, while cargo swells by 4.9% to 569.75 million FTKs. Revenues move up 2.9% to $3.28 billion and expenses dip 2.3% to $3.24 billion. As a result, there is an operating surplus of $45 million. The net loss “improves” to $314 million. In terms of passengers flown, Iberia is now the 22nd largest airline in the world.
The number of employees is cut by 4% in 1995 to 24,000. Company officials report, on April 18, that they have cut Iberia’s fleet by 19% as part of the state carrier’s bid to secure European Union approval for a $1.06-billion government bailout. Also in April, a memorandum of understanding concerning possible future joint operations is signed with Air Afrique, S. A. The same month, a code-sharing pact with British Midland Airways, Ltd. begins on services from Barcelona, Bilbao, Madrid, Seville, and Valencia to London (LHR) and beyond to Belfast, Edinburgh, Glasgow, Leeds/Bradford, and Teesside.
Dual-designator flights with Ukraine International Airlines commence in August between Madrid and Kiev. With EU approval still not forthcoming, pilots vote on October 20 to stage a series of one-day strikes in November to protest what they see as management’s inability to get the needed permissions and funding.
During the last week of the month, the company refuses to allow LADECO Chilean Airlines, S. A. a capital raise of $3 million. Iberia indicates that it must evaluate the South American line’s expansion strategy.
In a further effort to win EU approval, Iberia announces during the last full week of November that it is planning to sell its entire 83% stake in Aerolineas Argentinas, S. A. It is hoped that most of the company would be sold to a consortium of American banks; however, any sale would have no effect on the operating and marketing alliances in place between the two national carriers. Still, based on the October vote, pilots stage a 48-hr. walkout, beginning on November 29, that heavily disrupts the major’s operations.
On December 14, the EU Commission reports that it has approved the Spanish government’s plans to inject PTA 87 billion ($71 million) into Iberia as soon as the Spanish airline has its house in order. It also agrees that the company may apply for additional aid of PTA 20 billion ($16 million) the following year, if it improves its productivity and gains.
Enplanements inch ahead 2.6% to 13,705,800, but cargo does much better, rising 19.8% to 678.82 million FTKs. Although revenues are $5.4 billion, costs leave a $360-million net loss.
The workforce is reduced by 4,000 in 1996 and the owned fleet now includes 8 A300B4-120/203s, 22 A320-211s, 25 B-727-256As, 6 B-747-256Bs, 1 B-747-256BC, 4 B-757-256s, 5 DC-9-32, 8 DC-10-30s, and 24 MD-87s. Also operated, under charter, are 3 B-757-256As and 4 B-757-256s. Orders are outstanding for 8 A340-300s and 8 B-757-256s. Four DC-9-32s are out on lease to Binter Canarias, A. S. and one DC-10-30 is with VIASA (Venezolana Internacional de Aviacion, S. A.).
Settlement is reached between Iberia and its pilots on February 19, thereby clearing the last obstacle to an injection of EU-approved $690 million in new government-supplied capital. A code-sharing service begins in March with Syrianair (Syrian Arab Airlines) over a route from Madrid to Damascus.
With the beginning of the summer schedule on May 1, Iberia inaugurates service to four new European markets—to Hanover, Stuttgart, and Venice from Madrid via Barcelona and to Oporto from Madrid. On May 23, the company reports a $22.55-million profit for the first quarter, the first fiscal gain in this time period since 1989.
The international press reports the same day that British Airways, Ltd. (2) has under active consideration a plan for the acquisition of a $100 million 15% stake in the Spanish carrier. A block-space agreement with Korean Airlines/Korean Air (KAL) commences in June on flights from Madrid to Seoul.
The current daily roundtrip nonstop service from Madrid to Miami is doubled on July 1; the twice-daily service will be offered through September 29.
On July 26, Lebanese passenger Saad’o Mohamed Ibrahim Intissar, claiming to have a bomb, hijacks Flight 6621, a B-747-256B with 232 passengers and bound for Cuba from Madrid, and forces it to land at Miami (MIA). When Ibrahim eventually surrenders and is arrested, his bomb turns out to be a fake, assembled in one of the plane’s bathrooms from a cassette record and an electric shaver. Two Palestinians reportedly involved in planning the hijacking are arrested in Germany on July 30.
During late summer and early fall, Iberia begins the search for a U. S. alliance partner. In addition, the first four A340-313s are delivered; one is christened Rosa Chacel and enters transatlantic service from Madrid to New York (JFK).
On November 19, Spanish Transport Minister Rafael Arias-Salgado and U. S. Transportation Secretary Federico Pena meet to discuss an “open skies” agreement between the United States and Spain, a liberalization that could help the state carrier find a U. S. affiliation.
Passenger boardings accelerate 5% through November to 14,070,616 and 661.56 million FTKs are operated, a 7.8% increase. In December, Iberia notifies officials of the Venezuelan government and VIASA (Venezolana Internacional de Aviacion, S. A.) that no more money will come to the South American carrier from Madrid until it puts a radical restructuring plan into effect.
The Spanish partner proposes that VIASA withdraw from its more unprofitable routes, that 30% of the workforce be laid off (some 2,200 personnel), and that the remaining 70% have their wages frozen. In addition, restructuring costs should be assumed by Fondo de Inversiones de Venezolanas (FIV), which national privatization and investment body owns 40% of VIASA.
A net profit for the year of $24.9 million is widely reported; it will later be adjusted downward to $18.4 million.
During January 1997, the EC orders Iberia to reduce its Latin American holdings as a condition for the company receiving another $330 million in government capitalization. On January 17, following nearly a month of discussions, the FIV and VIASA employees reject Iberia’s December restructuring demand; the Spanish withdraw their plan. On January 23, VIASA’s board of directors closes down the airline and sets February 8 as the date to decide upon the carrier’s fate.
Meeting at Madrid on January 28, officials from Iberia, the Venezuelan government, and VIASA (Venezolana Internacional de Aviacion, S. A.) agree on a plan to keep the partner going. The Venezuelan government will set up a special fund to take care of their carrier’s expenses until a foreign operating partner can be signed up. Iberia, for its part, will convert $30 million, about 20% of the money it is owned by VIASA, into additional equity by taking over ownership of its fleet. It is also agreed that the Venezuelan airline will remain grounded until a new associate is located and new labor agreements are signed.
On February 18, however, FIV Chairman Alberto Poletto announces that the nation will spend no more money on VIASA (Venezolana In-ternacional de Aviacion, S. A., which lost $45 million in 1996 and had accumulated debts of $200 million. He also notes that the deal put forward the previous month does not preclude liquidating VIASA, particularly since it is now losing $250 million per month, more than twice the figure estimated.
Now that the end is at hand, Iberia pays severance to VIASA’s employees and agrees to write off its $30-million stake in return for preservation of its rights to serve Venezuelan destinations.
The company’s 1996 net profit, the first since 1989, attracts investment interest from Continental Airlines, KLM (Royal Dutch Airlines,
N. V.), British Airways, Ltd. (2), Air France, and American Airlines. In a February interview in the European edition of The Wall Street Journal, Chairman Xavier de Irala notes that, despite its profit, the company still faces acute challenges from growing competition, European deregulation, and falling airfares. These problem areas have a potential, de Irala warns, to change the government’s plans to privatize the carrier two years hence.
Consequently, a new three-year cost cutting plan will be implemented designed to boost productivity by 20% and reduce expenses 3% annually. Such an effort should bring a PTA 40-million operating profit and underscore the carrier’s obligation, under Spanish law, to remain in the black for three years prior to privatization.
Also during the first quarter, a group of Spanish regional airlines, including Canarias Regional Air, S. A. doing business as Air Europa Express, Spanair, S. A., and Futura, S. A., complain to the EC that part of the government funds injected into the state line during the fall of 1995 have been employed to finance a fare war against them. In addition, Ca-narias claims that Iberia has engaged in predatory pricing, arranging some of its schedule to directly affect private carriers such as itself. The Commission investigates.
World History
