Iberia to finance Transformation Plan with its own funds

Iberia will use its own resources to fund the 2012-2015 Transformation Plan it unveiled last week, which is aimed at restoring profitability and ensuring future viability.

Iberia’s cash position now stands at 1,074 million euros, which enables the company to make new investments, cover its operating losses, pay its debts, and meet the costs of its transformation plan, centred on eliminating unprofitable routes, increasing revenues via a a new sales plan, changing the operating model for short and medium haul flights, cutting payroll costs, and reviewing all its non-strategic business lines.

From 2008 through September, 2012, Iberia’s cash position shrank from 2,272 to 1,074 million euros. The company spent 446 million on staff cuts (mainly through early retirements), 394 million on investments (chiefly advance payments for aircraft and investments in maintenance and systems), 334 million on repayments of debts and 134 million to cover losses. During this period the airline booked extraordinary income of 109 million euros from the sale of its stake in Amadeus.