Iberias profits burn

SPANISH airline Iberia Airlines has reported a staggering 90 per cent drop in profits for 2008, down to 32 million (US$41 million).

In a statement, the company said that air-transport industry’s slowdown last year had been exacerbated by the global economic decline too quickly for the sector to respond to. Its attempt at adapting was “in an insufficient proportion to compensate for the drop in demand.”

“2008 was not a positive year for the industry, we have been highly affected by the hike in fuel prices,” chairman Fernando Conte said.

“It’s complicated to know how 2009 will be but I think it will be rather weak, at least for the first half,” said Conte.

Iberia plans to cut frequency of flights and to freeze salaries of employees. It will also delay delivery of three Airbus A340 airliners. In addition it is still in talks with British Airways over some form of merger or partnership. A decision is expected later this month.