Iberia has not ruled out a merger with Air France or Lufthansa in place of current suitor British Airways, its finance director said Wednesday as the airline offered more proof of a "spectacular" fall in business.
Enrique Dupuy later told journalists that Iberia had not had contact with either the French or German groups regarding a merger but it had carried out a detailed analysis of a tie-up with both, and he said the results were encouraging.
"A merger with BA is a good fit for Iberia, but a merger with Lufthansa or Air France would be quite a good fit as well. We have spent a lot of time examining these alternatives, and of course they are not ruled out.
"Perhaps the most attractive target is British Airways but we also have very attractive alternatives," Dupuy told a conference at Madrid's stock exchange Wednesday afternoon.
Earlier in the day, Chairman Fernando Conte told a news conference that possibilities existed with other partners but now was not the right time to examine them.
"We have to focus ourselves on the solidity of our results," he said ahead of the carrier's annual shareholders' meeting.
Since last July British Airways and Iberia have been trying to create an airline to rival Europe's "mega-groups" as Dupuy described Air France and Lufthansa.
Yet a successful conclusion to tortuous negotiations is still not in sight and Conte stressed there was no predetermined deadline for the talks to conclude.
He again highlighted uncertainty around BA's massive pension deficit as an issue. The Spanish airline may choose to see a full actuarial valuation of the fund from BA pension trustees, due out in late summer, before making its final move.
PRICE WAR
Conte said falling demand, particularly in the lucrative business segment, had sparked a price war. He said further capacity cuts above and beyond the 4.3 percent reduction already announced for this year were on the cards if business continued to be weak as were more job cuts.
Iberia is trying to reduce its costs through a four-pronged crisis plan: cut capacity, reduce staff costs, cut other expenses and halve non essential investments.
"I don't see demand as bad for the summer, what's happening is the quality of revenue is quite frankly, poor.
"One reason is the fall in business traffic and the other is everyone is fighting for a smaller number of customers, so fares are falling," Conte said.
Business on the key Madrid-Barcelona route, where a new high-speed rail link has already grabbed more than 40 percent of the market, has deteriorated since January, Iberia executives said, and total air and rail traffic in April dropped 15 percent year on year.
Conte added that its target to reduce the 20,000-strong work force by around 10 percent through temporary layoffs and early retirements over the next year might not be enough.
"I think that if the crisis continues or deepens, our current layoff plans will be insufficient," he said.
