By Graham (NYSE:) Keeley
BARCELONA (Reuters) – Spanish airline Iberia will reduce the size of its fleet, the number of destinations it flies to and how frequently as the coronavirus pandemic continues to drag on demand, its chief executive officer said in a newspaper interview.
Luis Gallego also told El Pais that Iberia, part of International Consolidated Airlines Group (LON:) (IAG.L), wants to extend a temporary layoff scheme for workers, known as ERTE, until December.
“In Iberia, we will be smaller, but we will exist, something that it is not clear other airlines will be able to say,” Gallego said in the interview, published on Sunday.
“Smaller, unfortunately, with the capacity adapted to the demand. We will have fewer planes, fewer flights and fewer destinations.”
The Madrid-based airline has been losing 7 million euros per day as lockdowns to curb the spread of coronavirus have grounded planes, he said.
Iberia will withdraw 17 Airbus (PA:) A340-600 planes from its fleet, he said.
Gallego, who will take over as chairman of IAG in September, said demand in the airline industry was not expected to return to 2019 levels until 2023 or 2024.
In May, Iberia and Vueling, both part of IAG, secured 1 billion euros ($1.1 billion) of government-backed loans to cope with the fallout from the coronavirus pandemic, which has tipped the airlines industry into its biggest ever crisis.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.