Luis Gallego, president of Iberia Airlines, has announced at a business conference in Madrid today that Iberia’s fleet will be reduced over the next five years. As the airline struggles to compete with other carriers that receive more aid, he said the reduction would not be temporary.
Iberia will emerge from the pandemic with a smaller fleet
As reported by Reuters, at a business summit called by the CEOE (Confederación Española de Organizaciones Empresariales), the president of Iberia, Luis Gallego said,
“The Iberian fleet is going to be smaller over the next five years. It is not temporary but structural.”
Mr Gallego, who will take over from Willie Walsh as chairman of IAG in September, says that, as the airline becomes more indebted by the necessity of state loans, it will become smaller. According to Cinco Dias, he said,
“ICO endorsements are helpful, but it is difficult for us to compete with airlines from other countries where more aid and guarantees are being distributed.”
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He added that the airline would need to reinvent itself. As well as cutting its fleet, Iberia is expected to adjust its workforce. Although Mr Gallego wouldn’t provide specific details, he said the airline would adapt its fleet by speeding up the retirement of planes, renegotiating deliveries, and not extending lease contracts on other aircraft.
Spain’s tourism is in danger without planes
The CEOE summit was organized to discuss the recovery of the Spanish economy post-COVID-19. El Independiente reports Mr Gallego as saying,
“Without planes, there is no tourism, and without tourism and without activity, our country is in danger.”
He stressed the importance of tourism to the Spanish economy, providing 12% of GDP, and the fact that over 80% of international tourists arrive by plane. He has called for a renewal plan for European aviation that would need to be headed by the Spanish government. He said,
“We need a plan to help airlines emerge from the deepest crisis in aviation history, to contribute to more sustainable aviation with cleaner airplanes, and to support the European aviation ecosystem (manufacturers, airports, airlines)”
Many airlines are downsizing fleets
Iberia is not alone in its downsizing. The brutal impact of the biggest crisis in aviation history has caused many airlines to take steps to adjust their fleets for the foreseeable future.
Lufthansa has retired five Boeing 747s and sent seven Airbus A380s to a Spanish aircraft graveyard. The airline has cut 11 A320s from its fleet and grounded 17 A340s for at least 12 to 18 months.
The CEO of British Airways, Alex Cruz, said that that BA is facing a significant scale-back over the coming years. Earlier this month, the BA franchise, Comair, announced that it was set to cut its fleet by 50%.
Last month, easyJet announced that it would be cutting as much as 30% of its workforce as well as reducing the size of its fleet. It has also deferred the delivery of 114 new A320neo aircraft until after 2022.
These are just a few of the airlines that are adjusting their workforce and fleets as they attempt to plan their survival in the fallout from the global pandemic. The aviation industry already looks very different and will do for years to come.