Striking Iberia workers protest against job cuts

Thousands of workers facing pay and job cuts at loss-making Spanish airline Iberia on Monday staged a second wave of protests that could ground nearly 1,300 flights this week.

Iberia, part of International Airlines Group , is battling competition from low-cost airlines and high-speed trains as well as a deep recession in Spain, where one in four workers is without a job.

The strikes are a blow to Spain's tourist-dependent economy as it gears up for the spring and summer season. Tourism contributes about 11 percent to the country's economy.

Last week Iberia, Europe's biggest carrier to Latin America, said it would push ahead with plans to cut 3,800 jobs, or nearly one fifth of its staff, despite union opposition.

Workers marched from nearby Iberia offices to arrive at Terminal 4 at Madrid's Barajas airport at midday on Monday. Police had told protesters to stay in the arrivals area of the terminal, but they spread out across the airport.

"There were 10,000 of us this morning...On the motorway we made a line longer than 2 kilometers, it was incredible," said Diego Rejon, an Iberia maintenance worker.

Labour union UGT estimated 8,000 workers had taken part in the protest. The police were not immediately available for comment.

There was no violence, unlike the first round of strikes, which began on February 18, when union members clashed with police. The final demonstrations are planned for March 18 to 22.

Iberia has canceled 431 flights between Monday and Friday - 15 percent of trans-Atlantic flights, 38 percent of flights to Europe and Africa and 53 percent of domestic flights.

Another 850 flights operated by Vueling , Air Nostrum and Iberia Express will also be canceled because Iberia ground staff, such as baggage handlers, are also on strike.

The February and March strikes are the biggest in the airline's history and cost IAG 3 million euros ($3.9 million) a day, Chief Executive Willie Walsh said, while also causing disruption to other airlines.

Of the 40,000 Iberia passengers affected by the industrial action, the airline said 38,000 had been booked onto other flights.


Walsh, who faced down strikes at British Airways and Irish operator Aer Lingus when he was chief executive at both, seemed prepared to tough it out with Iberia.

"The market believes that by hook or by crook Walsh will get the job done with Iberia," said Davy Research analyst Stephen Furlong.

An independent mediator brought in by the Spanish government has so far failed to resolve the pay dispute.

BA and Iberia sealed an $8 billion merger to create IAG in 2010 that helped both stem huge losses following the worst industry downturn in decades.

IAG paid 545 million euros in restructuring costs related to its overhaul of Iberia in last year. Iberia's high costs and declining revenue drove IAG to a 631 million euro ($819.29 million) operating loss for 2012.

Some Iberia workers still harbor bad feelings about the deal.

Spanish union Sepla claim Iberia assets were used to plug a deficit in the BA pension scheme and that Iberia workers would be contributing to BA pensions until 2026. Sources close to IAG say this is untrue and that the BA pension scheme is ring-fenced.

($1 = 0.7702 euros)

(Additional reporting by Tracy Rucinski; Writing by Clare Kane; Editing by Erica Billingham)