(MENAFN - AFP) Iberia is to shed 4,500 jobs to save Spain's biggest airline from collapse and more may follow amid the economic crisis in the indebted eurozone nation, parent group International Airlines Group said Friday.
"Iberia is in (a) fight for survival," the carrier's chief executive Rafael Sanchez-Lozano said in a statement issued by IAG, which also owns British Airways.
"It is unprofitable in all its markets. We have to take tough decisions now to save the company and return it to profitability.
"Unless we take radical action to introduce permanent structural change the future for the airline is bleak. However this plan gives us a platform to turn the business around and grow," he added.
Sanchez-Lozano said "the Spanish and European economic crisis has impacted on Iberia, but its problems are systemic and pre-date the country's current difficulties."
IAG said it was announcing "a comprehensive plan to save Iberia after record losses -- and return it to profitability."
The parent group unveiled a "reduction of 4,500 jobs to safeguard around 15,500 posts across the airline."
IAG added that a deadline of January 31, 2013, had been set to reach agreement with unions over the cuts.
"If agreement is not reached, deeper cuts and a more radical reduction in the size and scale of Iberia's operations will take place to secure the natural long haul traffic flows at Madrid and safeguard the company's future."
In a bid to stem Iberia's cash losses by mid-2013, the Spanish airline will slash its network capacity by 15 percent and downsize its fleet by 25 aircraft, including five long-haul carriers.
Separately on Friday, IAG announced that the parent group's net profits dropped 24 percent in the third quarter compared with the equivalent period last year.
It said in an earnings statement that profit after tax fell to 202 million euros (258 million) in the three months to September 30 compared with net profit of 267 million euros in the third quarter of 2011.
IAG added that Iberia had made an operating loss of 262 million euros in the nine months to September 30, offsetting an operating profit of 286 million euros at British Airways.
"We want Iberia to be strong and successful," IAG chief executive Willie Walsh said on Friday.
"This turnaround plan is critical for Iberia and for the future of Spain. A strong and profitable Iberia can create jobs and boost tourism, a key driver in Spain's economic recovery."
He added: "For too long the narrow self interest of the few has damaged the long term future for the many. We will not hesitate to take the necessary steps to protect the interests of our shareholders, our customers and our employees."
Friday's developments came a day after IAG said it had launched an offer for full control of Spanish low-cost carrier Vueling Airlines, which is already almost half owned by Iberia, for 113 million euros.
It comes as Vueling looks to expand its network to a total of 100 airports, with London and Frankfurt among the new destinations.