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Iberia settles dispute over layoffs and cutbacks

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MADRID, Spain — Spanish flag-carrier Iberia on Friday settled months of bitter dispute over layoffs and cutbacks by striking a final deal with unions to cut ground staff’s salaries, managers said.

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MADRID, Spain — Spanish flag-carrier Iberia on Friday settled months of bitter dispute over layoffs and cutbacks by striking a final deal with unions to cut ground staff’s salaries, managers said.

Management and labour unions representing a majority of ground staff agreed on a seven-percent pay cut and a salary freeze until 2015, Iberia management said in a statement.

The agreement, yet to be formally approved by the labour groups, followed thousands of job cuts last year and deals with cabin crew and pilots who accepted a 14-percent pay cut.

Iberia’s chief executive Luis Gallego called Friday’s agreement “a milestone in the history of the company”.

“This allows us to lay the foundation for Iberia to move forward on the path of profitable and sustainable growth,” he told a news conference.

Francisco Rodriguez, a UGT airline workers’ representative, said: “This agreement guarantees the jobs of more than 20,000 workers.”

Iberia workers staged months of strikes and protests last year against the cuts planned by International Airlines Group, the holding company for Iberia and British Airways, which merged in 2011.

They had accused IAG of trying to dismantle the pride of Spanish civil aviation for the benefit of BA.

With Friday’s agreement, “the aim is for Iberia to be once again this country’s leading airline as it always has been,” Rodriguez said.

Executives said the airline was forced to cut its fleet and services last year after logging 850 million euros ($1.1 billion) in losses between 2008 and September 2012.

After the protests, management and unions struck a deal a year ago to cut 3,100 jobs with improved severance payments and lighter salary cuts.

Iberia then cut its operating losses overall in 2013 to 166 million euros, after a loss of 351 million euros a year earlier.

Third-quarter operating profit at British Airways meanwhile surged to 477 million euros, from 268 million euros.

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editor

Editor in chief is Linda Hohnholz.