Things in the Sky

Iberia posted a net loss of 92.6 million euros in the first quarter, and in a press release the Spanish carrier detailed some of the adjustments it would be making.

There will be some capacity cuts. While the airline won’t be dropping any cities from its route map, there will be some reduced service. As a result, five A320s will be taken out of service.

The airline is working on some measures that is says will reduce losses by 110-125 million euros. These include temporary layoffs, a hiring freeze, cutting back on rental space, etc. The airline also announced a decrease in investment spending on projects like such as renovation projects by about 80-90 million euros. But, the airline does say that:

However, all investments aimed at improving services to customers will continue, such as the spending of 7 million euros to improve VIP lounges at the Madrid hub and elsewhere. The renovation of tourist class on long-haul aircraft will also go ahead.

I do hope Iberia knows what it’s doing with that one. While I’m all for trying to improve the customer experience, I wonder if these improvements will have any effect on revenues. (Such as if the refurbished VIP lounges will help attract more premium passengers.)