Iberia flies back into the red

Madrid - Spanish airline Iberia said on Thursday it fell into the red in 2009 with a deep net loss in the last quarter as the recession dented demand for air travel, especially for more profitable premium seats.

Iberia, which has plans to merge with British Airways, said in a results statement that 2009 marked "one of the most difficult periods of its history".

The carrier posted a worse-than-expected net loss of €273m last year despite a cost-cutting programme and cuts in routes and frequencies. It had posted a net profit of €32m in 2008.

Revenues fell 19 percent to €4.23bn. A poll of four analysts by Dow Jones Newswires had predicted that Iberia would post a 2009 net loss of €256.3m and revenues of €4.41bn.

Iberia forecast more tough times due to the global economic downturn, uncertainty over a recovery in demand for both tourist and business class seats and volatile oil prices.

The company posted a loss of €91m in the fourth quarter of 2009, nearly five times the loss of €19m posted during the same year-ago period.

Revenues during the quarter plunged 19% to €1.08bn from €1.33bn during the fourth quarter of 2008.

Iberia's load factor rose to 79.2% in the quarter from 77.5% in the year ago period.

Roughly a third of Iberia's revenues come from its domestic market Spain, which has been mired in recession since the end of 2008 as the global financial crisis hastened a correction that was already underway in its once-buoyant property sector.

BA and Iberia plan to seal a definitive agreement in the first quarter for a merger to create the world's third largest airline by revenue.

Earlier this month BA forecast a record loss in its current financial year owing to weak demand for air travel and despite sharp cost cutting, underscoring the challenges faced by the sector and the need for a merger.

- AFP