Workers from Iberia airlines are striking for fifteen days, threatening not only the company (losses of 150 million are expected) but the entire tourism sector. The timing could not be worse, because companies were hoping to increase revenues thanks to an expected 78% increase in air travel to Spain during Holy Week and make up for a recent drop-off in domestic travel.
Hotels saw nightly reservations drop by 7.3% in 2012, which was 11 million fewer than 2011. The Iberia strike will extend to all areas of the company and affect partner airlines Air Nostrum and Vueling indirectly as well as other companies that use them for handling services.
The consequences will be ugly for Iberia. The airline is putting its future at risk with this strike as it attempt to make up for 900 million euros in losses accumulated over the past five years. During the first nine months of 2012, losses were growing by one million euros daily. The Spanish tourism sector is in dire straits thanks to problems with its two biggest companies. On the one hand, Iberia is struggling to pay down debt and restructure its entire organization. On the other hand, Orizonia is on the brink of bankruptcy due to cash shortages and delays from the Comisión Nacional de Competencia (CNC) has delayed making decisions about the Orizonia's urgent need to merge with Globalia. Both companies are the backbone of a sector that represents 10.8% of Spain's GDP, contribute 12.2% to the national job market and whose 2012 profits wiped away its 192% deficit.
The labor unions should think hard about the effects of an intense strike and the CNC should break down its huge bureaucracy because it threatens the survival of these two companies and represents and threatens growth within the airline sector.
