The decline of the Spanish airline Iberia should be analyzed closely. Today it is holding a meeting of shareholders from the IAG -- a parent company formed by Iberia, British Airways and Vueling -- to decide what airplanes it will buy over the next two years even though it is unlikely that the company will actually add to its fleet.
The argument to not overhaul the fleet is that Iberia does not have a plan for its future after saying no the the labor unions. This plan was implemented by former top executive Rafael Sánchez Lozano, who left his position on March 27. His sucessor, Luis Gallego, presented a new plan to the IAG board yesterday.
IAG is making several arguments in support of slowing down Iberia's fleet overhaul process. Most important, before it buys 44 new planes the company needs to start turning a profit. Iberia is stuck between a rock and a hard place, because in addition to having to fix payroll issues, it is struggling to run its business with an outdated fleet of planes and low cash flow.
Since Iberia joined IAG, it has only bought eight A330-300 planes. The holding company seems to not trust in Iberia, because its leadership has not figured out how to manage the company during the crisis and Vueling is taking over some of Iberia's territory.
With its wings clipped, Iberia will struggle to stay in the air as it faces the consequences of poor management from Antonio Vásquez, who could not figure out how to operate during the crisis or handle the company's labor struggles.