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UPDATE 1-Iberia to cut costs by extra 37 mln euros

Published 10/22/2009, 01:37 PM
Updated 10/22/2009, 01:39 PM

* To lay off ground staff, freeze pay and hiring

* Cabin staff over 55 to be retired

* Essential to revamp Iberia-CEO

(Adds details)

MADRID, Oct 22 (Reuters) - Iberia on Thursday announced plans to cut a further 37 million euros ($55.40 million) from its costs over the next two years.

The Spanish airline, fighting the worst crisis the industry has ever seen, will temporarily lay off 200 ground staff and freeze pay across the company in 2010 and 2011.

The savings are in addition to a plan for 2009-2011 which aimed to boost operating profit by 450 million euros via cost cuts and efficiency improvements.

"It's essential to revamp Iberia with imaginative moves to create a solid and viable project," Iberia's CEO Rafael Sanchez-Lozano said in a statement.

The company, which is in talks to nerge with British Airways , is also freezing new hires and retiring all cabin staff over 55.

The company said it would continue to pursue its policy to cut short- and medium-haul routes and bolster its long-haul business.

European airlines have been slashing jobs and scrambling for extra revenue to beat the industry's worst recession in a decade in a strategy risking labour disruption. (Reporting by Judith Macinnes; Writing by Paul Day; editing by David Cowell)

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