Spanish airline Iberia said today it would cut its flight capacity by another 5 per cent in the second half after weak demand for air travel resulted in a bigger-than-expected first-half operating loss.
The company, which is in talks to merge with British Airways , said losses before interest and tax (EBIT) reached €276.9 million in the first half to June, compared with an adjusted loss of €32.3 million a year ago, and missing a €257 million euro forecast by analysts.
The group swung to a net loss of €165.4 million from a profit of €21 million in the same period last year, as revenues slumped 18.9 per cent to €2.166 billion.
The airline sector's yields have been depressed by fewer travellers in first and business class and the elimination of fuel surcharges on tickets following a drop in oil prices.
Iberia said it would focus its efforts on boosting yields in line with demand in the second half and would study further cost cutting measures.
The company has already said it was unlikely to post a profit in 2009 if the crisis persists but predicted a return to profitability in 2010.
Reuters