British Airways-Iberia Merger Prompts Lawsuit

For many observers and commentators, Iberia’s merger with British Airways hinted at a skeleton in the closet since the process got cracking and bad vibes on cash-strapped Iberia began coming in. For quite a number of experts, the merger looked like an opportunity for British Airways to devour Iberia. New investigations seem to bear out this thesis, especially the evidence unearthed by AADIBERIA, the Spanish acronym for the Association of Iberia Dismantlement Victims.

According to the latest report issued by AADIBERIA in May, this association has filed a lawsuit in a Madrid courthouse against the members of the International Consolidated Airlines Group (IAG), charging the latter with violating the labor rights of the Spanish company’s employees during the agreement that gave the green light to the British Airways merger.

AADIBERIA is a non-profitable entity made up of over 2,000 members and founded in late December 2012 by a group of Iberia retirees in an effort to stand up for the rights of those who were hit by the partnership between Iberia and British Airways.

The lawsuit, filed at the Moreno-Luque Law Firm, is based on the expert report issued by the LF Castañeda Eafi Financial Consultant and led by prestigious economist Prosper Lamothe Fernandez, on the strategy followed by the IAG front office for the merging process. The report basically recounts how the group has held out on the minority shareholders, the markets and the Iberia employees, misleading and concealing information on the scope and the consequences of the merger, chiefly in terms of pension plans.

One of the highlights of this report points to how Iberia and British Airways have been faring differently in market terms. “The Spanish company is being subjected to a major overhaul on the assumption that the employees cost way too much and their wages are higher than those earned by the British Airways staff,” the report indicates.

“However, Iberia’s management, in a stupid and possibly painful decision at the very least –let alone ignoring the information on that matter- decided to accept that BA’s assets were higher than those of Iberia’s,” the report goes on to say.

According to the abovementioned report, the merger was poorly assessed and executed, calling the role played by Spanish executives and consultants in the process as “bashful every step of the way.” The report also says that IAG’s policy is not at all in the best interests of Iberia and it has even made a dent in the Barajas Hub as an increasingly larger number of passengers are jumping ship in a worrisome fashion. “This policy rubs Iberia, the Barajas airport and Spanish tourism the wrong way,” the report reads.