Tales for Tapas: Compromise in the air

Significant progress this week in resolving the Iberia airlines dispute after the compromise package put forward by government-appointed mediator Gregorio Tudela was accepted by Iberia’s parent company, International Airlines Group (IAG), and by most of the unions.

Clearly, a solution is good news for travellers – Iberia’s troubles have had a knock-on effect with major airport disruptions and thousands of flights cancelled during stoppages in February and earlier this month; more strikes had been scheduled in the coming weeks in the absence of a settlement.

It will also come as a relief to IAG, which claims to have been losing €3 million for each day of strike action, compounding Iberia’s annual losses – a whopping €98 million in 2011 and more than three times that in 2012.

So, agreement is welcome.

But is it the right agreement?

IAG had insisted that Iberia must drastically scale back its route network, reduce salaries and shed almost 4,000 jobs. The unions argued that the airline’s survival could not be predicated on cuts but could be secured instead through aggressive and competitive expansion.

The compromise agreement has focused on pruning redundancies to a figure nearer 3,000 and on making pay cuts less drastic.

Yet horse-trading is no substitute for strategic consensus – as one of the cabin-crew unions awkwardly dissenting from this week’s deal has pertinently pointed out. The union says a genuine settlement must include a comprehensive development plan to carry the airline forward.

If 4,000 redundancies really were necessary in order to ensure commercial viability, one might reasonably ask, are 3,000 redundancies going to have the necessary remedial impact on the company’s bottom line?

Likewise, if an ambitious programme designed to increase Iberia’s competitiveness was central to union demands at the start of the dispute, do moderated wage cuts and a reduced number of redundancies represent a sufficiently imaginative and far-reaching solution?

A compromise that doesn’t address fundamental problems may offer only temporary relief.

Membership dues

By the same token, temporary glitches may signal more serious difficulties. This week it was revealed that the European Science Foundation (ESF), which administers more than €50 million worth of grants to scientists in 29 countries, has temporarily suspended funding for Spanish institutions because Spain hasn’t paid its membership dues.

Fees are outstanding from the Ministry of Economy and Competitiveness (in this instance, it seems, putting economy before competitiveness).

It has been noted that while the Spanish government has declared its commitment to a range of multilateral science initiatives the authorities in Madrid have reduced or delayed payments to several prestigious organisations, including the European Space Agency and the European Organisation for Nuclear Research (better known as CERN).

The outstanding ESF bill is modest by national budget standards, amounting to €700,000, but the reputational damage caused by this and other delinquencies could be more serious. It would be a pity if the country’s considerable international prestige in the field of science and technology were compromised by ministerial penny-pinching.

Paying bills

By contrast, Spain’s global reputation for intellectual excellence and innovation received a welcome boost this week when the American Academy of Arts and Sciences named the Navarrese architect Rafael Moneo as one of three honorary laureates.

Moneo, who won the Prince of Asturias Prize in 2012, is celebrated for an architectural style that is both original and sympathetic to its surroundings. His is the vision behind two very different but highly regarded additions to the topography of Madrid, the extensions to the Prado and the Bank of Spain respectively.

Another American Academy laureate named this week is Bob Dylan – who, like Moneo, rejoices in a rare gift for breathing new life into old forms, in Dylan’s case helping to turn folk music into contemporary and compelling art. It was Dylan, too, who sang about time being like a jet plane – both having the disconcerting propensity to move too fast. Simple but apt.

There will be many who are relieved this week that Iberia planes are moving anywhere at all. Others will ask how long the airline can pay its bills while losses mount.

The Spanish government, meanwhile, though cash-strapped, probably ought to reconsider the wisdom of late payment in the case of modest but important international financial obligations.

To read more by Anna Maria O’Donovan visit My Spanish Interlude.