Iberia Strays Off Course

In the struggle by Europe's airlines to plot a new course for deregulated skies, Spain's Iberia seemed to have a rare advantage: a coherent flight plan. Its strategy has been to fortify its "natural" market--Latin America--and funnel traffic between there and Europe through Madrid. But four years and three South American acquisitions later, Iberia is lost. Its Latin strategy has dragged it deep into the red (chart) and could ground the airline--if militant unions continue to block the wage and job cuts necessary for a planned $1 billion state bailout.

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