Negotiations between Iberia, the Spanish airline owned by FTSE 100 (FTSE: ^FTSE - news) constituent International Airlines Group, and its pilots over restructuring plans have threatened to stall less than two weeks before a deadline to reach an agreement.
Spain's powerful pilot union SEPLA agreed to talks with the Spanish flag carrier over its plans to axe 4,500 jobs and cut its aircraft fleet by almost a quarter.
But the union is said to be "frustrated" after hearing no response from the Spanish airline following preliminary talks last Monday, at which SEPLA presented an alternative restructuring plan, and warned "time was running out".
The pilots agreed to a pay cut of 26pc and to reduce its workforce by 10pc, in what it called "the most important concessions to date" but admitted that they were not optimistic about a deal being struck.
"We haven't ruled out further strike action," a spokesman from SEPLA told The Sunday Telegraph , and said they were preparing to meet Iberia management tomorrow in a last-ditch attempt at an agreement. Management at Iberia, which merged with British Airways in 2011 to create IAG, is also understood to be exasperated by SEPLA's decision to leave negotiations to the last minute.
A spokesman for Iberia said the aviation group is still negotiating with SEPLA and other unions that will be affected by the overhaul. Iberia's aim is "to reach an agreement" with unions, the spokesman added, but sources warned that the two sides are still "far away" from striking a deal.
Willie Walsh, the chief executive of IAG, has warned that Iberia which has been haemorrhaging cash at a rate of €1.7m (£1.4m) a day is in a "fight for survival" and will face "deeper" cuts and "more radical" restructuring if negotiations do not reach a successful conclusion by January 31.