Page last updated at 12:39 GMT, Friday, 20 November 2009

Pay deal leads union to call off Iberia strike action

Grounded Iberia planes at Madrid airport
Spain's Iberia has agreed a deal to merge with British Airways

Unions representing staff at Spanish airline Iberia have called off planned strike action after a preliminary agreement with management.

On Thursday, Iberia said it had agreed an average 4% pay rise for cabin crew.

The crew had planned strikes for 30 November to 2 December, and 14 December to 18 December, over the airline's plans for a hiring and wage freeze.

Iberia wants to reduce costs to combat falling profit, and agreed a merger deal with British Airways last week.

The company made a loss of 165.4m euros ($245.4m; £148.9m) in the first half of the year.

"We have removed the [strike action] notice after a verbal agreement reached with management, that we should sign [on Friday]," said Alfredo Gutierrez, spokesman for the SITCPLA union.

Last week, cabin crews went on strike, forcing the airline to ground hundreds of flights. They also staged strikes in October.

Iberia and BA have agreed a deal to merge by the end of 2010. It would create the world's third largest airline.

Both airlines have been hit hard by falling passenger numbers during the downturn, and have said that the tie-up would save them 400m euros a year.

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