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Willie Walsh, the head of aviation giant International Airlines Group, has accused Spanish unions of spreading anti-British “lies” in a bid to prevent restructuring at Iberia which is haemorrhaging €1.7m (£1.4m) cash a day.
Spanish unions have accused IAG of using cash from Iberia to fund British Airways, the other airline in the group.
There have also been calls in Spain to dismantle the merger of BA and Iberia after IAG announced last month plans to cut at least 4,500 jobs at the Spanish flag carrier, almost a quarter of its total workforce.
Last week unions decided to call off strike action, which was due to start on Friday, to avoid disruption for Iberia passengers during the festive season. However, they have raised the prospect of strikes in January.
Mr Walsh said there was nothing unions nor the government in Madrid could do to dismantle the 2011 merger between IAG and BA, despite claims to the contrary. IAG is a listed company owned by its shareholders.
“What they [the unions] have tried to do is promote this anti-British view,” Mr Walsh told The Sunday Telegraph in Seoul where BA is launching a new route.
“They have had to lie to people to do that. They have talked about a lot of things, they say BA has taken cash out of Iberia – it’s all nonsense.”
SEPLA, the powerful pilots union in Spain, has campaigned for the merger to be unwound, describing it as a “flagrant disregard” of Spanish interests.
On Friday, several thousand workers staged a protest at Madrid’s Barajas airport holding banners reading “T4 is Spanish and not British” and “we have been sold to pirates”. Perplexed travellers arrived at the airport to be met with chants of “British, Go Home”.
Spanish airline workers have been lobbying the government to intervene, not least because Bankia, the struggling Spanish lender that was nationalised earlier this year, owns a 12pc stake in IAG.
However, Jose Manuel Soria, the minister of Industry, Energy and Tourism, said last week the government would not “interfere” in IAG decisions.
Mr Walsh has insisted no funds from Iberia, which made operating losses of €262m in the first nine months of the year, had been diverted to BA.
IAG has warned unions in Spain that they have until January 31 to accept its proposals or it will take a “more radical” approach to the restructuring.
Mr Walsh earlier this week reiterated the urgency with which IAG needed to overhaul Iberia, given its heavy losses.
“It can’t continue in its current form and without question we will restructure it,” he said.