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Spanish airline cancels services

MADRID, Spain -- Thousands of passengers booked on flights with Spain's Iberia airline are facing chaos after the company announced a suspension of all services after 99 pilots resigned.

The suspension of all national and international flights was due to begin at midnight local time (2200 GMT) on Thursday.

It comes as part of an ongoing industrial dispute between Iberia's management and the pilots' union Sepla.

Airline president Xabier de Irala said the move will affect some 80,000 passengers.

"Because of this extreme situation, I'm forced to suspend temporarily and immediately from midnight all of the company's flight operations," Irala said.

The 99 pilots belong to the pilot's Sepla trade union and are responsible for flight operations, and Irala said he announced the action because Iberia could not guarantee the safety and the well-being of its passengers.

Sepla said the pilots' resignations did not come as a surprise to the airline because they had taken place over the last two weeks, the state news agency EFE reported.

Iberia's pilots, who are demanding improved pensions and wage increases which the company says amount to 20% hikes, have been calling one-day strikes during a busy period for the Spanish airline's busiest periods of the year.

Pilots had called strikes for each Tuesday in July and each Monday in August.

The striking pilots forced Iberia to cancel 230 flights worldwide on Tuesday, in a move that cost the airline between $5 million and $7.1 million.

Iberia's 1,875 pilots say the airline has reneged on a 1995 agreement on wage moderation during privatisation.

• Iberia Airlines

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