Iberia CEO Rafael Sanchez-Lozano has resigned and is succeeded by Luis Gallego. Gallego is CEO of Iberia’s low-cost subsidiary Iberia Express and formerly was the chief operating officer of Barcelona-based Vueling Airlines.

Sanchez-Lozano’s departure follows months of contentious relations and weeks of strike action by Iberia employees in protest of a restructuring program to stop losses and eradicate legacy work practices.

International Airlines Group (IAG) and Sanchez-Lozano decided “by mutual agreement” that he will step down as CEO of Iberia and from the IAG board with immediate effect, IAG says in a statement.

“Iberia is entering its next transition phase, and I have every confidence that Luis can return Iberia to profitable growth,” IAG CEO Willie Walsh says, adding that Sanchez-Lozano led the airline through a “very difficult period in the midst of a deep recession and has completed the first important step towards returning the airline to profitability.” Sanchez-Lozano joined Iberia in 2009, shortly after Antonio Vazquez was named chairman of the company. The duo promptly highlighted the need to restructure Iberia’s unprofitable short- and medium-haul network, but plans to set up an in-house low-cost operation were met with fierce opposition, mainly by pilots.

Iberia Express started operations in March 2012, more than two years later than scheduled.

The appointment of Luis Gallego will not be welcomed by labor unions, which fear he will bring a low-cost culture and more cost savings to Iberia’s mainline operations.