International Airlines Group (IAG) is planning a major restructuring of underperforming Spanish airline Iberia after the group reported an operating loss of €253 million ($308 million) for the first half of 2012.

“There remains a stark difference in the performance of our subsidiaries,” says Willie Walsh, IAG’s chief executive. “British Airways made an operating profit despite rising fuel prices while Iberia’s losses deepened.”

A restructuring plan for Iberia will be finalized by the end of September. It is likely to include “short-term downsizing, network reshaping to deliver higher unit revenues and a re-evaluation of all aspects of the business,” says Walsh, who adds that job losses are likely. “Iberia’s problems are deep and structural and the economic environment reinforces the need for permanent structural change.”