"The aggression of Walsh today has surprised us and it does not help," the pilots' union leader, Justo Peral, said after the shareholder meeting. He described the confrontation between the two sides as war. In what IAG sources called part two of a conflict between staff and management that started years ago while Walsh was running British Airways, the company said it would now present a legal challenge against a government arbitrator's decision on Iberia's attempts to set up a low-cost airline. That decision both agreed that the airline, Iberia Express, was legal, and settled a pay deal for the pilots. But AIG now claims the arbitrator overreached his powers. "The question is, do we want a strong Iberia that can grow or do we want to see Iberia continuing to shrink in size and in relevance?" Walsh asked. "Iberia Express is important, Its performance is excellent," he told shareholders. "It will be profitable on routes where Iberia makes significant losses."