New Owners and Strategy for Spanish Carrier
Operating from Barcelona (its largest base) and Madrid, Spanair's network is largely domestic, representing nearly 80% of its 1321 total weekly departures (Source Flightbase 14-20 June 2010).
Until now, Star Alliance member Spanair's international network from Barcelona has concentrated on serving Stockholm, Copenhagen and Munich from Barcelona, with 42 weekly international flights and an extensive network to 17 domestic destinations. (Flightbase 14-20 June 2010).
But the dynamics are about to change though, as its new owners are introducing 15 International routes this Spring, with a view to building up a hub at Barcelona. (The carrier was wholly owned by SAS Airlines until last December, with ownership now split between SAS (20%) and Catalan Investors (80%).
Earlier this week Spanair announced its first scheduled routes to the UK. From May, the carrier will begin a five-times weekly to Edinburgh from Barcelona, as well as serving Madrid (three weekly) and Barcelona (four weekly) from Birmingham.
Entering the UK market - what's the significance?
Jim Paton, Spanair's strategy director told Routes News that the carrier is reacting to 'missed opportunities' in the market - including the collapse of Flyglobespan, resulting in the loss of the Edinburgh-Barcelona market. "No other carrier has stepped in yet to fill the gap but we can now meet this need," he said.
Spanair will also re-establish a direct link between the UK and Spain when bmibaby drops its service from Birmingham to Barcelona in June.
Paton explained that the new routes will also be able to feed and enhance its domestic network - putting Spanair in a stronger position where its Barcelona network competes heavily with low-fare carriers.
He added: "The UK is an important part of our international expansion. We feel the market is very poorly served outside London from Spain on a year-round basis. Our new routes to Edinburgh and Birmingham will enable passengers not just to connect to Barcelona and Madrid, but to our domestic destinations that we serve all-year - such as the Balearic and Canary Islands.
"This is where we're filling in a gap- especially where LCC routes tend to be more seasonal," said Paton.
The UK represents Spanair's second phase of international expansion, as it recently announced new services to Mediterranean destinations, including Tel Aviv, Istanbul, Venice, Algiers, Belgrade and Zagreb, which will be rolled out between April and May.
Competition in Barcelona
Spanair is seizing an opportunity to grow its presence in Barcelona, where it is currently the third largest carrier in the market, behind Vueling and Iberia, according to Flightbase scheduling data.
The strategy fits where Iberia has a clear focus on growing Madrid for its short-haul network and Vueling is focused on the O&D market.
With no based operation from easyJet or Ryanair in Barcelona (El Prat), Spanair has an opportunity to dominate the market using its low-cost base strategy.
"We recognise that we are up against competition in all the markets we are in and our strategy is to be the leading network carrier at Barcelona - feeding traffic over to our extensive domestic network. With these new routes, we will be closer to a 30% international and 70% domestic operation and we will continue with our international expansion."
How Can Spanair compete on Cost?
Spanair's restructuring continues as the full-service carrier moves towards an all-airbus fleet. Its fleet currently comprises 19 A320s, five A321s, seven MD 82/83/87s and four Boeing 717s.
"A full Airbus fleet will give us complete flexibility in crew and aircraft deployment that we haven't historically had. In the last year we have downsized our fleet from 45 to 35 and in doing so, we have increased our productivity, operating virtually the same number of flights but with around 20% fewer aircraft. This in turn enables us to optimise our aircraft capacity and schedules in the way that low-fare carriers tend to."
He concluded: "We are offering something different to the LCCs - not just point-to-point seasonal services but also routes with year-round connectivity through interlining."
As a Star Alliance member, Spanair offers 39 international codeshare destinations with its partners. The carrier has just announced it will codeshare with Singapore Airlines on the Barcelona to Singapore routing.
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