Spanish national carrier Iberia has confirmed that the board of its parent company International Airline Group (IAG) has approved the launch of its new subsidiary carrier Iberia Express. The start-up is being formed to provide a lower cost base and enable the flag carrier to compete more effectively in the Spanish domestic and European market.
Iberia Express will start operations in summer 2012 on short- and medium-haul routes and will over time develop new markets and destinations and strengthen IAG’s Madrid hub. It will offer a two-class service with business and economy seating and alongside point-to-point traffic will also provide transfer feed onto Iberia’s long-haul network. It will operate an initial fleet of four Airbus A320s but plans to expand to 13 aircraft by the end of 2012. These will all be sourced from Iberia’s existing fleet.
“Iberia Express will have lower operating costs than Iberia’s loss-making short- and medium-haul business,” the Spanish national carrier said in a statement. This will be achieved by recruiting new staff at market rates and by increasing aircraft utilisation.
Iberia has already established a successful formula in Barcelona following its involvement in the formation of clickair in October 2006. The airline, now merged with Vueling, provides a lower cost base for air services in Spain’s second city. Although these flights are operated under the ‘VY’ code, many are operated under a codeshare agreement with Iberia, meaning passengers can still book ‘IB’ services.
Vueling is now the largest operating carrier at Barcelona’s El Prat Airport with 23.0 per cent of the available weekly seat capacity, providing over 600 weekly flights and almost 95,000 weekly seats from the city. In fact, Iberia has already started to use Vueling to support its network from Madrid, with it already offering flights to Barcelona and Paris CDG from the Spanish capital. This winter it will provide a similar service on routes to Amsterdam (daily), Berlin Tegel (daily) and Copenhagen (three times weekly), which will be operated under a codeshare with Iberia.
Iberia unsurprisingly dominates the traffic at Madrid’s Barajas Airport. In the past year it had a 25.8 per cent share of the 33.6 million bi-directional O&D passengers, but this has slipped from 28.4 per cent in the previous 12 month period as the carrier has faced increasing competition, mainly from low-cost rivals. The most notable growth at Madrid has come from Ryanair which has expanded its network significantly over the past year - it has seen its share of the traffic grow from 15.5 to 17.1 per cent. easyJet has also seen a positive growth during this period from 9.4 to 9.8 per cent.
The formation of Iberia Express and its much lower average seat mile costs, will enable Iberia to compete more effectively with these carriers from next summer and it will be interesting to see which routes it will initially serve from summer 2012.
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