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IAG tells Iberia to prepare for a changing Europe-Latin America competitive setting

Analysis

Iberia holds a leading market position in the Europe to Latin America market, but other European legacy carriers are adding capacity in this emerging market and are nibbling at Iberia's share of the pie.

Demand in the Spanish market for Latin American routes is still strong yet weakening owing to the persistent euro debt worries and contraction of the country's economy while Iberia is struggling to keep unit cost under control and in-flight amenities in the back of the cabin have not kept up with current comfort and configuration standards.

The pressure is mounting on the other side of the route also, with Latin American carriers developing from small regional players with a mediocre service offering into strong cross-border groups and potentially global players investing in new fleets and on board products.

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