International Consolidated Airlines Group (IAG) stated (29-Feb-2012) Iberia’s short-haul unit revenues were “far below 2008 levels” in 2011, exacerbated by rising fuel costs. The carrier also confirmed that Iberia Express will launch operations in summer 2012 with an initial workforce of 500 staff and a fleet of A320 aircraft from Iberia. The carrier, 100% owed by Iberia, will be managed independently from Iberia, which will also provide maintenance and handling at a reduced cost. The carrier will commence operations with four A320s to increase to 13 aircraft by year end. In 2013, its fleet size will growth to 16, increasing to 28 in 2014 and 40 in 2015. The carrier expects a positive impact to operating profit from Iberia Express in excess of EUR100 million. 45% of the gain to come from crewing costs, 25% from handling services and operational areas, 25% from overheads and general costs and 5% from increased asset turns. [more – original PR] [more - CAPA Analysis]
Iberia Express to grow fleet size to 40 in 2015, to have positive impact in excess of EUR100m
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Ryanair's 117million pax in 2016 tops European airline groups. The first time an LCC topped rankings
For the first time ever in Europe, in 2016 a low cost airline carried more passengers than any other airline or airline group, as Ryanair's 117 million passengers pushed Lufthansa Group's 110 million into second place. Ryanair had beaten Lufthansa itself, but not the whole Lufthansa Group. IAG's first full year of including Aer Lingus helped it to take third place from Air France-KLM. Europe's number two LCC, easyJet, was ranked fifth.
The big five can be expanded into a big seven to include Turkish Airlines and the Aeroflot Group, although these two had contrasting growth rates in 2016. A chasing pack of middle sized airline groups includes three LCCs (Norwegian, Pegasus and Wizz Air) and three legacy airlines with varying challenges to establishing sustainable profitability (SAS, Air Berlin Group and Alitalia).
Most of the faster growing airline groups in the top 20 are LCCs and the main growth drivers for Europe's big three legacy groups are their LCC subsidiaries. Just outside the top 20 are some fast growing legacy airlines in Eastern Europe, demonstrating the potential there. Nevertheless, unless there is a big merger or acquisition, Ryanair looks set to remain at number one for some time.
IAG plans long haul low cost from Barcelona and mulls a new dedicated brand
IAG has detailed plans to start long haul low cost airline flights from Barcelona to the US, Latin America and Asia in Jun-2017. The project involves two Airbus A330s and will create up to 250 new jobs. Tickets for the first destinations are expected to be on sale by Feb-2017 or Mar-2017.
One of the key outstanding issues is which IAG airline brand will operate the flights. In an interview published on 22-Dec-2016 by La Vanguardia, the widely read and respected Barcelona newspaper, CEO Willie Walsh said that IAG may create a new brand for the project. British Airways, Iberia or even Aer Lingus – which has the lowest unit cost among IAG's long haul airlines – are also possibilities. However, Vueling "will continue in its strategy of European flights".
Among Europe's big three legacy airline groups, IAG is the only one not to have announced long haul low cost plans previously, although its LCC strategy has been the most successful in short/medium haul. Plans by the LCC Norwegian to launch long haul routes from Barcelona in 2017 may have had a catalytic effect on IAG's thinking. In the past IAG has been proactive in creating new platforms, while this move appears a little more reactive.