ROUTES EUROPE: IAG takeover will not impact Vueling or Iberia Express

By Oliver Clark & Piers Evans

The takeover of Spanish carrier Vueling by the International Consolidated Airlines Group (IAG) will not “change anything” at the hybrid carrier, a senior executive has told The HUB.  Speaking at the Routes Europe event in Budapest, Fernando Estrada, Strategy and Alliance Director, said IAG’s shareholding boost in Vueling from 50 per cent to almost 100 per cent would have no direct impact on the Spanish carrier’s network, decision-making or structure given its successful growth over recent years.

“They are not going to change anything, because why change something that is working, we are growing about 20 per cent a year and making a profit so why change Vueling,” he said.

Estrada pointed out that IAG and Vueling only overlapped on three routes, with Iberia operating its hub operation out of Madrid, while Vueling concentrated on point-to-point traffic out of bases such as Barcelona.  However, he did not rule out future “synergies” between the carriers.

“IAG has two big airlines – Iberia and BA, one at Madrid and the other at London Heathrow. We are flying to Madrid simply as a destination, while at the same time operating out of Barcelona, on the other hand there are synergies in flying to other airports, so we do not see any big conflicts, but there could be synergies,” he said.

While some 20 per cent of Vueling’s traffic is now transferring and that figure continues to grow, Estrada emphasised that the carrier’s hybrid business model and “strong position” on a number of European routes would remain unchanged. IAG increased its holdings in Vueling to 90.51 per cent in April and Chief Executive, Willie Walsh said at the time that Iberia Express would continue to perform the lion’s share of feeder flights into Madrid.

It is also business as normal at fellow low-cost operation Iberia Express, where commercial director, Silvia Mosquera said a clear difference between the models of Vueling and Iberia Express make any mergers unlikely in the short term.  “Iberia Express is not only a point-to-point airline,” she told The HUB during an interview at Routes Europe. “We have a double objective. We have, of course, point-to-point flights but we also feed Iberia long-haul routes in Madrid.”

Mosquera, who previously worked at clickair and then Vueling before helping to launch Iberia Express a year ago, said the carrier is now shifting away from domestic routes amid Spain’s economic turmoil and in particular is seeking to add German routes next season.  “The German market is one of the markets that are performing better. We have some problems with demand in the domestic market so we need international routes as they are working better,” she said.

Current routes to Frankfurt and Dusseldorf are attracting transfer passengers for Iberia flights from Madrid to destinations in South and Central America such as Sao Paolo and Mexico, said Mosquera.  Alongside Germany, North Africa is also in the carrier’s sights. “Marrakesh is a good destination for our business model. We look for routes with a mix of leisure and business because we want routes all year round,” she explained.

Yet industrial action by employees of Iberia will probably prevent Iberia Express from expanding on its current leased fleet of 14 A320s before next summer at the earliest.  “Until the problems with the unions are solved, we can’t incorporate more aircraft,” she said. Therefore, Madrid will remain Iberia Express’s only base for this year and the next. “After that we will expand our business outside Madrid,” added Mosquera. In the carrier’s summer schedule of 23 routes, only Vigo – Palma and Palma – Tenerife flights operate from outside Madrid.

Sourced by Routes News