[Anonymous]

[Matinée-Allstars]

From IAG Website:

NEW IBERIA SHORT AND MEDIUM HAUL SUBSIDIARY

IAG’s board has approved the launch of Iberia’s new subsidiary airline Iberia Express which will operate part of Iberia’s short and medium haul network.

The subsidiary is being established to compete effectively in the Spanish domestic and European market. Over time it will look to develop new markets and destinations and strengthen the Madrid hub, creating new jobs for the Spanish economy.
Iberia Express will start operations in summer 2012 offering business and economy seats at competitive fares from Madrid Barajas. In addition to direct traffic, it will also provide transfer feed onto Iberia’s longhaul network.

The subsidiary will have a single A320 fleet with four aircraft initially and 13 aircraft by the end of 2012. All the aircraft will 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 subsidiary will recruit new staff at market rates and have improved aircraft utilisation. Initially, maintenance and ground handling has been awarded to Iberia.

The creation of Iberia Express will not change the terms and conditions of existing Iberia employees or Iberia’s existing relationships with Vueling and Air Nostrum.

[Scandinavian]

Very offensive move by Iberia which should be good for shareholder value since Iberia’s flight deck and cabin crew have historically had very costly labour agreements.

Interesting to see how flight and cabin crew unions react / reacted to this since Iberia Express will actually take over aircraft to / from destinations that are currently flown by mainline Iberia. In other words this is not a new carrier designed to service another market segment as GO and Jetstar were when they were created. Using a new carrier with lower cost labour agreements to fly an airline’s current routes is usually one of the most contentious issues in labour negotiations.

In some ways this mirrors BA’s mixed fleet, except Iberia also seem to be hiring flight deck on lower rates too.

Veuling has only limited operations from Madrid so there shouldn’t be too much competition between them and Iberia Express.

[Author]

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