Low cost competition forces Iberia to cut routes

25th January 2005, Comments 0 comments

25 January 2005, MADRID- Spanish national carrier Iberia is considering culling a number of European and domestic routes from its schedule in the face of fierce competition from low-cost carriers.

25 January 2005

MADRID- Spanish national carrier Iberia is considering culling a number of European and domestic routes from its schedule in the face of fierce competition from low-cost carriers.

The Spanish daily El Pais reported the company is increasingly unable to keep pace with its low-cost competitors, who receive an estimated EUR 10-17 (USD 12-20) subsidy per ticket from local authorities on some routes.

So far, Iberia has refused to comment on the story.

The newspaper did not mention specific routes facing the potential withdrawal of Iberia services but in recent years the carrier has been struggling to match the fares of no-frills airlines such as Ryanair and EasyJet.

The Spanish carrier has lost its former monopoly at certain provincial airports such as Almeria in the southeast and Jerez in the deep south, and El Pais reported that the price war would ultimately force the end of some Iberia routes.

Ireland's Ryanair is in April to propose flights between London and Santiago de Compostela for fares ranging from EUR 27-69, not including taxes.

El Pais reported Iberia's normal fare for the route was EUR 130 more expensive.

Ryanair is already flying in and out of 13 Spanish airports and seeking to branch out to offer services at six more, directly creating 4,000 jobs in Spain.

Last year, the company carried some four million passengers either to or from Spain.

Low-cost rival EasyJet carried six million by comparison in 2004, an 18 percent rise on a year earlier.

According to El Pais, despite offering prices generally higher than those of Ryanair, EasyJet has captured a 33 percent Spanish market share for flights between Britain and Spain.

The company flies out of nine Spanish airports to ten destinations in other European states.

In October, Iberia general director Angel Mullor said the carrier was "collating information" on subsidies received by Ryanair from autonomous regional authorities to operate at their airports.

Mullor threatened to take the issue to the European Commission if evidence emerged warranting a complaint.

[Copyright EFE with Expatica]

Subject: Spanish news

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