Iberia eyes low-cost launch in 2012

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Spanish airline Iberia aims to launch its low-cost subsidiary Iberia Express by April 2012, it said Tuesday, hoping to improve its fortunes on Spanish routes.

"The project will start for the summer season, from around the end of March or beginning of April," Rafael Sanchez-Lozano, Iberia's managing director, told reporters.

He said Iberia was launching the low-cost airline because its short-haul operations are failing to make money and it is losing out on domestic routes to budget carriers and Spain's AVE high-speed trains.

The competition cost Iberia 78 million euros ($107 million) in losses in the first half of this year, he said, although overall the International Airlines Group (IAG), uniting Iberia with British Airways, was in profit.

"It is going to be difficult to make a profit before 2013, but we are going to try," Sanchez-Lozano said.

Iberia Express will start with a fleet of four Airbus 320 jets which it hopes to expand to 13 aircraft and 500 staff by the end of 2012.

Iberia pilots have threatened to strike, fearing the salaries offered to staff on the new line will be too low.

© 2011 AFP

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