Time to maneuver for Iberia
The answer is: very little!
For those readers that might not be familiar with the whole story, Spain's flag carrier Iberia, now part of the IAG Group, is starting a new low cost airline that is to take over most short -haul routes from its parent company, so that what's left of Iberia can concentrate on the long-haul, primarily its most important market: the links between Spain and South America.
This move is due to the need to lower costs, forced by the strong competition Iberia is facing at its own hub by low cost carriers (Ryanair is already number one airline in Spain!).
A new airline in Spain then? hardly...well at least from the point of view of passengers (if you are an Iberia pilot, this is another matter). From the informations that are being made public, Iberia Express product is not going to be significantly different from that Iberia currently offers on short-haul routes:
Same aircraft, as Iberia Express is going to use Iberia's current A320-family fleet
Same route network as Iberia Express will be progressively taking over some of Iberia's domestic and, at a later stage, European routes (while possibly Iberia proper might keep some key European routes with heavy business traffic such as those from Madrid to London Heathrow and Barcelona).
Same level of service: while it is still not sure whether Iberia Express will offer single-class service or provide some sort of premium service, for those flying economy there are possibly going to be any noticeable differences, since Iberia has long been a no-frills carrier when it comes to economy class on short-haul routes.
I also assume the new airline will use the same commercial channels than Iberia and that you will also be able to buy connection flights and multi-leg flight itineraries, after all one of its major roles would be to feed Iberia's long-haul, and Iberia's American network would not be viable without its large proportion of connecting passengers.
Why go all the way and create a new airline then?
It's primarily a legal and labour relations matter...as IAG chariman Fernando Vazquez explained at a recent conference at the London School iof Economics, Spanish labour laws made almost impossible to change the labour relations framework within the company, so it was easier to start an entirely new entity and transfer its assets to it. Of course this has not gone down well with Iberia's unions that have resorted to a protracted industrial action campaign.
IAG's CEO, Willie Walsh, seems unimpressed, as he is well aware that Iberia is IAG's underperforming leg (while BA made €592M in 2011, Iberia lost €61M.) and can ill afford to keep its high-cost structure if it wants to survive and be around in the long-term.
Iberia is not alone in this move, Air France is also trying to cut costs the same way, although its efforts have focused on French provincial cities that had limited Air France service, rather than in its own hub.
It is not the first time Iberia enters the low cost market, it already did it with Clickair, a low cost it started to compete with then-startup Vueling in Barcelona (with whom it later merged) and in the last few years through its shareholding in vueling, but these were projects with a life of their own...we'll see how it works when applied to its own brand...
By the way, for those of you that are into planespotting, here is
a picture of what looks like Iberia Express' first aircraft, there is no consensus as to whether this is the final livery or not, though!
