IAG (Parent Of BA, Iberia, Vueling & Aer Lingus) To Start Barcelona Based Long-haul Low Cost Airline

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IAG is wary of Norwegian that is starting to fly certain long-haul destination out from Barcelona in the Summer of 2017. The city is the base for IAG’s Spanish Vueling subsidiary.

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To counteract this Norwegian’s expansion, IAG the parent of British Airways, Iberia, Vueling and Aer Lingus is now starting new long-haul low cost operation from the same city and hoping to offer short-haul transfer connectivity via Vueling.

You can read more about this development on Reuters (access here), on WSJ (access here) or from El Pais (access here).

Here’s an excerpt from Reuters:

British Airways-owner IAG (ICAG.L) said it will start low-cost long-haul flights from Barcelona to U.S. destinations in June next year, in an apparent response to increasing budget competition on transatlantic routes.

The move comes after a summer in which low-cost airlines, lead by Norwegian Air Shuttle ASA (NWC.OL), have shaken up the Europe to North America travel market by offering ticket prices as little as half what rivals charge.

And From WSJ:

The move by International Consolidated Airlines Group SA follows close on the heels of similar bets by other so-called full-service carriers. These legacy airlines are increasingly fighting back after a bevy of budget airlines—mostly European upstarts—have invaded the lucrative trans-Atlantic market, offering cheap tickets, sometimes half the fare of traditional carriers.

That move has represented one of the biggest shake-ups of the U.S.-Europe aviation market in decades. It promises to eventually drive down ticket prices on those routes, and it has already increased the number of second-tier airports served by European links.

And finally from El Pais:

IAG says it is considering two options for new its long-haul routes: to create a new airline, or to pool IAG’s existing resources. “We have not taken a final decision yet,” said company sources.

The firm has chosen Barcelona as its hub for this new business segment because this is where its low-cost carrier Vueling is based, and this will allow it to funnel passengers from its extensive European network on to long-haul flights. IAG will use two Airbus A330s, and says the initiative will create 250 jobs.

Conclusion

This new low cost subsidiary will only have two A330’s and is supposedly looking at starting flights perhaps to Los Angeles, San Francisco, Havana, Santiago de Chile and Japan based on the reports. Not sure how many of these they can actually start with only two frames and what happens when one goes mechanical? Norwegian has already announced the San Francisco and Los Angeles flights out from Barcelona.

Lufthansa has Germanwings (had very rocky long-haul start), Air France-KLM has Transavia and now British Airways is trying to get its own low cost long-haul operation up and running (Vueling is low cost and one could argue that so is Iberia and BA mainline in economy as well).

European full service airlines didn’t react fast enough when European LCC’s were starting their flights within the continent. Now they are trying to ensure that they don’t make the same mistake when it comes to long-haul ones and the likes of Norwegian and Iceland based WOW.

I am not huge fan of flying using LCCs, although do use them when it is convenient like taking direct Barcelona to Malta flight earlier this year on Vueling (paid for the first row seat).

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