Iberia

Iberia's in-flight magazine i.e. IBPLUS has announced that the Spanish national airline is going to be embarking on a major Asian expansion from 2009 onwards by launching flights to many cities in that region. The magazine mentions that studies have carried out and short listed cities that would warrant nonstop flights from the airline's Madrid hub are Tokyo, Shanghai, Delhi, Beijing and Hong Kong only.

The article also mentions that IB acknowledges that for all of these routes the O&D traffic from Spain would be minimal thus making airline heavily reliant on 6th freedom traffic generated from its USA, UK, Portugal, Northwest Africa and Latin America operations to feed its Asia bound flights.

Analysis :

This is a bold move undertaken by IB which has its pros and cons attached to it. Out of all the cities mentioned by Iberia's magazine, only HKG and PVG warrant nonstop flights where as PEK, DEL & NRT do not.

DEL is well served by numerous EU carriers and there is nothing special for IB in the Spain-India market to necessitate it flying there. Most of the passengers on board IB's MAD-DEL flights would be low yielding economy class ones from USA & UK and not high yielding business class ones.

As for NRT, it is next to impossible for a new airline to get decent slot timings at the airport and therefore, it would be best if IB code shares with BA via LHR or CX via HKG to NRT.

By being a key member of One World, having flights to Hong Kong is warranted as IB can code share with partner Cathay Pacific via HKG to many regional destinations where traffic potential exists. To HKG, it can also attract a lot of passengers & cargo from Morocco, Brazil and Argentina via its MAD hub. Similarly, CX can code share with IB via MAD to Portugal, North Africa and Latin America.

One reckons PVG would be a better market for IB than PEK because not only is it the financial capital of China but also Air China already offers flights twice a week nonstop from PEK to MAD thus by flying to PVG nonstop from MAD, IB can have a nice niche market all for itself. To PVG, cargo loads would do very well year round and by having an extensive Latin American network, it can feed a lot of pax from GIG, GRU & EZE to PVG; both the high yielding businessmen and the leisure/tourist types.

Concluding, only PVG & HKG should be seriously looked into by IB by having both routes receive 4 weekly flights flown nonstop from MAD using an A 343 to initially test the respective markets before upgrading to daily flights. But IB must ensure that its PVG & HKG bound flights connect conveniently in both directions to its Brazil & Argentina bound flights via MAD as these 2 markets will provide the major lifeline for the routes.