Iberia, a “money machine” thanks to South America and the Business-Corriere.it class

With over one million euros in losses a day, Iberia was on the verge of bankruptcy, like Alitalia, a few years ago. Then in 2012 the board approved the Plan de futuro, a package of sacrifices including redundancies (3,141), wage cuts (14% for pilots and flight attendants, 7% for ground staff), a greater focus on South America and the creation of the low cost division Iberia Express. A decade – and a pandemic – later, the results are these: in 2022 Iberia was the best company of Iag (holding which also includes British Airways, Vueling Aer Lingus and Level) with 272 million euros of profits, in the first quarter of this year it recorded a positive operating result of another 66 million and remains at the top of the world for punctuality. Iberia’s planes fly full at this time. People are showing a huge desire to fly and travel, explains al Courier Maria Jess Lpez Sols, Iberia’s Chief Commercial Officer, during a chat at the carrier’s headquarters in Madrid. And Italy is part of this evident recovery.

The numbers

According to our National Civil Aviation Authority (ENAC), 14.2 million people traveled between Italy and Spain last year – on direct flights, not far from the 16.2 million in 2019. Of these, one in ten boarded Iberia planes (1.35 million). A significant part then continued across the Atlantic: in particular towards South America where Iberia is the first company by offer. According to Airline Data Inc, around 95,000 took a flight with a stopover in Madrid between Italy and the United States, i.e. an average of 259 a day, in both directions. And Madrid is truly a hub as shown by the data provided by ch-aviation: in the week 3-9 July 48.2% of the entire offer of seats at the Iberia airport, followed by the carrier that intends to acquire, Air Europa, with 15 .5%, then Ryanair with 10.7%.

Who flies today

Traveling has become a priority, not only for tourist reasons, but also to see one’s families again, reasons Lpez Sols. For this reason, already in 2022 we made a bet by restoring all the offer that was in 2019 to further increase it this year. The balances have changed since the pandemic came out. If those who travel for vacation and personal reasons have returned en masse, the corporate component is still 10-20% lower than in 2019. But those who expect empty Business class seats are wrong. Today premium classes are busier than they were in 2019, there is a lot of demand from customers looking for a more relaxed way to travel.

The dear flights

The corporate segment – made up of those who travel for work reasons – is in any case recovering the values ​​of 2019, claims the chief commercial officer of Iberia, also because Spain has become a good place for international events. Today many people come to Madrid for tourism, but at the same time several companies have chosen the Spanish capital to organize their events or bring their employees. In the background, however, there is the discussion on the increase in flights. Are high fares the new normal? Depend on supply and demand – replies Lpez Sols -. What we’re doing is offering the same seats as in 2019, but not what other companies are doing. This means that until we all catch up then demand will be higher and prices higher.

The markets

If you look at the markets served by Iberia, North and South America are the ones that are growing, even more than in 2019, says the manager. Asia remains off limits for now. The question doesn’t exist yet – she explains – she, some countries are reopening now, in others people are waiting to travel. Then there is the closure of Russian airspace which forces us to take longer routes, over two hours for our flights, and this increases operating costs. Italy is a market served for point-to-point flights – that is, people move between the two countries – and for connections with North and South America. The traffic continuing from Italy to America and vice versa is growing and this allows us to expand the offer.

Lufthansa’s plans for Ita

The chief commercial officer does not seem particularly concerned by Lufthansa’s plans to grow Ita Airways especially on routes to Latin America. Regardless of what others do for us North and South America are the main markets, our strategy is to make Madrid the most used transit port between Europe and the Americas. This, in the future, also with Air Europa, the second company in Madrid and which Iberia intends to acquire. The EU Antitrust, according to experts, will certainly not be tender and will ask for significant compensation measures, starting with the sale of various slots. We don’t know what Brussels will decide – says Lpez Sols -. But certainly the union is the best thing that can happen for Madrid, for Spain, for customers because it will allow us to fly to more countries and improve the service.

Inside Iag

The relationship with the other IAG companies is excellent: the holding allows us to make economies of scale that we would not have been able to do on our own. But also to operate in the markets. With British Airways we work closely to decide commercial strategies and win together, also with American Airlines thanks to the transatlantic joint venture. And the Spanish low-cost Vueling? We don’t step on our feet – he replies -, they fly point to point in Europe, we are more concentrated on the intercontinental.

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