Iberia puts focus on Latin America to defend MAD hub from LCCs

Logo: Iberia.com While Iberia seems happy to hand over much of its European network from Barcelona to its low-cost ‘partner’ Click Air, it appears to have no intention of doing anything similar at its Madrid hub, where the airline is now based in an award-winning terminal designed by Richard Rogers.

Iberia’s chairman Fernando Conte
Iberia’s chairman Fernando Conte speaking at the airline’s 80th anniversary celebrations on 14 December 2007.

Serving over 100 destinations from Madrid

Iberia flies to 104 destinations from Madrid (MAD) and has no direct competition on around 13% of the frequencies it operates. This is a relatively low figure compared to other European hub airports. The 27 routes on which it faces no competition include long-haul flights to Guatemala, Puerto Rico, South Africa and two US services (to Chicago and Boston), international routes primarily to Italy (Genoa, Pisa and Turin) and France (seven destinations) and domestic routes including Murcia and Seville.

Chart: Iberia at Madrid
Source: Derived from OAG Max Online data for w/c 25 February 2008

Iberia faces competition from at least two airlines on nearly half of its flights, three competitors on one in five flights and four competitors on three major routes.

Country IB frequency Competition (weekly frequency)
Milan MXP 26 Air Europa (7), Alitalia (21), easyJet (14), Vueling (7)
Paris CDG 14 Air Comet (14), Air France (62), easyJet (7), Vueling (18)
Rome FCO 43 Air Comet (9), Air Europa (12), Alitalia (13), Vueling (12)
Source: OAG Max Online for w/c 25 February 2008

These three routes represent around 4% of Iberia’s capacity at MAD, though due to the mostly shorter sector lengths involved only around 2.5% of total ASKs.

Image: Terminal 4 at Madrid Barajas
The award-winning Terminal 4 at Madrid Barajas opened in February 2006. It is home to Iberia, its franchise Air Nostrum and all Oneworld partner airlines.

Iberia’s traffic at MAD grew by 10.1% in 2007

In 2007 Iberia carried 22.4 million passengers through its Madrid hub, a 10 percent increase on 2006. This represents just over 43% of the 51.6 million passengers who passed through the airport. If Air Nostrum’s traffic is taken into account this adds another two million passengers representing a further 4% of passenger demand. Traffic peaks occur in July and October but seasonality is relatively low with a peak to off-peak ratio (July to February) of just 1.3.

Chart: Iberia passengers at Madrid
Source: AENA

Seven other carriers handled over one million passengers at Madrid led by Spanair (6.1 million) and Air Europa (4.9 million). The battle among the LCCs is intense with easyJet carrying 2.2 million passengers, Vueling 1.8 million and Ryanair 1.1 million.

Domestic routes have largest share of capacity

Analysis of winter schedules reveals that Iberia’s biggest country market is Spain with over half of all flights operating on domestic routes.

Country Frequency Share Capacity Share Number Of Routes
Spain 57.1% 53.5% 32
Italy 7.0% 6.3% 9
France 9.1% 5.9% 12
Germany 4.1% 3.9% 4
UK 2.4% 3.0% 1
Source: OAG Max Online for w/c 25 February 2008

With 283 weekly departures Barcelona represents a fifth of all Iberia’s domestic capacity at Madrid. Iberia only operates one route from Madrid to the UK with 56 weekly departures for London Heathrow.

Focus on Latin America

In terms of geographic region 84% of capacity is on flights to Western Europe with just over 10% to Latin America. However, Latin American routes account for 50% of ASKs produced by Iberia at Madrid compared with 37% for Western Europe and 7% for North America. Central Europe hardly features in Iberia’s network with just one route to each of Poland, Romania, Russia and the Czech Republic, and two of these routes were only started this winter.

The major Latin American markets served are Buenos Aires (16 weekly flights), Sao Paulo (13), Mexico City (11) and Bogota (nine) with eight other destinations served on a daily basis (Caracas, Havana, Lima, Quito, Rio de Janeiro, San Jose, Santiago and Santo Domingo).


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