To better compete against Ryanair and easyJet, Iberia plans to launch a new low-cost airline called Iberia Express. Low-cost rivals have been encroaching on Iberia’s home Spanish market for years but this move is part of an effort to substantially improve the Spanish flag carrier’s profitability.
Iberia Express will operate out of Madrid airport with four aircraft from next summer. The plan is to expand its fleet to 13 aircraft by the end of next year.
The Spanish pilots’ union, Sepla, could impede the launch as it is maintaining that the creation of the new company is illegal and violates agreements signed between Iberia and British Airways when they merged. Sepla is reported to be considering strike action even though Rafael Sánchez-Lozano, Iberia’s chief executive, sought to reassure staff that no job cuts would be made at the flag carrier following the creation of Iberia Express, which will recruit new staff.
Iberia is losing money on its short-haul routes but needs to maintain them to feed profitable long-haul routes. The expectation is that Iberia Express will quickly take over all of Iberia’s short and medium-haul, even though the airline has said this will not happen.