November 2022, Virtual
21 November 2022, Hilton London Metropole
The International Airlines Group has denied suggestions that it will axe more of loss-making Iberia’s short-haul routes following the completion of its purchase of Spanish budget airline Vueling.
The acquisition of the controlling stake by IAG has also provoked speculation that British Airways could abandon some of its Gatwick routes to Spain, leaving them to Vueling, which has a much lower cost base.
However, an IAG spokeswoman said: “Vueling has got its own business model, we have no changes planned. It is of value to us as a stand-alone business.”
Vueling already serves several routes from the UK (some seasonal), including the former Iberia services from Heathrow to La Coruna and Bilbao. It also operates Gatwick to Barcelona and Palma, Cardiff to Alicante, Barcelona, Malaga and Palma, and Edinburgh to Barcelona. A route from Heathrow to one of its Italian bases, Florence, has just begun.
Last year, the carrier made a pre-tax profit of €33.2 million, with revenue up 27% to €1.1 billion. IAG already held a 45.85 per cent stake in Vueling via its ownership of Iberia and has now increased this to a controlling 90.51 per cent in a €123.5 million bid.
In a possible signal of radical changes, Vueling’s chief executive Alex Cruz will report direct to Walsh, not Iberia. Walsh is keen to turn around Iberia’s fortunes and many of the former Iberia feeder routes to its hub at Madrid have already been taken over by Iberia Express, which IAG established last year with a cost base reported to be 40% below the mainline operation.