IAG to incorporate AirEuropa into Iberia

IAG published its plans for AirEuropa yesterday.

The airline is to act as a separate brand, but as a subsidiary of Iberia, Spain’s flag carrier.

The idea is to create a fourth European mega-hub to rival Amsterdam, Frankfurt and Heathrow at Madrid Barajas, which is arguably under utilised.

IAG plans on giving Iberia and it’s new acquisition the objective of expanding Heathrow connectivity and providing its OneWorld partners with better connections to South & Central America and the Caribbean – areas that both airlines specialise in but also compliment.

AirEuropa will leave StarAlliance as soon as possible and move over to OneWorld.

IAG also plans to integrate AirEuropa into its overall aircraft buying and maintenance programmes.

However the purchase isn’t going to be entirely uncontested. RyanAir has already said that it gives IAG almost as much control at Madrid as it has at Heathrow – already a very sore point with a number of airlines. IAG owned airlines control some 57% of Heathrow slots and will have around a similar figure at Madrid, especially if Vueling and Level are included with AerLingus, BA and Iberia.

RyanAir plans on asking for the authorities to force IAG to hand over some of its Madrid slots to other airlines.

Iberia and OneWorld face some steep competition in South America with LATAM leaving the alliance for Delta’s Skyteam after it bought a huge stake in the group. AirEuropa should help overcome the problem.