Iberia to set up new airline for short-haul, medium-haul flights; signs code-share pact with Brazil’s GOL

In another development, Iberia Airlines has signed a code-share agreement with GOL Airlines, the carrier based in Sao Paulo, Brazil, aimed at gaining access to the Brazilian market.

Iberia Airlines is at present trying for a merger with British Airways, the national flag-carrier airline of the United Kingdom.

Iberia said that it will focus on long-haul flights, especially those that connect Europe and Latin America.

The new airline, which will be based in Madrid, the capital of Spain, will fly on short-haul and medium-haul routes, where there is tough competition, and will feed and distribute traffic to Iberia Airlines’ growing network of long-haul routes, the statement explained.

The proposed airline, not yet named, is to operate as a wholly owned subsidiary of Iberia Airlines.

The new airline – to start flying from 2011 – will connect Iberia’s hub in Madrid with those cities in Europe where passengers need to fly to Spain to catch a long-haul flight, the statement explained.

The board of Iberia Airlines, the statement added, approved other steps to better the company’s financial situation.

These measures include a freeze on hiring for the period of the cost-cutting plan, layoff of all cabin-attendants above the age of 55, expanding the present layoff plan to cover around 200 ground-based employees, a company-wide freeze on wage in 2010 and 2011, as well as extra savings of nearly 37 million euros yearly in overhead costs.

The airline had announced in August 2009 that it was in the red in the second quarter, having suffered a net loss of as much as 72.8 million euros ($109.2 million). In contrast, it had earned a net profit of 21.2 million euros in the same period a year before.

Iberia Airlines and British Airways had declared in July 2008 that they were planning to merge an all-share transaction, which would lead to the creation of one of the largest airlines in the world.

Meanwhile, Iberia Airlines has signed a code-share agreement with GOL Airlines, based in Sao Paulo, Brazil, aimed at gaining access to the Brazilian market.

In a press release, GOL, the second biggest carrier Brazil, said that the code-share pact will enable Iberia Airlines to enhance considerably its presence in Brazil.

At present, Iberia operates twice-daily flights between Madrid and Sao Paulo, besides one service daily between Madrid and Rio de Janeiro.

As per the code-share pact, Iberia Airlines can add its code to flights of GOL from Sao Paulo and Rio de Janeiro to 13 destinations in Brazil – Brasilia, Florianopolis, Belo Horizonte, Fortaleza, Curitiba, Goiania, Foz do Iguaçu, Natal, Manaus, Recife, Porto Alegre, Vitoria, and Salvador de Bahia.

The code-share agreement has to be approved by Brazil’s aviation authority before it is implemented.

In addition to the code-share pact, Iberia Airlines and GOL are considering linking their frequent-flyer programmes, Iberia Plus and GOL’s SMILES, respectively. If the linking takes place, Iberia Plus cardholders can add points on any GOL flight, and GOL’s SMILES cardholders will get points when they fly with Iberia.

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Iberia Airlines, the national airline of Spain, has announced that it will set up a new airline, by 2011, in order to operate on its short-haul and medium-haul routes.The move is a part of the carrier’s efforts to cope with decreasing demand as well as stiff competition from rivals, especially from budget carriers like Ryanair and easyJet, Iberia Airlines said in a statement.

In another development, Iberia Airlines has signed a code-share agreement with GOL Airlines, the carrier based in Sao Paulo, Brazil, aimed at gaining access to the Brazilian market.

Iberia Airlines is at present trying for a merger with British Airways, the national flag-carrier airline of the United Kingdom.

Iberia said that it will focus on long-haul flights, especially those that connect Europe and Latin America.

The new airline, which will be based in Madrid, the capital of Spain, will fly on short-haul and medium-haul routes, where there is tough competition, and will feed and distribute traffic to Iberia Airlines’ growing network of long-haul routes, the statement explained.

The proposed airline, not yet named, is to operate as a wholly owned subsidiary of Iberia Airlines.

The new airline – to start flying from 2011 – will connect Iberia’s hub in Madrid with those cities in Europe where passengers need to fly to Spain to catch a long-haul flight, the statement explained.

The board of Iberia Airlines, the statement added, approved other steps to better the company’s financial situation.

These measures include a freeze on hiring for the period of the cost-cutting plan, layoff of all cabin-attendants above the age of 55, expanding the present layoff plan to cover around 200 ground-based employees, a company-wide freeze on wage in 2010 and 2011, as well as extra savings of nearly 37 million euros yearly in overhead costs.

The airline had announced in August 2009 that it was in the red in the second quarter, having suffered a net loss of as much as 72.8 million euros ($109.2 million). In contrast, it had earned a net profit of 21.2 million euros in the same period a year before.

Iberia Airlines and British Airways had declared in July 2008 that they were planning to merge an all-share transaction, which would lead to the creation of one of the largest airlines in the world.

Meanwhile, Iberia Airlines has signed a code-share agreement with GOL Airlines, based in Sao Paulo, Brazil, aimed at gaining access to the Brazilian market.

In a press release, GOL, the second biggest carrier Brazil, said that the code-share pact will enable Iberia Airlines to enhance considerably its presence in Brazil.

At present, Iberia operates twice-daily flights between Madrid and Sao Paulo, besides one service daily between Madrid and Rio de Janeiro.

As per the code-share pact, Iberia Airlines can add its code to flights of GOL from Sao Paulo and Rio de Janeiro to 13 destinations in Brazil – Brasilia, Florianopolis, Belo Horizonte, Fortaleza, Curitiba, Goiania, Foz do Iguaçu, Natal, Manaus, Recife, Porto Alegre, Vitoria, and Salvador de Bahia.

The code-share agreement has to be approved by Brazil’s aviation authority before it is implemented.

In addition to the code-share pact, Iberia Airlines and GOL are considering linking their frequent-flyer programmes, Iberia Plus and GOL’s SMILES, respectively. If the linking takes place, Iberia Plus cardholders can add points on any GOL flight, and GOL’s SMILES cardholders will get points when they fly with Iberia.