Airlines in Spain face stiff competition from high-speed train

28 May, 2008: Airlines in Spain complain that their domestic routes are facing growing pressure from the expansion of the country’s high-speed railway network.

The Spanish government claims that the country’s high-speed railway network will be the world’s most extensive one by 2010, according to media reports.

Spain opened its first high-speed rail connection, connecting Madrid, capital of Spain, and the south-western city of Seville, in April 1992.

Renfe, the state-owned railway operator, had opened a bullet train service between Madrid and Malaga, on the Mediterranean coast, in December 2007 and between Madrid and Barcelona, Spain’s second-largest city, two months later.

The Spanish government is planning to build 10,000 kilometres (6,200 miles) of high-speed railway track by 2020 – this means that 90% of Spain’s population will live less than 50 kilometres from a bullet-train station.

In April 2008, Iberia Airlines, the Spanish flag carrier, had alleged that the opening of the new rail links to Barcelona and Malaga was responsible for a drop of 0.5 percentage point in its domestic load factor in the first quarter of 2008.

This decline was despite Iberia Airlines reducing capacity on its flights within Spain by 13% during the first three months of 2008.

Iberia Airlines, the largest airline of Spain, is based in Madrid and operates an extensive international network of services. It is the market leader regarding flights between Europe and Latin America.

According to media reports, Fernando Conte, chairman of Iberia Airlines, has described the competition posed by bullet trains as “tremendous,” adding that the carrier “will push ahead with plans to reduce its capacity on domestic flights by 15% during the rest of 2008.”

The strategy of Iberia Airlines, according to analysts, is to reduce gradually its domestic flights, where it also faces stiff competition from low-cost airlines, and increase its long-haul flights, especially to Latin America.

The carrier also plans to reduce capacity on its flights between Madrid and Barcelona – one of the busiest air routes in the world – by about 20% by using planes with smaller capacity but maintaining the number of daily flights on the route.

Carriers other than Iberia Airlines are also struggling to compete with the high-speed trains, reports say.

Spanair, the second-biggest airline in Spain, is struggling to make ends meet. (Spanair, based in Palma de Mallorca, Spain, is a subsidiary of Scandinavian Airlines Systems. It offers a scheduled passenger network within Spain and Europe, with an extension to West Africa.)

Vueling Airlines, a loss-making, low-fare airline based in Barcelona, Spain, has reduced the number of its flights between Madrid and Malaga and has cancelled its summer connection between the two cities. (Vueling flies to destinations in Europe and the western Mediterranean).

The high-speed AVE trains, which are fitted with video and music players and chairs that can swivel in the direction of travel, can cover the 660-kilometre journey between Madrid and Barcelona in about two and a half hours.

According to a survey, passengers find that the bullet trains are more roomier and comfortable than planes, have faster check-in times and have the advantage of arriving and departing from downtown centres.

Business travellers prefer bullet trains to aircraft because of the availability of mobile services and electrical outlets in the bullet train’s seats that allow them to work as they travel.

A recent study conducted by Vigo University, located in the city of Vigo, Galacia, Spain, concluded that “airlines would find it difficult to compete with trains for journeys that could be covered in up to 3 hours. Beyond that time, the plane continues to be the preferred option.”