Hi!,

According to some different spanish medias, IAG will launch long haul flights from BCN next June 17 to compete against Norwegian.

As the media says, IAG is evaluating to operate the flights with one of its own brand (BA, IB or EI) or just create a new brand.

Routes that currently evaluating are: LAX, SFO, EZE, SCL, HAV and NRT.

The company will operate in a first stage with 2 A330.

(Only in spanish)

http://www.lavanguardia.com/economia/20161222/412792292014/iag-vuelos-low-cost-el-prat-largo-recorrido.html

http://economia.elpais.com/economia/2016/12/22/actualidad/1482411442_863938.html


What do you think?

Not surprising in that it follows what BA has done at LGW to counter DY there. Ithe seems they are afraid of DY's impact on VY.

What are the chances VY would go long haul?

I am going for either a new brand or VY......

Guau! Great news for BCN. IAG wants to get back all the traffic that they lost when Iberia left BCN a years ago... All the six routes have enought traffic for two or three flights every week but Tokio is a daily route in my opinion... With this, will Norwegian do the official announcement of BCN- Buenos Aires and Santiago de Chile?

rufusmi wrote:

What are the chances VY would go long haul?

I don't think it will be operated by VY.

VY is a short-haul carrier with no long-haul experience. It was also clear from the last IAG Capital Markets Day that VY needs to focus on improving operational performance after a difficult summer before growing again.

IB seems the obvious choice.

LHRFlyer wrote:

rufusmi wrote:

What are the chances VY would go long haul?

I don't think it will be operated by VY.

VY is a short-haul carrier with no long-haul experience. It was also clear from the last IAG Capital Markets Day that VY needs to focus on improving operational performance after a difficult summer before growing again.

IB seems the obvious choice.

DY didn't have any experience when they started long-haul operations. A carrier doesn't need experience for that. If every airline needed experience to start something new we wouldn't be seeing so many different airline models in our world today.

lesfalls wrote:

LHRFlyer wrote:

rufusmi wrote:

What are the chances VY would go long haul?

I don't think it will be operated by VY.

VY is a short-haul carrier with no long-haul experience. It was also clear from the last IAG Capital Markets Day that VY needs to focus on improving operational performance after a difficult summer before growing again.

IB seems the obvious choice.

DY didn't have any experience when they started long-haul operations. A carrier doesn't need experience for that. If every airline needed experience to start something new we wouldn't be seeing so many different airline models in our world today.

True. But using an airline with existing experience and crews for A330 operations would be easier for IAG and reduce investment risk.

In the case of VY there were a lot of management changes after this year's summer and the message from IAG was clear that it will be focusing on operational performance before growth.

IB most likely. It doesn't make sense to open up a new airline when there already is one there.

this is a brilliant idea, especially given that AA serve BCN from all their east coast hubs, and I'd imagine demand to/from BCN from LAX and SFO is stronger than it is from DFW or PHX.

wenders825 wrote:

this is a brilliant idea, especially given that AA serve BCN from all their east coast hubs, and I'd imagine demand to/from BCN from LAX and SFO is stronger than it is from DFW or PHX.

I would imagine there are a few cities (apart from LAX and SFO) that lack BCN service that are larger local markets than DFW and PHX.

B752OS wrote:

wenders825 wrote:

this is a brilliant idea, especially given that AA serve BCN from all their east coast hubs, and I'd imagine demand to/from BCN from LAX and SFO is stronger than it is from DFW or PHX.

I would imagine there are a few cities (apart from LAX and SFO) that lack BCN service that are larger local markets than DFW and PHX.

true, but with AA connects those two would make sense. DFW may not be too bad, they've had MAD service for ages and surely a decent bit of that continues on to BCN.

it'll be nice to have a oneworld option on BCN-EZE (a big route) and an actual nonstop on BCN-SCL, which amazingly isn't operated by anyone! I know there's always the short hops from MAD, but the nonstop is all the more important these days..

Long overdue.

It has taken years for the super well paid IAG managers to realise that either they develop a more aggressive business plan or others (Hello, Norwegian) will eat their pie.

I don't know in which management school they learnt to focus just on the current quarter's yields and profits to keep the stockholders happy in the next meeting. As a result of this short term strategy, they have relinquished less profitable markets that have great potential but need years of investment and patience and will probably struggle a few years to break-even, as "might" be the case with Long-Haul from Barcelona (and to a lesser extent, London Gatwick). Leaving the "less profitable" routes to your competitors and focusing on your bread and butter sounds very reasonable UNTIL your competitors reach a market share as big as yours, grow strong, and them come after your bread and butter. IAG have lost years of vantage, and now that Norwegian are coming everybody has to run to try to counterattack before it's too late. IAG still have one card to play: Their "Frequent Flyer" program that allows Barcelona-based passengers to earn miles in the local queen, Vueling.

If I were IAG I would shuffle planes around to free up enough planes to develop a hub in Barcelona ASAP. Take the "creme de la creme" routes now before it's too late and Norwegian consolidate themselves.

And of course, my brand of choice would be well-known IBERIA. Any new brand would be in disadvantage with the more or less established Norwegian.

Surprising that Beijing or Shanghai are not on the list. There's a lot of opportunitistic Chinese capital being invested in Spain at the moment, as China sees value in Spain due to their recession and turning of the corner in the economy.

Costs at Iberia have been forced down, if not far enough, perhaps Iberia Express. Except VY and I2 have no ETOPS experience, so more likely IB IMHO. Also political given current Catalonian situation, ties the region more to Spain if Iberia.

Channex757 wrote:

Surprising that Beijing or Shanghai are not on the list. There's a lot of opportunitistic Chinese capital being invested in Spain at the moment, as China sees value in Spain due to their recession and turning of the corner in the economy.

I think the issue with those would be slots, considering MAD only recently got PVG service. I'm sure IAG would love to launch PEK/PVG from both MAD and BCN, but will likely take some time. China-Spain traffic is definitely high though, I've heard CX is doing well with it right now

As a Barcelona local, I'm very excited to finally see airlines betting on BCN as a long-haul hub!

With regards to the recent IAG news, we can't forget that the Spanish articles mention these will be "low-cost" long-haul routes. This could indicate that IAG will try to use Vueling/Aer Lingus/new LCC brand to operate these flights, keeping costs low to compete against Norwegian. Why would you use Iberia if you could instead use an airline (Vueling/Aer Lingus/new LCC) with lower operating costs? In my view, Iberia's brand equity is not a valid answer. It's pretty much worthless in BCN due to the fact that they never believed in flying long-haul from there - indeed, they currently only fly to MAD.

Also, I think they'll want to differentiate these new routes from BCN (LCC, with great LCC connectivity to the rest of Spain/Europe by Vueling) from the full-service ones run by Iberia from MAD.

Even though I don't particuarly like DY's means of operations, I have to give it to them: they really are making the majors step out of the box. I wonder if this is VY if they'd also try a few routes from FCO

Am I the only one who thinks this is not a good idea? During the 90's and 2000's they would have been the only game in town but now they'll have to compete with DY and all the American airlines. And IB is not particularly competitive...

This is a great initiative undertaken by IAG for IB's long term benefit in the BCN market place as the Asia bound market demand is being gobbled up by EK, TK, LH and QR primarily.

As far as demand goes, for the past 12 months it is as follows (round trip passengers):

ICN - 193,000
NRT 178,000
HKG 64,000
PEK 69,000
PVG 98,000
LAX - 106,000
SFO - 87,000
BKK - 73,000
SIN - 56,000

Some people here in BCN are afraid that IAG is copying the Norwegian long-haul routes to make them unprofitable for both and ultimately kick them out. How is an A330 going to compete with Norwegian's fuel-efficient 787?

Iberia pursued this strategy in the past to get Spanair to pull back from operating BCN-GRU..

SCQ83 wrote:

Channex757 wrote:

It seems IAG is taking a very proactive approach to fight Norwegian (LGW to OAK and FLL) in order to avoid them becoming a monster like Ryanair intra Europe..

Proactive? You mean reactive? IAG always seem to be playing catch up or "copy what everyone else is doing". Nothing market leading has come from IAG since the BA flat beds nearly 2 decades ago.

That said, good for BCN. I'm sure the locals will appreciate some direct longhual flights. No doubt EK/QR are taking a large proprotion of Asia lounge traffic.

Being a BCN local I believe there is only one brand that has local appeal: and that is VY. They are based in BCN, their main operations is BCN and unlike Iberia they don't carry the Spanish flag which is very positive in Catalonia, where every year 2 million people march for independence on the catalonian Independence Day.

VY already fly routes that are 6h long to west Africa - and soon probably JED and IKA.

And VY are running out of new cities to serve in Europe, where they are flying to every tree and thus room to grow.

So my bet is on VY.

OA940 wrote:

IB most likely. It doesn't make sense to open up a new airline when there already is one there.

Or perhaps IB Express... use the IB brand but with cheaper more efficient crews.

From a branding perspective, it should logically be operated by VY.

From an operational perspective, it should be operated by IB.

A VY branded flight operated by IB would be an interesting departure for IAG.

Note that in the articles above Willie Walsh states that Vueling won't operate these routes, as it'll remain focused on short-haul.

Do you think Air Lingus has a chance? IAG may want to position the brand as a low-cost long-haul airline, with bases outside Ireland, to compete with Norwegian.

Hearing six aircraft based in BCN and a new brand. BCN is apparently the start and additional bases are in the pipeline. Full court press against Norwegian. IAG is not messing around.

Iberia does not have much of a premium reputation anyways... launching a LCC configuration affiliated with them would not damage their brand. Vueling is a better choice because of Catalonia's regional identity, but that's not a deal breaker. After all, people in Montreal still fly Air Canada.

nascar1 wrote:

Hi!,

According to some different Spanish media, IAG will launch long haul flights from BCN next June 17 to compete against Norwegian.

As the media says, IAG is evaluating to operate the flights with one of its own brand (BA, IB or EI) or just create a new brand.

Routes that currently evaluating are: LAX, SFO, EZE, SCL, HAV and NRT.

The company will operate in a first stage with 2 A330.

If IB (?) going to use 2 A330, then probably "shorter long-haul" like JFK, MIA, HAV, SDQ, PTY and MEX could make more sense.

for asia NRT seems most logical, for the US SFO seems most logical. LAX already has MAD and that can feed for BCN

wenders825 wrote:

this is a brilliant idea, especially given that AA serve BCN from all their east coast hubs, and I'd imagine demand to/from BCN from LAX and SFO is stronger than it is from DFW or PHX.

On a point-to-point basis, probably so. But AA's hub at DFW is extremely strong and is well located for both feed and weather/operation al purposes, and would likely be successful for IB (or whatever other IAG operation) might operate there from BCN. I'm kind of surprised that DFW is not being considered, but, then, I'm surprised that EI hasn't announced anything from DUB as well

Jeff

Here's a CAPA analysis on the IAG announcement: http://centreforaviation.com/analysis/i ... and-320480

In my view, it'll either be Aer Lingus or a new LCC brand operating these routes, as VY was ruled out by WW and IB and BA operating costs are not competitive enough to challenge Norwegian. A second logical step would perhaps be to export this new LCC brand/Aer Lingus to LGW and compete with Norwegian with a similar cost burden.

anstar wrote:

OA940 wrote:

IB most likely. It doesn't make sense to open up a new airline when there already is one there.

Or perhaps IB Express... use the IB brand but with cheaper more efficient crews.

I don't know, but that's an interesting theory.

IAG have always stated that EI is their long haul value airline, so it could be operated by them and branded EI, Iberia or Vueling.

No need to duplicate resources with another AOC.

As a side note, according to media, Spanish and Chinese authorities are working to increase the number of flights between the two countries. This is due to interest from Chinese carriers to increase frequency/start new routes from BCN. BCN-PVG soon?!

SCQ83 wrote:

keitherson wrote:

Iberia does not have much of a premium reputation anyways... launching a LCC configuration affiliated with them would not damage their brand. Vueling is a better choice because of Catalonia's regional identity, but that's not a deal breaker. After all, people in Montreal still fly Air Canada.

Vueling has a terrible reputation, particularly in Barcelona where it is most flown, due to the massive delays of the very last summers.

Norwegian VS Vueling, I am sure most BCN-based customers will prefer Norwegian for long-haul.

As for Iberia, obviously being a "Spanish" airline in Catalonia would be an issue for (quite) a few people.

IMO of what it is now, Aer Lingus is the best choice. Don't forget EI already flew long-haul from Spain; MAD-IAD on behalf of United on the past.

Otherwise the best choice is probably to create a completely new brand that could be replicated in LGW eventually, or even ORY (instead of OpenSkies).

I don't feel BA need to make LGW a Low Cost/Long Haul base. The base is doing well, good yield on both Long and Short Haul. Granted they could create a better Short Haul network and improve feeding onto long haul destinations. There is definite scope for BA to expand at LGW, but turning to a Low Cost model is defiantly not a good business decision in my opinion.

SCQ83 wrote:

keitherson wrote:

Iberia does not have much of a premium reputation anyways... launching a LCC configuration affiliated with them would not damage their brand. Vueling is a better choice because of Catalonia's regional identity, but that's not a deal breaker. After all, people in Montreal still fly Air Canada.

Vueling has a terrible reputation, particularly in Barcelona where it is most flown, due to the massive delays of the very last summers.

Norwegian VS Vueling, I am sure most BCN-based customers will prefer Norwegian for long-haul.

As for Iberia, obviously being a "Spanish" airline in Catalonia would be an issue for (quite) a few people.

IMO of what it is now, Aer Lingus is the best choice. Don't forget EI already flew long-haul from Spain; MAD-IAD on behalf of United on the past.

Otherwise the best choice is probably to create a completely new brand that could be replicated in LGW eventually, or even ORY (instead of OpenSkies).

While that may be the case, Aer Lingus have a slight aircraft problem - they simply don't have enough of them, and can't seem to get new A330's onto property fast enough. Hence, new long haul routes have been started at suboptimal times of the year, awaiting deliveries from Toulouse.

I'm also sceptical that a brand so strongly identifiable with Ireland will sell very well on flights from Catalonia to Japan - though Norwegian seem to be making an unprecedented success in that regard.

Then, of course, we have the issue of traffic rights. While EI could operate to the US, would it be permitted to operate BCN-NRT or EZE? IMHO, a Spanish AOC will be required.

This is ridiculous. Aer Lingus will not operate long haul flights out of BCN. They did fly the MAD-IAD route for United in the past, but those were different circumstances. IAG will most likely do this through Iberia. Iberia has flown long haul from BCN in the past, so why shouldn't they do it again? If they want a low-cost carrier to do it, Vueling or Iberia Express would be the only candidates. Iberia Express (I2) is the better of the two because they are well-regarded throughout Spain and they don't always fly through MAD. From OVD, for example, I2 serves LHR and TFN.

Though I2 does include "Iberia" branding, it isn't as MAD-centric as Iberia so I see it as the most probable candidate to operate these proposed routes, after IB of course.

Given the connection opportunities through Vueling it makes sense to add long haul at BCN.

Any idea where the A330s are going to come from?

alexwm wrote:

Note that in the articles above Willie Walsh states that Vueling won't operate these routes, as it'll remain focused on short-haul.

Do you think Air Lingus has a chance? IAG may want to position the brand as a low-cost long-haul airline, with bases outside Ireland, to compete with Norwegian.

I wouldn't call Aer Lingus a LCC, more like a legacy carrier trying to be cheaper but they don't have the LCC feel over them like Ryanair and Norwegian do. Vueling is the only airline within the group that does have that LCC feel.

It's true they said before that Vueling wouldn't operate long haul, but I wouldn't put my money on those words. They can change every day. I think Vueling is the right airline to compete against Norwegian, the rest (British Airways, Iberia and Aer Lingus) all got the feeling of being too expensive. If they pick Iberia for example, I bet Norwegian is going to blow them out of the market.

hispanola wrote:

This is ridiculous. Aer Lingus will not operate long haul flights out of BCN. They did fly the MAD-IAD route for United in the past, but those were different circumstances. IAG will most likely do this through Iberia. Iberia has flown long haul from BCN in the past, so why shouldn't they do it again? If they want a low-cost carrier to do it, Vueling or Iberia Express would be the only candidates. Iberia Express (I2) is the better of the two because they are well-regarded throughout Spain and they don't always fly through MAD. From OVD, for example, I2 serves LHR and TFN.

Though I2 does include "Iberia" branding, it isn't as MAD-centric as Iberia so I see it as the most probable candidate to operate these proposed routes, after IB of course.

I don't think Iberia Express will operate these routes out of BCN. When IB reached an agreement with unions to launch I2, they restricted the latter's fleet size to 25 narrow-body planes. IAG would face massive opposition from unions if they started transatlantic flights from BCN with I2.

By the way, the Times confirmed today the recent news (http://www.thetimes.co.uk/edition/busin ... -v23kpt99v). According to this, IAG will likely launch a new brand to operate these routes. Los Angeles, San Francisco, Buenos Aires, Santiago in Chile and Havana services will all start in June, while the timeline for Tokyo is TBD.

alexwm wrote:

By the way, the Times confirmed today the recent news (http://www.thetimes.co.uk/edition/busin ... -v23kpt99v). According to this, IAG will likely launch a new brand to operate these routes. Los Angeles, San Francisco, Buenos Aires, Santiago in Chile and Havana services will all start in June, while the timeline for Tokyo is TBD.

That said enough, they won't make it. That new brand will go as fast as it comes and Norwegian is in Barcelona to stay. After all, Norwegian also has the fair amount of short haul feeder flights from Barcelona and they can team up with Ryanair just like they do at Gatwick. IAG can't compete against that.

I don't see the Aer Lingus brand ever venturing out of Ireland and opening bases in Europe ever again, it has always failed miserably for them in the past. The Gatwick base in 2009 was promising, they went after popular sun routes and a selection of unserved city destinations, fares were dirt cheap and costs were low but the brand is simply "too Irish" to get people to consider them for London-Europe flights. Aer Lingus were slightly ahead of their time at LGW, routes like VNO, WAW and OTP were all unserved at the time but are now served by the likes of Ryanair, Norwegian, Wizz and easyJet so while the market is there, the Aer Lingus brand isn't up to capturing it.

In recent years Aer Lingus has finally discovered what it's best at and will stick to that for the foreseeable future.

What IAG is probably doing, is looking at how Aer Lingus works across the Atlantic and how aspects of their business model can be used for new ventures. Aer Lingus has probably got some of the lowest costs of any transatlantic airline and years of experience operating as a low fares carrier so at the very least it could be used as inspiration for a new long haul LCC and at the most it could actually operate the flights either under a new brand or as Vueling.

Iberia Express also has potential but Vueling is more likely to be a success if IAG has ambitions for a pan-European long haul LCC.

Devil's Advocate - why not shift two A330s to the Meridiana brand (under QR supervision), and expand Merdiana from both Barcelona and Italy? IAG and QR will benefit, and perhaps this will spell where Merdiana needs to actually be - on key 'long'/medium-haul routes, surrendering most/all domestic/regional routes to VY. It's odd to assume that they would (despite it being likely) overlook a brand that is already there, and could be expanded upon/updated with very little cost, and so much symmetry - in the face of increased competition, and considering what is going on in other parts of Europe, and in Italy especially (AB's demise, LH's rise - and the turn to AZ, and EY's needs there).

[quote="shamrock604"]

"While that may be the case, Aer Lingus have a slight aircraft problem - they simply don't have enough of them, and can't seem to get new A330's onto property fast enough. Hence, new long haul routes have been started at suboptimal times of the year, awaiting deliveries from Toulouse."

Did not realise there was a shortage, what is the wait time like?
Are stored 2nd hand not available or desired?

Do IAG still have access to Go livery and brand? I k now it was sold off.

Maybe they will take over ORD for S18 and add DFW!

Lofty wrote:

Do IAG still have access to Go livery and brand? I k now it was sold off.

I don't think so, it was sold to the management team, then sold to U2 as a major part of their expansion, so they would have to buy it back to use it.

http://en.wikipedia.org/wiki/Go_(airline)