Iberia Express: British Airways and Iberia’s new budget airline

Parent group, International Consolidated Airlines Group approved the new airline in a bid to help stem Iberia's losses on routes between Spain and Europe.

Iberia Express: British Airways and Iberia's new budget airline

Spanish airline Iberia announced plans on Thursday to create a budget airline called Iberia Express, as part of a restructuring to reduce its costs and return to profit.

Iberia Express will begin flights by summer 2012 from Madrid Barajas airport and will handle some of Iberia’s loss-making short and medium-haul routes.

The new airline will compete directly with easyJet and Ryanair – which have overtaken Iberia to become the biggest airline operators on routes between Europe and Spain.

However, Sepla, the Spanish pilots’ union said the plans for a new airline broke agreements signed with Iberia during its merger with British Airways last year to form International Consolidated Airlines Group.

It raises the possibility of a strike by Iberia’s pilots and cabin crew. In a statement, Sepla said: “Following this decision, the pilots will take appropriate legal actions, together with other [worker] groups affected by the creation of a new company,” Sepla said.

IAG’s Iberia hopes the new airline will help to stem its losses.

The carrier reported a €78m ($105m) operating loss for the six months to June 30, while BA reported a €210m operating profit in the first half of 2011.

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