Hats off to IAG as Iberia returns to profit – and why you may be flying it more often

A self-congratulatory page has appeared on the Iberia website celebrating the return to profit of the airline.  For once, I don’t blame them for running it.  (Click ‘Idioma’ on the top line if it comes up in Spanish.)

Some people hold the view that the acquisition of Iberia by British Airways in 2009 (although it took until 2011 for the deal to complete) was primarily an attempt by BA to get its hands on Iberia’s €1bn cash pile at a time when BA was not in the best of health.

Handing over 45% of the combined IAG to Iberia’s shareholders in return for a loss-making airline with, literally, a litany of ‘Spanish practices’ seemed – and still seems – generous to put it mildly.

Iberia A330 350

Let’s give IAG some credit.  Iberia has gone from losing €1m per day to being profitable.

Routes which were ditched as unprofitable have been reintroduced – I wrote about the new Cuba and Colombia services on Sunday.

Iberia’s new business class seat, which I flew in 2013, is fully flat and available on almost all the fleet

16 new long-haul aircraft – 8 x A330’s and 8 x A350’s – were ordered last year for delivery through to 2020

In June, August and October last year, Iberia was the most punctual airline in the world according to FlightStats with 91% of aircraft departing on time.  This is despite the massive job cuts that IAG managed to negotiate with the unions and which formed the basis of the turnaround.

They even have a modern logo at long last!

Iberia still has some way to go, of course.  In the first nine months of 2014, budget sister airline Vueling was almost as profitable – €140m vs €162m – despite being smaller, and British Airways made €607m.  You can see why, even now, giving Iberia 45% of the merged business was over the top.

New Iberia routes to Manchester and Edinburgh will be launched this year.  With Iberia redemptions now SUBSTANTIALLY better value than BA redemptions under the new Avios structure, we may all find ourselves spending more time in Madrid.

PS.  I had an email last night announcing an Avios sale on some new Iberia routes.  More on this tomorrow.

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Comments

  1. If only their customer service were better I might well use them more. I’ve been chasing 3000 Avios owed me for car hire since October and they either do not reply to me or say they will look into it then never get back to me!

    I dread to think what they would be like if they lost my luggage on a flight!

    • DontLikeFruit says:

      Snap! I’m missing 3000 Avios from a Hertz rental last year. Have exhausted conventional attempts to resolve this – time for social media shaming!

      • I had exactly the same problem last year (should have been triple IB Avios for a 3 day rental but was only credited with the base amount). I would suggest contacting Hertz rather than Iberia – I did and they resolved it for me!

        • I tried that first. They said nothing to do with them and I had to contact Iberia. Pretty much given up now.

          • Peter

            Here’s what I did. I submitted a missing points request via Hertz – as expected I got an automated email back saying that I had been credited the (Avios) as per the Rental Ref No.

            I then checked my rental docket and sure enough, there was a PC (Promotional Code) entitling me to triple IB Avios on the booking. I then got back in touch with a person (@ Hertz) by email and they agreed with me and said it would be credited within 4-6 weeks and sure enough, it was.

          • Thank you for that. I’ll give it a go.

  2. They seem to have taken it down now – I get a 404 error.

  3. I also get a 404. Looking ahead it should be more profitable for airlines all over with lower oil prices. Airlines in the US are setting themselves up for a bumper year. Should probably buy some shares!

  4. Rob I love this category of articles where you provide analysis of the market and a slightly sideways look at the news.

    Jeremy

  5. I agree on the poor customer service. I finally got my Avios in January 2015 for a car rental in July 2014. My advice is persevere with them. Some emails went unanswered, but it paid off for me in the end. Problem is I can’t check I got the right number of Avios as they have dropped Hertz, and the rates are no longer on the website. It has made me wary of applying for their other deals like ‘The Economist’ one, if I ended up with a magazine subscription I didn’t especially want but no Avios.