Iberia launches impressive 2030 Flight Plan with new lounges, routes and aircraft

Iberia, the Spanish sister airline to British Airways, has been IAG’s big success story of the past decade.

Whilst International Airlines Group was officially formed as a merger of equals between BA and Iberia, the latter was always the poorer sister. British Airways drove the bulk of the group’s profits with vastly superior operating margins.

In 2013, Luis Gallego (now group CEO) was made CEO of Iberia and a turnaround plan was put into action targetting both on-time performance and profitability.

In just seven years, from 2012 to 2019, operating margin had grown from -7.3% to 8.8% and operating income transformed from a €351m loss to €497m profit.

Iberia’s success continued after covid. Whilst 2020 and 2021 were rough years for everyone, Iberia recovered faster than its peers. In the past few years passenger numbers have jumped (beating pre-covid records) whilst operating margins have climbed into the low teens, rivalling BA’s.

On-time performance has been exceptional with Iberia recording figures between 85% and 90% – BA languishes in the low 60s and 70s. It is one of the most impressive turnarounds in modern aviation.

Having recovered its passenger numbers, boosted profitability to record levels and become the most punctual airline in Europe, the airline is now turning its eye towards the future.

Last week, it published its 2030 Flight Plan “to continue developing our full potential”. It outlined how it will invest €6 billion over the next five years whilst maintaining operating margins of 13.5% – 15%.

That’s great if you’re an IAG shareholder (and I am, having bought in during the lows of covid.) But what’s more interesting is how it is investing in its customer experience with new aircraft, new lounges, cabin refurbishments and more. Here is what Iberia has planned.

Growing the long haul fleet to 70 aircraft

IAG has long wanted to turn Madrid into a European hub to rival Heathrow, Amsterdam, Paris and others. It was one of the reasons IAG wanted to buy Air Europa. At the time, IAG said that acquiring Air Europa, complete with its long haul fleet of 29 aircraft, would give Madrid a similar long haul capacity to KLM in Amsterdam.

Ultimately, IAG’s takeover plans got scrapped in the face of competition concerns. Instead, Iberia now plans to achieve the same result by growing its long haul fleet organically with a target of 70 aircraft, up from the 45 it currently has. The additional 25 aircraft is almost exactly the same size as Air Europa’s long haul fleet.

The only catch is that this planned growth is dependent on Iberia maintaining its target margins of 13.5% – 15%.

It has already agreed to order six more A350-900s from Airbus. IAG has 21 A330-900neos on order of which some will almost certainly go to the airline. Iberia also continues to take delivery of single aisle A321XLRs which are configured as long haul aircraft.

Six new transatlantic routes

Iberia will need places to fly all those aircraft and it has already set its eyes on six new long haul routes.

Previously announced are new routes to Orlando in Florida and Fortaleza and Recife in Brazil. These are to be joined by flights to Toronto, Philadelphia and Monterrey.

A cabin refurbishment program

The airline has said it will “achieve 100% renovation of our long-haul cabins” as well as refit the single aisle fleet with extra large overhead bins. (Don’t ask why BA refuses to refit its short haul fleet with the new larger bins, unlike most other European carriers ….)

Iberia introduced next generation long haul business suites on its A350 deliveries last year (you can read my Iberia A350 business class review here) and I expect we will see those installed across the existing A350 and A330 fleet for 100% commonality.

A new premium lounge in Madrid

Also teased was a brand new Premium lounge at Iberia’s home in Madrid Terminal 4. At the moment Iberia operates just two lounges at the airport – the Velazquez non-Schengen lounge (reviewed here) as well as the smaller Dali Schengen lounge.

It’s not clear where the lounge will be located, or whether it will cater for Schengen or non-Schengen passengers. I suspect the latter, given the airline’s long haul growth plans.

It could be a oneworld Emerald lounge for top-tier status members, which would sit above the existing lounge and offer a brand new and luxurious Iberia experience.

All in all, the next five years are looking very positive for the airline.

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