International Airline Group’s (IAG) of will strengthen Iberia’s position in Latin America. It allows the Spanish airline more access in the Americas, as Air Europa currently operates to 14 Latin American countries. 

Photo: Iberia

Enhancing connectivity

The presence of Spanish airlines in Latin America is well documented. Both Iberia and have forged their presence in Latin American markets. Before the COVID-19 pandemic, Air Europa flew to 22 cities in 14 Latin American countries. Iberia flew to 16 countries (20 cities).

The new deal, set to be complete in the second half of 2021 (although IAG won’t pay the €500m until 2026), will help IAG’s ambitions in Latin America, especially since it lost the chance to forge a joint venture with American Airlines and LATAM in May 2019. In October, Willie Walsh admitted that Latin America is an essential segment for the company. He said, “We have a lot of direct services, and that’s one of the strengths of IAG, and particularly the Iberia network, with the direct distribution that we have into Latin America. And it remains an important focus market for us.” 

Before the pandemic, European carriers accounted for 75.5% of the capacity to the Latin American market, according to OAG. Only a few Latin American airlines operated transcontinental flights to Europe, like Aeromexico, LATAM, Avianca, Aerolíneas Argentinas, and Azul. 

Iberia's markets

Photo: Iberia

Iberia’s powerhouse presence in Latin America

Iberia operated up to 300 weekly flights to Latin America before the COVID-19 pandemic and expects to return to these levels in the future. In 2021, Iberia celebrates 75 years of history connecting Latin America and Europe. The airline operated its first flight between Madrid and Buenos Aires on September 22, 1946, and hasn’t looked back since. Iberia is the airline specialist in Latin American for European routes

IAG expects to forge a continental hub in Madrid-Barajas International Airport, competing directly with other European airports. The of Air Europa “will be an unprecedented push to the connectivity of our country through Madrid’s hub.” 

If we consider the pre-pandemic seat capacities, once ’s is complete, Iberia should have at least 25% of the market share, putting it ahead of Air France-KLM, which had the largest combined capacity share before COVID. 

Photo:

Final analysis

IAG suffered a big blow when the Chilean Government blocked the joint venture with American and LATAM. It was aggravated even more when Delta bought a stake in LATAM’s earlier last year. 

’s will certainly push Iberia, and IAG, as the leading operator between Europe and Latin America. Moreover, the current Chapter 11 bankruptcies of three Latin American airlines, plus the uncertainty in Air France-KLM, can only benefit Iberia’s strength in this market. 

Iberia will benefit from the geographical advantage of Madrid’s hub and the linguistic barrier faced by other competitors. Additionally, Air Europa’s will enhance Iberia’s route map in Europe, a big plus for Latin American travelers. Although, it remains to be seen whether other airlines, like Ryanair, don’t start legal actions against the buyout. 

Iberia Air Europa
Argentina:

  1. Buenos Aires
Argentina:

  1. Buenos Aires
Brazil:

  1. Rio de Janeiro
  2. Sao Paulo
Bolivia:

  1. Santa Cruz de la Sierra
Chile:

  1. Santiago de Chile
Brazil:

  1. Fortaleza
  2. Recife
  3. Salvador da Bahia
  4. Sao Paulo
Colombia:

  1. Bogotá
  2. Cali
  3. Medellín
Colombia:

  1. Bogotá
  2. Medellín
Costa Rica:

  1. San José
Cuba:

  1. Havana
Cuba:

  1. Havana
Dominican Republic:

  1. Punta Cana
  2. Santo Domingo
Dominican Republic:

  1. Santo Domingo
Ecuador:

  1. Guayaquil
  2. Quito
Ecuador:

  1. Guayaquil
  2. Quito
Honduras:

  1. La Ceiba
  2. San Pedro Sula
El Salvador:

  1. San Salvador
Mexico:

  1. Cancun
Guatemala:

  1. Guatemala City
Panama:

  1.  Panama City
Mexico:

  1. Mexico City
Paraguay:

  1. Asunción
Panama:

  1. Panama City
Peru:

  1. Lima
Peru:

  1. Lima
Uruguay:

  1. Montevideo
Puerto Rico:

  1. San Juan
Venezuela:

  1. Caracas
Uruguay:

  1. Montevideo
Venezuela:

  1. Caracas

 

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