"Iberia to request subsidies for airport use"

Saturday, November 13, 2004

Iberia to request subsidies for airport use
Spain - Expansion


In Spain, the managing director of national airline Iberia, Angel Mullor,
has said that his airline may follow in the footsteps of smaller budget
carriers such as Ryanair and Easyjet and seek subsidies for using smaller
regional airports, in order to compete with these airlines. Just last month,
Iberia condemned the awarding of these subsidies by regional governments;
now, it plans to ask for the same treatment. Mr Mullor has also pointed to
another area where budget airlines had a significant advantage: labour
costs. According to the Iberia managing director, these airlines had wage
costs 40 per cent lower than Iberia's.

In recent years, Iberia has taken a number of steps to compete with these
airlines, including cutting commissions paid to travel agents from 15 per
cent in 1996 to the current 2 per cent and a rationalisation of Iberia's
fleet and in-flight services.


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