Growth by competitors at Madrid 'unprofitable': IAG chief

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IAG chief Willie Walsh has questioned the logic of rivals adding capacity at Madrid in the wake of cutbacks by Iberia.

"Some of our competitors have put in capacity, taking advantage – well, what they think is an advantage – of the withdrawal of services that Iberia has done," said Walsh during a results briefing on 28 February. "We believe, particularly in the long-haul arena in Madrid, that is unprofitable growth by our competitors, and it will be unprofitable in the future, because we will have a lower cost base than our competitors at Madrid."

Walsh describes Iberia's scaling back at the Spanish capital as "a tactical retreat to allow us to restructure", and adds: "If and when we believe that we can add capacity in a profitable way, that is something that we’ll look at in the future."

British Airways, a sister airline to Iberia within IAG, is meanwhile "strengthening" IAG's position at "the premium international airport", London Heathrow, says Walsh.

Iberia reduced passenger capacity 14% last year, and its traffic fell 16.5%, for which IAG cites "weak demand in the Madrid market, competition and pricing policies aimed at yield improvements".

BA added 2% to available seat-kilometres. The UK carrier's traffic was up 3.9%.