Spanish carrier Air Europa is in expansive mood as it prepares to launch long-haul services to China and add extra aircraft to its fleet, including Airbus A350. The carrier's parent, Spanish leisure group Grupo Globalia, is in talks with  two banking groups to sell up to 20% of the business to help fund expansion. Globalia founding president Juan Jose Hidalgo refuses to be drawn on the detail, but says the group intends to re-invest the proceeds of any sale back into the integrated travel empire.

For the fast-maturing Air Europa, the additional investment will help fund the recent expansion of scheduled services to eastern Europe and China and the additional aircraft requirements that this entails.

Air Europa chief executive Maria Jose Hidalgo says the carrier plans to add five new aircraft this year to its 27 Boeing 737s and five Boeing 767s. This will include four 737-800s, in addition to an Airbus A340-200, which will be used to launch Air Europa's new China services to Beijing and Shanghai in late May.

Hildago says this will provide Air Europa – which hopes to incorporate 10 Airbus A350s in 2010 – with a modern fleet, with an average age of three years.

Air Europa enetered the SkyTeam alliance in February as a regional associate, having codeshares already in place with most of the alliance's members.

Hidalgo's focus is to work out how Air Europa can best leverage the benefits of the vertically integrated travel empire over which Grupo Globalia presides. The group's €571 million ($740 million) tour operator business saw 2004 sales increase 36%, selling 1.3 million holidays. With Air Europa anchored at the centre of Globalia's growth strategy, the airline will play a key role in the development of its charter services with the aim of reaching €700 million in turnover selling more than 1.5 million holidays.

Air Europa saw a 13.7% increase in 2004 revenue to €800 million thanks largely to increased load factors and more efficient operations. Passenger numbers rose 15% to 7.6 million last year. Growth is expected at a similar rate in 2005.

Source: Airline Business