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IAG 'evaluating' low-cost long-haul model: Iberia chief

IAG is scrutinising low-cost long-haul business models to assess their viability or otherwise.

"We will see if it's going to work or not," Luis Gallego, chief executive of IAG-owned Iberia, tells Flightglobal. "For sure, at a group level we are evaluating different alternatives, in case we consider in the future [if we] can go in that way."

But he adds: "What we [in Iberia] think is that with the cost structure we have right now, we can compete with everybody even in this new model of long-haul low-cost, and that is what we are doing."

Gallego stresses the differences between the business model for low-cost long-haul operations and that governing short-haul budget flying. "It is not the same model," he asserts. "You need a lot of point-to-point operation you don't have the big advantage that you have in the short- and medium-haul, of the utilisation of the aircraft."

He says there are no current plans to turn his airline's budget subsidiary into a long-haul operator, noting that the "objective of Iberia Express is short- and medium-haul, and to help Iberia and the profitability of the group".

Iberia, he adds, is able to compete more effectively because crew are now joining the airline "with conditions similar to the conditions you can have in a low-cost carrier".

In regards to an ongoing study of a potential premium-economy offering on long-haul routes, Gallego notes: "What we are evaluating is if the premium economy makes sense… but we are analysing in which fleet, because maybe it's not good for all of them." He adds: "Maybe we will need more densified aircraft to compete."

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