Iberia to Abandon Routes to Budget Carriers

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Iberia to abandon routes to budget carriers

MADRID, Dec 5 (Reuters) - Spanish airline Iberia plans to cut routes that do not pass through Madrid because of competition from low-cost carriers, Chief Executive Angel Mullor was quoted as saying on Monday.

Iberia has faced stiff competition from low-cost airlines such as EasyJet and Ryanair , which fly to several cities all over Spain.

Mullor said in an interview with internal magazine Iberiavion that certain routes stopped producing positive results a couple of years ago because of competition from budget airlines.

"All these point-to-point routes, which do not pass through Madrid, are routes we will have to start abandoning," he said. "These will be routes which only low-cost companies are going to be able to operate."

"They have already thrown us out of six routes from Barcelona, and now in serious danger are our routes, for example, from Galicia to England where EasyJet or Ryanair have started, and we can't compete with them," he added.

Mullor said Iberia would keep offering flights between second city Barcelona and Madrid but when asked if the domestic market would disappear, he said: "To a great extent, yes."

Mullor said the firm had no concrete plans for its own low-cost airline.

Iberia presented its 2006 to 2008 strategic plan earlier this year, which has prompted a strike threat from pilots' union SEPLA with its attempt to cut more than 2,000 jobs.

Shares in Iberia, which is also battling with high oil prices, have fallen 14 percent this year, compared with an 18 percent rise on the DJ Stoxx European travel and leisure index <.SXTP>.