Iberia heads to Asia with Shanghai and Tokyo links

The oneworld alliance member will introduce a three times weekly service between Madrid and Tokyo from October 18, 2016. The Madrid – Shanghai route, also expected to be flown three times weekly, will commence from a similar time, but Iberia is still awaiting final approval from Chinese authorities and slots at Pudong International Airport before opening reservations.

Spanish national carrier, Iberia is to introduce flights next winter from Madrid to the Asian cities of Shanghai and Tokyo, its only services to the region. This is a significant announcement from the carrier, part of the International Airlines Group (IAG), which currently has a long-haul focus on the Americas region and in particular Latin America.

The oneworld alliance member will introduce a three times weekly service between Madrid and Tokyo from October 18, 2016. The Madrid – Shanghai route, also expected to be flown three times weekly, will commence from a similar time, but Iberia is still awaiting final approval from Chinese authorities and slots at Pudong International Airport before opening reservations.

The two new routes will be Iberia’s first foothold in the Asian travel market. Its network of 26 long-haul destinations is dominated by the Americas region with a twice weekly flight to Luanda, Angola currently the only route outside of this region, according to schedules from data provider, OAG.

“We have always wanted to be a global airline. With these routes to Tokyo and Shanghai, we take a step in that direction, while we bring closer our country to two economical and touristic powers such as Japan and China”

Luis Gallego
Chairman and CEO, Iberia

The remaining 25 long-haul routes comprise 12 in South America (Bogota, Buenos Aires, Cali, Caracas, Guayaquil, Lima, Medellin, Montevideo, Quito, Rio de Janeiro, Santiago de Chile and São Paulo), five in Central America (Guatemala City, Mexico City, Panama City, San Jose, San Salvador), five in the United States (Boston, Chicago, Los Angeles, Miami and New York) and three in the Caribbean (Havana, San Juan, Santo Domingo).

This growth will bring a little geographical balance to the Iberia network. The airline is undergoing a transformation to reduce costs, improve productivity and efficiency, while simultaneously expanding its revenue base and changing its company culture. Iberia says that together these measures will allow it to start the routes to Asia in a profitable and sustainable way.

The selection of the Japanese capital as its first Asian route follows a 27 per cent rise in the number of Japanese tourists visiting Spain between January to September 2015, versus the same period the previous year. This will be the only non-stop link between the countries and alongside supporting local traffic will offer connection options for incoming passengers from Asia to 29 additional Spanish destinations and 59 other European cities, as well as numerous destinations in Africa and the Americas.

Iberia confirms that it has “started negotiations” with Chinese authorities to operate the route to the global financial centre of Shanghai. It says the launch date will be announced once negotiations “have been finalised” and permits, as well as slots, “have been granted”. The number of Chinese citizens visiting Spain is growing continuously and Iberia hopes to stimulate further growth in one of the world’s most lucrative outbound market. Over the first nine month of 2015 Chinese visitor arrival into Spain were up 66 per cent versus the previous year, according to tourism data.

“We have always wanted to be a global airline. With these routes to Tokyo and Shanghai, we take a step in that direction, while we bring closer our country to two economical and touristic powers such as Japan and China,” said Luis Gallego, Chairman and CEO, Iberia.

The Spanish carrier will deploy its new Airbus A330-200s on these two routes, a type that made its debut in the Iberia system earlier this month. Its first of 13 examples it has on order was delivered on December 29, 2015 and entered operation on long-haul routes into the Americas at the start of this year. They are configured in a 288-seat, two-class arrangement with 19 Business and 269 Economy seats.

The new aircraft will directly replace the carrier’s older four-engined A340-300s, providing economic, environmental and service delivery benefits to the company. The more efficient two-engined aircraft have a much greater fuel economy than the A340-300s they will replace, a range of up to 13,400km as well as enhanced comfort and services for passengers.

According to MIDT data for the first half of 2015, an estimated 7,200 two-way passengers a day were flying between Spain and destinations across the Asia-Pacific region, despite the lack of non-stop flight options. The Gulf carriers dominate this market with Emirates Airline (18.0 per cent share) and Qatar Airways (14.2 per cent share) leading the way, via Dubai International Airport and Hamad International Airport, respectively. Air France is largest European carrier (6.7 per cent), while Iberia’s IAG-owned sister airline, British Airways had just a 3.5 per cent share with an estimated 45,000 passengers during the first six months of 2015.

Iberia’s two new Asian routes are among the top three markets in the region based on O&D demand, although it is Seoul, South Korea that leads the way, due in part to the existing flights of Korean Air between Madrid and Incheon. Other significant markets with strong passenger flows but no current non-stop flights include Bangkok, Delhi, Osaka, Manila and Mumbai. Other options for future Iberia growth in the region also include Beijing and Hong Kong, which are linked to Madrid by Air China and Cathay Pacific, respectively; and Singapore, which is linked to Barcelona by Singapore Airlines.