International Airlines Group (IAG) is making important management changes at three of its Spanish airlines as the group continued its fast recovery of profits, which exceeded pre-pandemic levels in 2023.
IAG named Marco Sansavini, currently CEO of its Barcelona-based low-cost unit Vueling, as the new CEO of Iberia. Fernando Candela, who has led Iberia on an interim basis since May 2023, is moving on to run Level, the long-haul low-cost unit that is in the process of obtaining its own air operator certificate (AOC). Vueling will in the future be led by Carolina Martinoli, currently Director of People, Corporate Affairs, and Sustainability at IAG.
Sansavini has been running Vueling since 2020. He spent a large part of his career at Air France-KLM before moving over to IAG. Martinoli was part of the management team of former Iberia CEO Luis Gallego, who orchestrated the financial turn-around of the once struggling airline. She moved on to sister company British Airways (BA) in 2017 and then into the group role in 2021.
IAG’s Spanish airlines are currently driving group performance. Iberia reached a 13.5% operating margin in 2023, followed by Vueling with 12.4%. Aer Lingus and British Airways, the two other major airlines in the group, came in at 10%. Also, IAG has managed to become less dependent on British Airways results. In 2019, the group posted a €3.2 billion ($3.5 billion) operating profit, €2.1 billion of which came from BA. Four years later, IAG exceeded that level and posted a €3.5 billion profit, but BA only contributed €1.6 billion to it, less than half of the total.
The airline nonetheless remained by far the largest profit contributor ahead of Iberia (€940 million) and Vueling (€346 million).
Iberia will focus its 2024 network expansion on increasing depth in core markets. The airline will offer Bogota, Mexico City, and Buenos Aires three times daily from its Madrid hub. The carrier is also looking to deploy the Airbus A321XLR across the Atlantic but has not yet revealed destinations for the type. IAG expects to receive the first three XLRs before the end of 2024.
Level, currently operating to Miami, Boston, and Los Angeles from Barcelona, is taking one more used A330 to expand further. The airline is also in the process of setting up its own AOC and IAG is looking at using the carrier also for short-haul flying in Europe in the future.
IAG overall grew capacity by almost 23% in 2023 and expects capacity to increase by 7% in 2024, moderating to 4-5% over the three years until 2026. Capital expenditure will total €3.7 billion this year, but average €4.5 billion annually in the next three years.
In 2024, the carrier will take delivery of 21 aircraft, including A350-900/1000s, A321neos, A321XLRs, A320neos, and Boeing 787-10s. Of these, 14 will be flown by British Airways; Iberia and Aer Lingus will get two aircraft. Iberia will take one A350-900 and one A321XLR. The two remaining XLRs expected for this year have not yet been allocated. IAG CEO Luis Gallego said “sustainable pilot agreements” are needed at Aer Lingus and Vueling to make further investments. Vueling is not receiving new aircraft in 2024.
Gallego also expects to be able to complete the takeover of Air Europa, another Spanish airline, by the end of the year. The acquisition has been delayed by the in-depth European Commission investigation into its impact on airline competition.
IAG reached €29.4 billion in 2023 annual revenues, up from €23 billion in 2022. Its net profit surged from €431 million in 2022 to €2.6 billion in 2023.
