DALLAS – Following the success of low-cost giants easyJet (U2) and Ryanair (FR) in the early 2000s, legacy airlines that had previously dismissed these upstarts were now forced to recognise these new companies as a threat to their business.
Spain had been one particular market that U2 and FR had targeted intensely, leading the Spanish flag carrier Iberia (IB) to see its market share decrease, particularly in the northeast Catalonian region of the country. This had been worsened by the arrival of Barcelona (BCN) based Vueling (VY) in 2004.
Several Airbus A320s were transferred over from parent Iberia. Photo: Delatorre, CC BY-SA 3.0, via Wikimedia Commons.
Iberia needed to react, so ‘Catair’ was born, a joint venture between IB, Iberostar, Cobra, Nefinsa (parent of Air Nostrum) and Quercus Equity, with each party owning 20% of the start-up. Iberia would be tasked with the day-to-day running of the new carrier with an initial capital of €120m (US$129m).
The ‘Catair’ name, chosen to represent the airline’s ‘CATalonian’ Barcelona base, was dropped in favour of Clickair (XG). Management said this represented the concept that more low-cost airlines sold tickets via the Internet.
Speaking of the growing threat of low-cost carriers (LCC) at the time, a spokesperson for Iberia’s said, “We were losing ground in Barcelona so quickly…it is better for us if the low-fare passengers are taken over by Clickair and not Vueling or Ryanair.”
Alex Cruz was appointed as the airline’s new CEO in September 2006 as the airline was awarded its Air Operators Certificate (AOC). Cruz set about developing Clickair to operate a ‘third-generation low-cost carrier model.’ This would see the airline offer low-fare and no-frills for its budget passengers while allowing customers to choose frills such as frequent flier miles and meals. Iberia flight codes were placed on XG flights, and the Spanish flag carrier even withdrew…