International Airlines Group to launch new low cost long-haul airline “Level”


After months of speculation, International Airlines Group (“IAG”) which is the parent company of Aer Lingus, British Airways, Iberia and Vueling, has today confirmed is to launch a new low cost long-haul airline.

The airline is called “Level”.  This is the first new airline launched by IAG in its six year history.

The airline will initially be based in Barcelona.  It will launch on 1 June 2017 and its inaugural route will be Barcelona – Los Angeles which operate twice weekly.

Routes from Barcelona to Oakland California (three times weekly) will follow on 2 June 2017.  Barcelona – Punta Cana (twice weeky) on 10 June 2017.  Barcelona – Buenos Aires on 17 June 2017 (three times weekly).

The airline will intially operate with two brand new Airbus A330-200 aircraft with 239 seats in economy in a 2-4-2 configuration and 21 seats across three rows in premium economy in a 2-3-2 configuration.

In economy a seat pitch of 30″ will be offered with a 9″ personal entertainment screen.  Checked baggage, extra leg room seats and hot meals can be purchased in advance.  Food and drink, duty free goods, in flight comfort amenities such as blankets and pillows can be purchased on board.

In premium economy, a seat pitch of 37″ will be offered with a 12″ personal entertainment screen and noise-cancelling headphones.

Checked luggage (in addition to a free cabin bag), hot meals drinks and snacks, priority boarding, and in flight entertainment will be complimentary for customers flying in premium economy.

High speed internet connectivity will also be available for a charge for all passengers.

The availability of refunds and flight changes and seat selection will depend on the type of fare purchase in both cabins.

IAG promises one way fares economy from €99 and one way premium economy fares from €599.

Direct flights are on sale now at Flylevel.com

Connections will be available from Vueling’s short-haul network at Barcelona which, of course, operates from London Gatwick and Heathrow and a number of UK regional airports.  However, flights with connections need to be booked via Iberia.com

Members of the Aer Lingus, British Airways and Iberia frequent flyer programmes will be able to earn Avios on all flights operated by Level.

The launch of Level is a clear competitive response by IAG to Norwegian which is launching new routes from a number of IAG markets in Europe.  We have already seen a number of moves such as the launch by BA of routes from Gatwick to New York JFK, Fort Lauderdale and Oakland.  BA is also planning to “densify” (that’s add more seats) some of its Boeing 777s to compete against Norwegian. We are likely to see further moves such as the launch of “unbundled” long-haul economy fares by Aer Lingus and BA.

As IAG have adopted a trans-national brand name, the airline will no doubt explore more routes from other European cities where connections from Vueling are available, such as Rome and Paris.  Looking at the branding and marketing materials, IAG is actively pitching this airline at a younger market than many of its existing airlines.  It will of course be interesting to see how this develops and whether it launches any routes from the UK.

A summary of British Airways news and developments at International Airlines Group’s 2016 Capital Markets Day

International Airlines Group, the parent company of British Airways (and Iberia, Aer Lingus, Vueling) held its annual Capital Markets Day on Friday 4 November.

Whilst the event is very much aimed at investors with industrial quantities of Powerpoint (you can view the full side deck here), there are number of announcements of interests to passengers.

Here is quick race through some of the announcements and general themes of the day (and some things that were not announced):
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The European Commission approves International Airlines Group’s takeover of Aer Lingus

International Airlines Group’s takeover of Aer Lingus moved another step closer this evening after the European Commission gave formal approval of the deal.

It is subject to some conditions, known as “commitments” in order to assuage competition concerns of the European Commission.

These are:

1. IAG must forfeit up to five slot pairs at London Gatwick airport for use on routes between London and Dublin and London and Belfast.  One slot pair must be used for London – Belfast, two slot pairs must be used for London – Dublin and the remaining two can be used for either route.

2. IAG must offer rival airlines special prorate deals for passengers connecting from Aer Lingus short-haul flights to long-haul flights operated by rival airlines at London Heathrow, London Gatwick, Manchester, Amsterdam, Shannon and Dublin airports.  This is so rival airlines such as KLM and Virgin Atlantic can still offer passengers connections from Aer Lingus short-haul flights.
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International Airlines Group’s bid for Aer Lingus looks certain to go ahead. What do we know now?

Following the news that the Irish Government has given its support for International Airlines Group’s bid for Aer Lingus and that Ryanair (which holds 30% of the shares in the airline) has also agreed to sell its stake, this means that, barring any last minute complications, it is now a near certainty that the bid will go ahead.

Full details of the bid can be viewed in the offer document. A more easily digestable summary of IAG’s bid for Aer Lingus can be viewed in this IAG presentation.

Here’s a summary of what we know (and don’t know) and what we expect to happen when Aer Lingus joins IAG:
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Irish Government approves sale of Aer Lingus to International Airlines Group – What we now know & don’t know

The Irish Government has today announced its support for International Airlines Group’s bid for Aer Lingus.

Full details of the bid can be viewed in the offer document. A more easily digestable summary of IAG’s bid for Aer Lingus can be viewed in this IAG presentation.

IAG is due to hold a conference call for analysts tomorrow (Wednesday) morning. The deal is also far from done yet as Ryanair (which holds 30% of the shares in Aer Lingus) has yet to show its hand. The transaction will also be subject to regulatory approval.

Here’s a summary of what we know (and don’t know) so far
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International Airlines Group outlines its plans for Aer Lingus as it seeks to assuage Irish Government’s concerns

Since Aer Lingus formally recommended a takeover bid from International Airlines Group (“IAG”) there has been a growing political storm in Ireland amid doubts as to what IAG’s ultimate intentions are for Aer Lingus, specifically with regard to links between the Republic Of Ireland and London Heathrow.

IAG has sought to assuage these concerns by today releasing a statement providing assurances as to connectivity between London Heathrow and Ireland.

Here’s a précis of these assurances.
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Qatar Airways acquires a 9.99% stake in British Airways parent International Airlines Group

Interesting news breaking this morning, and proof that aviation is never dull.

International Airlines Group has confirmed in announcement to the stock exchange that Qatar Airways has acquired a 9.99% stake in International Airlines Group.

The news has been welcomed enthusiastically by IAG CEO Willie Walsh, citing the fact that Qatar Airways has recently joined the Oneworld alliance and British Airways has recently started co-operating with BA on areas such as codesharing on Qatar routes from Doha to Asia.

Willie Walsh also cites the opportunity for further commercial co-operation between Qatar Airways and IAG mber airlines.

There is certainly scope for greater collaboration. For example, BA still serves Doha via a stop in Bahrain and the two airlines could explore a revenue sharing joint-venture on routes to and beyond Doha, as BA has with other Oneworld alliance partners such as American Airlines and Japan Airlines.

At the moment there are no changes to the board structure of IAG. Should Qatar Airways wish to increase its stake in IAG, under EU ownership rules, it would be capped at 49%.

Qatar Airways is not the first Middle Eastern airline to invest in European aviation as Etihad Airways has taken equity stakes in a portfolio of airlines such as Air Berlin, Aer Lingus, Alitalia and Air Serbia. Etihad also has a codeshare relationship with Air France KLM. Emirates has so far eschewed taking equity stakes in other airlines.

Finally, it is also noteworthy that Qatar Airways has invested in IAG at a time when it’s share price is at an all time high, above 550p. IAG’s share price has previously hit lows of around 110p.