Airline Weekly - February 17, 2005
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Airline Weekly - February 17, 2005

Europe’s Sunny Getaway: Spain Sees Big Benefits As Air Traffic Booms

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Cover Story

Europe’s Sunny Getaway: Spain Sees Big Benefits As Air Traffic Booms

In a world plagued with chronic underdevelopment, Spain is a shining beacon of hope. Burdened with widespread poverty, international isolation and an oppressive dictatorship not much more than a generation ago, the country has since joined the ranks of wealthy, democratic nations. How did it do it? Strong leadership and a healthy dose of European Union aid surely didn’t hurt. But neither did Spain’s illustrious history, sunny weather and beautiful beaches. Thanks to those attributes, more people visit Spain than any other country in the world, with the exception of neighboring France. And in 2003, according to the World Tourism Organization, Spain received $42b from these visitors, more than any other country earned from tourism, save the much larger United States. In fact, Spain is now, by some measures, the largest air travel market in the European Union, and tourism continues to be vital to the growing Spanish economy. The country’s airports handled 152m passengers in 2003, despite a population of just 43m people, less than Germany, England, France and Italy.

Madrid is one reason for the air travel boom. As the capital city in a country where average incomes have grown 75% in the last three decades, Madrid generates considerable originating business and leisure travel. The city also, of course, attracts its fair share of tourists and serves as the main connecting hub for Iberia, the country’s largest airline. Iberia has also turned Madrid into Europe’s premier gateway to Latin America, a region that generates about 12% of the airport’s international traffic. Altogether, this combination of business, tourist and international connecting traffic makes Madrid the fifth busiest airport in all of Europe, surpassed only by London Heathrow, Paris, Frankfurt and Amsterdam.

Other Spanish destinations not known for their sunshine have also contributed to the growth in Spain’s air transport market, which has nearly doubled in volume in the past ten years. Cities like Bilbao, now a home to some of the world’s most innovative architectural works, and... (342 of 1368 words)

Also Inside this Issue:

Press reports regarding Lufthansa’s imminent takeover of Swiss remained unconfirmed this week, even as Swiss unveiled its quarterly results. But consolidation elsewhere in Europe marched along as Germany’s DBA and Germania Express joined forces.

The week also brought a steady stream of earnings news, highlighted by profits at Qantas, Air France/KLM and Thai Airways. Things were not so good at Alitalia and WestJet.

With earnings season largely finished in the U.S.—a few regional carriers have yet to report—attention is turning to efforts by United and US Airways to emerge from bankruptcy. United says it has the funding it needs lined up provided it can close the deal on its plans to secure more labor savings. US Airways, meanwhile, still must find the funds it needs to emerge, and do so before a June deadline. Its turnaround just got harder this week with AirTran’s decision to fly to Charlotte.

There were no laser shows and flying acrobats in Seattle this week, but Boeing did unveil its new ultra-long-range B777, a plane that could ultimately be as influential as the Airbus A380. Though a niche product, the plane could impact some key markets currently flown with mandatory stopovers.

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