Given the shift in how airline passengers now reserve flights, the time has come to propose future strategies in order to be more competitive.  With this, the question arises: low-cost airline or flagship carrier? For the Chairman of Spanair, Ferran Soriano, the answer is to promise the second option. This was one conclusion from today's Matins ESADE session "Spanair: a joint challenge".

Nevertheless, this promise hangs on Spanair's plan to save 100 million euros a year  through cost-cutting measures  recently introduced. Amongst the main cutbacks, Soriano highlighted the downsizing of the airline's fleet (from 45 to 35 planes), a commercial restructure and the withdrawal of loss-making routes (such as Jerez to Madrid and Barcelona).

On another note, Soriano explained that the essence of low-cost carriers is to fly from A to B constantly, which leads to an important reduction in costs. However, "this isn't the way to connect a city with the rest of the world, as these companies lack efficient services, have fewer aircraft and operate from secondary airports not cut out for intercontinental flights", he reasoned.

Soriano believes it is important to be cost-efficient whilst also offering clients the USP of improved connections from Barcelona. Spanair aims to turn Barcelona airport into an international hub and to become a benchmark airline. "For the future of Barcelona and Catalunya", stressed Soriano, "we need to be a hub, which entails the city and the airport being linked to the rest of the world, and even more so in the midst of today's crisis".

Cost-cutting strategy

The airline's chairman stated that the goal of the company's cost-cutting strategy is to yield profits in 2011, which would then be used to fund new routes. To that end, he acknowledged that "for Spanair to have a bright future, we must make sacrifices".

Soriano admitted that the fall in demand has helped the company "sit up and take note of how consumer patterns are changing". 50% of passengers who used to travel  business class now opt for economy; "this is a sign that we must adapt to current consumer behaviour", he confirmed. Along these lines, he pointed out that "the average fare has plummeted and we won't recoup this, so as airlines we must offer lower fares".

With regard to the economic crisis, the Spanair chairman vouched that "recovery is on the horizon. Though still hazy, the clouds will soon lift".