AIR EUROPA, S. A.: Gran Via Asima 23, Palma de Mallorca, Bal-aeres, 07009, Spain; Phone 34 (71) 17 81 11; Fax 34 (71) 17 81 86; Http://www. air-europa. com; Code UX; Year Founded 1986. Organized at Palma de Mallorca in June 1986 as Air Espana, S. A., initial ownership of this Spanish charter operator is divided between two Spanish banks, including the Bank of Bilbao, (75%) and the Spanish tour operator Iberiojet (25%). The line specializes in inclusive-tour flights between north and west Europe and the resort locations of the Canary and Balearic Islands.
Operations commence on November 21 with five leased B-737-3Q8s, and the first service is flown from London (LGW) to the company base at Palma de Mallorca.
Although boarding figures are not released, it is reported that a total of 951.5-million revenue passenger kilometers are flown in 1987.
The workforce is increased a huge 90.8% in 1988 to 702 and the fleet includes 4 B-757-236s and 5 B-737-3Q8s, with 8 additional B-757-236s on order.
Weekly B-757-236 flights commence to New York, helping passenger boardings to skyrocket 177.8% to 1,953,277. Revenues of $92.2 million produce operating income of $12.1 million and net gain of $4.6 million.
The payroll grows another 18.8% in 1989 to 830 as two more B-737-3Q8s join the fleet. Early in January, the carrier becomes a partner in the Airlines of Europe group when Air Europe, Ltd. purchases 33% shareholding for ?500,000. B-757-236 frequencies to New York are increased to four-per-week as new routes are stretched to the Dominican Republic and Cancun. Working with members of the Airlines of Europe group, flights are initiated to Scandinavia via Germany and Italy.
Customer bookings continue to march upward, by 17.2%, to 2,288,592 and revenues reach $176.5 million, a 73% increase. Operating income moves down to $2.5 million and net profit is $3.2 million.
Company employment is cut 8.6% in 1990 to 759. Flights begin to Bangkok and Brazil.
Due largely to the terrorism scare that occurs in the wake of Iraq’s August invasion of Kuwait, passenger boardings fall 11.8% to 2,020,000. Revenues, on the other hand, increase by 57.1% to $269.3 million. Expenses also rally and there is an $8.6-million operating loss. Net profit falls all the way to $377,918.
The payroll in 1991 grows to 830 and the all-leased fleet now includes 2 B-737-3L9s, 1 each B-737-3S3 and B-737-375, 3 B-737-3Y0s, and 4 B-757-236s. Flights begin from Madrid and Barcelona to Delhi and Varadero. Following the collapse of the International Leisure Group (ILG) in March, additional banks and a number of tour operators, led by Juan Jose Hidalgo, purchase its 25% shareholding; Hidalgo becomes the airline’s new chairman.
Customer bookings increase 5.8% to 2,138,362, but revenues fall 8.6% to $207.5 million. Still, expenses are down and a $4.85-million operating profit is earned. The net profit is $2.24 million.
The workforce is increased by 14.3% in 1992 to 641 and one more B-737-3Y0 is acquired. Chairman Hidalgo and the bank consortium rearrange shareholding, acquiring 73% ownership; the remaining 27% is taken by the private Spanish travel company Politours, S. A. Scheduled service continues along with long-haul ad hoc charters to New York, Santo Domingo, Salvador de Bahia, Istanbul, Halifax, Havana, Cancun, Delhi, Cairo, and Bangkok.
Enplanements swell 12% to 2,326,365 and revenues recover to rise 14% to $249.99 million. Expenses advance 15.9% to $247.07 million, leaving an operating surplus of $2.92 million. Net gain is cut in half to $1.08 million.
In 1993, Chairman Hidelgo and Director General Jose Perez Lopez are employing 790 workers and possess a fleet comprising 7 Boeing 737-300s and 4 B-757-236ERs. Shareholding changes again, with 92% of the company’s equity passing to the Hidalgo family, with the remainder held by private investor Gil Herminio.
Scheduled services begin on November 1, including a flight from Madrid to the Canary Islands.
The employee population is increased to 850 in 1994 and the leased fleet now includes 4 each B-757-236s and B-737-3Y0s, 2 each B-737-3L9s, B-737-3Q8s, and B-737-4Q8s, plus 1 each B-737-375 and B-737-4Y0. Shuttle flights between Madrid and Barcelona begin on January 31 and, in cooperation with the French airline Euralair, S. A., four-times-per-day Madrid to Paris roundtrip service is inaugurated in November. Also during this month, scheduled domestic routes are initiated from Madrid to Bilbao and Alicante.
Atotal of 3,436,000 passengers are flown on inclusive-tours.
Forty-nine new employees are hired in 1995, a huge 85% increase that brings the workforce total to 899. Passenger boardings jump 25.8% to 4,323,000. Profits are generated: $16 million (operating) and $10 million (net).
Now often more commonly known as “Air Espana,” this company’s workforce is reduced by 6.1% in 1996 to 1,820. In February, the Viajes Halcon travel agency and the tour operator Travelplan, which are both subsidiaries of the Hidalgo family enterprise, begin to act as the airline’s exclusive operators.
On October 1, a 50% stake is taken in the new Tenerife-based Ca-narias Regional, S. A., the company’s first franchise partner. Under terms of the agreement, CR’s British Aerospace BAe ATPs, in modified Air Europa livery, begin flying deep-discount “Air Europa Express” services in November between Palma, Mallorca, and Madrid.
Enplanements accelerate 26.7% to 5,478,000 and revenues shoot up 36.5% to $550,000. With expenses of $535 million, the operating profit declines by a million dollars to $15 million. Net profit, however, grows by $3 million to $13 million.
Airline employment is increased by 22.3% in 1997 to 2,225. The company now offers scheduled services from Madrid to seven domestic locations.
It also offers charters from Spain, Great Britain, Scandinavia, and other points in western Europe to the Canary Islands, Mallorca, Bangkok, Cancun, Delhi, Halifax, Havana, New York, and Santo Domingo.
Following complaints from a consumers’ group and local authorities in the Balearic and Canary Islands, the Spanish government, on April 28, begins a price-fixing investigation of Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.) and two of its rivals. Antitrust authorities in the Ministry of Finance begin to review an arrangement between the flag carrier and Spanair, S. A. and Air Europa, which has seen them end a yearlong price war while increasing fares an almost equal 10% on all Spanish domestic routes and dropping promotional fares.
The Spanish pilots union, SEPLA, concerned that modernization and cost-cutting plans afoot at Spain’s airlines might badly impact its members, stage a one-hour strike at the end of October as a symbolic protest again them.
Subject to government approval, a code-sharing agreement is signed with Trans World Airlines (TWA) in November. When its terms come into effect in early 1998, Air Europa will add its code to TWA flights from Madrid and Barcelona to New York (JFK) and allow the major to place its code on its services to Palma and Malaga from Madrid and Barcelona. The two companies will also link their frequent flyer programs, coordinate marketing, and offer one-stop check-in.
En route to Bodo, Norway, on December 17, a company B-737-4Y0 is mistakenly vectored by ATC to the same 35,000-ft. flight level near Trondheim as an SAS (Scandinavian Airlines System) MD-82 en route from Tromso to Oslo; the near miss that occurs is safely resolved.
Passenger boardings jump 15.9% to 6,339,651.
A franchise agreement, similar to those signed by British Airways, Ltd. (2) and Deutsche Lufthansa, A. G. with smaller regional carriers, is signed with Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.) in January 1998. Under terms of the arrangement, Iberia will take over 11 of the carrier’s 34 aircraft (also employing their crews) and operate them under wet-leases out of Air Europa’s Spanish airport slots.
A mechanical delay at Tenerife on February 10 causes a B-737-4Q8 flight to arrive at Aberdeen, Scotland, at 10:10 p. m. local time, just 50 min. before the airport is due to close under a controversial curfew. The little Boeing is speedily refueled and 148 passengers for the return flight, most of who have been waiting since that morning, are boarded. The plane takes off at 10:55 p. m.
During the spring, the company designates two of its B-737-3Y0s as “logo jets” in the manner of the defunct Western Pacific Airlines (Westpac). One promotes the Andalusia tourist area including Costa del Sol, while the other promotes Volare Martini, with the famous Martini man painted behind the wing.
A code-sharing agreement is also signed with Trans World Airlines (TWA).
In May, a B-737-4Q8 arrives under a four-year charter from ILFC.
Repainted in Iberia livery, two wet-leased Air Europa B-767-3Y0s enter service in May over the flag carrier’s routes from Madrid to Chicago, San Jose (Costa Rica), and Rio de Janeiro.
The British Broadcasting Corporation (BBC) will report early the following year that, according to data compiled by the Air Transport Users Council, 30.79% of the flights made by the charter airline during the summer are more than an hour late. The number of late services is the highest for any European nonscheduled airline, with an average delay of 57.54 min.
In response to strong demand from the British market, the company, with the beginning of its winter schedule in October, inaugurates round-trips between Madrid (Barajas Airport) and London (STN) on Mondays, Wednesdays, Fridays, and Sundays.
Customer bookings plunge 23.6% to 4.89 million.
By the beginning of 1999, airline employment has been cut back 10.7% to 1,802.
When the Air Transport Users Council’s report on the previous summer’s on-time performance is released on February 19, Air Europa, unlike Britannia Airways, Ltd., refuses to acknowledge that the information is correct.
When Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.)
Announces in late April that it will soon be cutting scheduled flights in an effort to relieve congestion at Spanish airports, Air Europa, on April 26 announces that it has no intention to do so. Rather, it will proceed with its expansion plans.
The Palma-London (LGW) route operated by Futura International Airways, S. A. is taken over on October 31.
In honor of the millennium, the carrier, on December 16, unveils a new corporate image and livery.
Subject to appeal, the carrier, together with Iberia Spanish Airlines (2) (Lineas Aereas de Espansa, S. A.) and Spanair, S. A. are fined a total of $865,000, also in December, by the Tribunal de Defensa de la Competencia. Spain’s fair-competition agency has found the three guilty of collusion in the termination of a 1997 price war.
Overall customer bookings this year jump 15.8% to 7.4 million while operating revenues are up 2.6% to $463.11 million.
The workforce stands at 1,920 as 2000 begins, a 6.5% increase.
A B-737-3Y0 is returned during the first quarter; it will be repainted and leased to Aeris, S. A. The first aircraft to wear the new company color scheme unveiled in December is a Next Generation B-737-85P, delivered on April 13. Also during April, the carrier quietly joins the Northwest/KLM-sponsored “Wings” alliance.
Saturday roundtrips begin on April 29 from Zurich to Alicante, Palma de Mallorca, and Santiago de Compostels and from Geneva to Ibiza and Palma de Mallorca.
Mainline pilots vote on May 5 not to fly for Canarias Regional, S. A., which provides “Air Europa Express” services. The last of the Next Generation B-737-85Ps arrives on May 14.
The new B-767-3Q8ER leased from ILFC arrives at Palma de Mallorca on May 23 also wearing the revised livery. On May 31, it transports Real Madrid C. F. soccer fans to Paris where their heroes will play Valencia C. F. in the Champions League final—the first time two Spanish teams have been involved in the big game.
Alitalia, S. p.A. begins to code-share on company Spanish routes on September 6. Late in the month, Iberia Spanish Airlines (2) (Lineas Aereas de Espana, S. A.) makes a bid to takeover Air Europa. Arrangements for the merger are completed, subject to government approval, on October 6. The Spanish newspaper El Pais reports on October 26 that Sociedad Estatal de Participaciones Industriales, Iberia’s majority owner, has yet to approve the amalgamation and, even assuming it does, the final outcome will depend on the Spanish and EU antitrust authorities.
Officials from Air Europa and Iberia publicly confirm the merger talks on November 4, noting that they have set a 45-day limit on negotiations.
World History
