Spain and Portugal for Visitors

Posted by : John Ross on Aug 03, 2008 - 08:41 AM airtravel

(Or should that be shakes-up?) British Airways and Iberia have announced their intention to merge, and the Spanish government is going to partially privatize AENA, the Spanish airport authority. I suppose it's two parts recession to one part higher fuel prices (and in the case of AENA, one part "about time, too"), but something is undoubtedly astir this week in the air travel world. Although the BA-Iberia story is the big one in media terms, the privatization of AENA is more likely to affect you as a visitor to Spain in the short to medium term, not only because the BA-Iberia merger will preserve the two separate brands, at least initially. Ask a Heathrow user if airport management affects the quality of travel.

The government approved the AENA privatization at a cabinet meeting last week. It's a complicated story and not all that interesting, so I'll sum up as best I can: there are two aspects, the privatization as such, and the division of AENA into airport management and air traffic control. The privatization has captured most media attention, because in addition to the sell-off of 30% of the overall value, the cities of Madrid and Barcelona will have an undecided share given to them, while the state will retain a majority holding. As so often, this has excited both Spanish and Catalan nationalists. The latter have insistently demanded that control of Barcelona Airport be given to the Catalan government, the Generalitat, while centralists claim that all concessions to regional nationalists are a step on the road to the disintegration of Spain as a state - ho, hum.

The announced BA-Iberia merger comes as no surprise. On the one hand, British Airways has already attempted a take-over of Iberia, with which it is a partner in the OneWorld consortium. Sorry, alliance. No, damn it, it's a consortium, whatever they call it, and pretty close to a cartel come to think of it (it is no coincidence that BA dominates North Atlantic air routes and Iberia those to Latin America). On the other hand, the airline industry as a whole has its knickers in a twist because of their uncomfortable situation (world recession combined with fuel prices), and Spanair recently announced drastic cuts in routes, "hubs" and payroll - around a quarter of its jobs are to be slashed.