Last summer, International Airlines Group or IAG as its more commonly known created a new low-cost, long-haul airline which it called LEVEL. The new brand initially started flights from Barcelona and Paris to destinations which included Los Angeles, Oakland and even Guadeloupe. Many observers saw the new airline as a way for IAG to compete with the likes of Norwegian, Eurowings and Icelandic low-cost airline, Wow Air.
The whole point of the LEVEL brand was that it was both low-cost and long-haul. IAG, which already owns well-known airlines like British Airways, Aer Lingus, Iberia and low-cost, short-haul airline Vueling created LEVEL to complement their existing brands.
To get things started as quickly as possible, LEVEL wasn’t even started as a separate airline – but rather as a part of the Spanish airline, Iberia. The new carrier took Airbus A330 aircraft which were destined for Iberia and painted them in LEVEL colours – even the staff and the air operators certificate were Iberia.
While IAG says the LEVEL brand has been successful and that it intends to spinoff the airline into a seperate company at some point, the carrier, for now, remains part of Iberia and tickets are even sold under Iberia’s terms and conditions.
Most observers saw LEVEL as a way for IAG to compete with Norwegian’s increasingly aggressive expansion into the long-haul market. But here’s where things get interesting – Norwegian says it will focus its growth at London Gatwick (as well as in Scandinavia and mainland Europe it should be noted), while Willie Walsh, the head of IAG says he can’t see LEVEL entering the UK market for now because the taxes and fees to operate in Britain are too high.
At the same time, IAG has been eyeing up a number of acquisitions in the European aviation sector – the airline group has already made two unsuccessful bids for Norwegian itself and earlier this year, IAG lost out to Laudamotion in its bid to acquire bankrupt Austrian carrier, Niki.
Niki’s failure created somewhat of a vacuum in the Austrian market. Ryanair, Europe’s largest low-cost carrier has bought a stake in Laudamotion, while easyJet has also acquired a number of slots at Vienna airport.
Now, it looks like IAG wants to go head to head with Ryanair and easyJet as it taps into the Austrian market – announcing the expansion of LEVEL into the short-haul market out of Vienna.
LEVEL will begin short-haul operations in just a few weeks – with four Airbus A321 aircraft set to operate flights to 14-destinations throughout Europe by the end of the summer. The first flights will depart Vienna on 17th July for Palma de Mallorca and London Gatwick. Other destinations include Barcelona, Malaga, Ibiza, Dubrovnik and Valencia.
“We are launching this new short-haul subsidiary to provide Austrian consumers with more flight choices across Europe,” a spokesperson for IAG commented.
“These flights will be branded as LEVEL to build upon the huge success of our new long-haul low-cost operation.”
What’s striking about this announcement is that IAG has decided to expand its LEVEL brand while ignoring the fact that the group already owns a short-haul Spanish airline in Vueling. One reason for this seemingly odd decision may be that Vueling has a somewhat negative reputation with European travellers.
IAG has acquired an Austrian air operators certificate so the new airline will be operated as a sperate entity. It’s unclear whether the airline intends to hire local staff or draw from its Spanish pool.
Each A321 will seat 210 passengers in an all-economy configuration with fares being touted as low as €24.99 one way. As with most low-cost carriers, LEVEL will unbundle fares and food and drink will also be offered for purchase.
Earlier this month, Carsten Spohr, the head of Lufthansa which owns Eurowings said he would expand the low-cost carrier through acquisitions. In response to speculation that Lufthansa was itself interested in taking control of Norwegian, Spohr was reported as saying: “Everybody talks to everybody right now. It’s a small continent.”
Meanwhile, Willie Walsh has distanced himself from reports that IAG is desperate to do a deal with Norwegian – telling reporters that it wasn’t a deal that had to be done. Instead, it appears that IAG will expand its own airline brands.
