The liberalization of the railway sector has definitively promoted the train as an option to travel between Barcelona and Madrid. As of today, the high-speed railway moves passenger figures never seen before, exceeding the demand levels of 2019 and with an increasing market share. An advance to which the plane tries to stand up so that it does not take away customers on a key route.
Iberia has responded to the unprecedented expansion of the high-speed train by increasing airlift flights – its main domestic route – for this winter, with which it has already recovered the same frequencies as in the pre-pandemic season. In total, the IAG airline offers 86 weekly frequencies until March 25, and on Wednesdays (the day with the highest corporate traffic) it reaches up to fifteen daily flights in each direction. From Barcelona airport, the first plane takes off at 7:00 a.m. and the last one, at 9:00 p.m., with flights every thirty minutes. In terms of seats, it reaches 700,000 seats, a figure slightly higher than that of 2019, especially due to the operation with the new Airbus A320neo, with more capacity.
“This increase in capacity for the winter shows our commitment to the recovery of our most important domestic route, to which we dedicate more resources, in which we operate a greater number of frequencies and which is the main corporate traffic corridor in Spain ”, comments María Jesús López-Solás, Commercial Director of Network and Alliances of Iberia. The airline -he continues- "has shown its resistance and its ability to fight in a highly contested corridor with the train and in which, since the pandemic began, up to three new competitors have entered the low-cost segment of the high speed".
Before the pandemic, Iberia had a 60% market share on the air route between Barcelona and Madrid, which has now risen to close to 65%. Apart from the air connection, the air route between the two cities is also covered by Vueling and, to a lesser extent, by Air Europa. IAG's low cost flies between El Prat and Barajas with up to four daily frequencies and, at least in the short term, does not foresee significant changes on this route.
"Iberia's reaction to reinforcing the airlift in the face of increased competition from the train is logical and to be expected," says Pere Suau-Sánchez, professor of Economics at the UOC and Cranfield University. The increase in frequencies is the defense of the plane against the train to stop the loss of market share, adds Suau-Sánchez, thus taking advantage of its greater agility to add frequencies.
Will it be enough for the plane to put up a fight with the new high-speed rail? At the moment, the train has subtracted quota from the airway. The great leap has occurred in 2021. The modal share of the train on the Madrid-Barcelona route was 75.8%, when in recent years it had been around 65%, according to data from the National Commission for Markets and Competition (CNMC) –see attached graph–. The entry of competition in the spring of last year has also caused a significant reduction in the price of tickets that is attracting new travelers to the train, for whom the price factor is important - for the business traveler, on the other hand, this aspect has less weight. High speed fares between Barcelona and Madrid have dropped by 43% on average compared to the pre-pandemic situation, according to data from the Trainline ticket sales platform. The average cost of the ticket is currently 46 euros, well below the 81 euros of 2019. On the other hand, on non-liberalized routes prices have increased by 14% in the same period.
The end of the Renfe monopoly has not made the public company lose passengers either, on the contrary. It is very close to recovering the figures of 2019. In addition, since last summer it has a second complementary brand to the AVE, low cost, Avlo. Between one service and the other, Renfe achieves 81% of the rail market share, indicates the CNMC report on the sector corresponding to the second quarter of this year. The remaining 19% corresponded to Ouigo, which handled around half a million passengers in the second quarter of this year – none of the operators provide data on the number of passengers moving between the two large Spanish cities.
Since the end of November another new actor has come into play, Iryo, the third company that obtained paths to run high-speed trains between Barcelona and Madrid within the framework of liberalization. While Ouigo plays it all at the lowest price, the service operated by Trenitalia, Globalvia and Air Nostrum is committed to comfort and customer service with new high-end trains, far from low cost, to compete directly with the AVE and the airlift. It is a service, says Suau-Sánchez, more focused on the business traveler, the user par excellence of the air shuttle. The two cities have never been connected with such intensity.
