Iberia Airlines Quits Miami Hub

In the aftermath of the September 11 murders, the US government tightened up its rules of visas for foreigners. Or more accurately, it increased the cumbersome and overly complex rules for getting into the US. While it may have improved American security (or not), it has certainly hurt the US economy. The latest example is the withdrawal of Iberia Airlines from its Miami hub.

Looking at a map, the logic of Iberia, Spain's national air carrier, using Miami as a hub for its services to an from Central America is overwhelming. And the logic of Iberia serving the Americas with a large number of flights is equally powerful as the company's recent revenues show. It has survived the lousy environment for European airlines far better than most -- it turned in profits when others were trying to keep losses low.

However, one of the keys to a successful hub operation is smooth flow of travelers to their destination. Non-stops are great, but most people can live with a single stop on a transatlantic flight provided the layover time is not too great. Indeed, getting up to walk around not only feels good, it can prevent potentially fatal cases of deep-vein thrombosis. However, Iberia says that its connection times in Miami have doubled thanks to the new security measures in Miami, and that has hurt the operations in that city.

Instead, Iberia has decided to pull its four Airbus A319s that had been flying from Miami to Central America, to reduce its twice-a-day service between Madrid and Miami to once a day, and to fly directly from Madrid to Guatemala and Panam a. It will arrange code-sharing deals, and it will ally itself with TACA, the Central American airline. In short, Iberia will embark on a new approach entirely starting in October.

The loser here is mainly Miami. The jobs supporting Iberia's hub are at risk, and the revenues from travelers passing through Miami on their way elsewhere won't show up on any ledgers. Whether the added security provided to America by these heightened restrictions are worth it is difficult to say. What is easy to note is the losses that they have imposed. Iberia is a fine example among many.


© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.


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