Iberia Airlines announced in mid-November that it was going to reduce flights between Montevideo (MVD) and Madrid (MAD) from six per week to five-times weekly on 01Jan13 only to recently announce that it is going to discontinue all service between the two cities effective next April.
The airline has recorded high load factors on the route with the first quarter of 2012 having 89% seat occupancy and the second quarter 84%.
Editor's Comments: While this might suggest good profitability, a lot depends on the average fare yield on the route. Even with high load factors, if nearly all the tickets sold were discounted economy-class fares, Iberia might be losing money on the route. On most routes, a full-service carrier like Iberia would need for 10% or more of the passengers to be higher-fare paying business travelers.
There was speculation initially that LAN or COPA would replace Iberia on the route but neither carrier is authorized to fly between Montevideo (MVD) and Madrid (MAD) plus COPA does not have long-range aircraft for transoceanic flights nor would MVD-MAD fit into its route system. The route would not make sense for LAN either as they would be competing with TAM, part of the same ownership group, whose flights from Montevideo (MVD) to Sao Paulo Guarulhos (GRU) connect to TAM's Madrid (MAD) flights.
BQB Lineas Aereas' owner Juan Carlos Lopez Mena has expressed interest in flying the route on a codeshare basis with Iberia. How this would work given BQB's lack of long-range aircraft is uncertain but a reader of El Pais Uruguay online suggested that BQB might fly the A320 that they are supposed to receive early next year from Montevideo (MVD) to Guarulhos (GRU) or Rio de Janeiro Galeao (GIG) connecting to Iberia. But with LAN/TAM likely to stay in the oneworld airline alliance which Iberia also belongs to, this would seem unlikely because it would compete with TAM's Montevideo (MVD) flights to Guarulhos (GRU) connecting to Iberia to Madrid (MAD).
Sources: Aviacion News 29Nov12
El Observador Uruguay 01Dec12
El Pais Uruguay 01Dec12