Initiative set to win Iberia Airlines deal

Iberia Airlines is on the verge of appointing Initiative to handle its £27m pan-European media planning and buying account following a five-way pitch.

Spanish flag carrier Iberia's media business has been managed by the Publicis-owned agency ZenithOptimedia from its Spanish office since May 2002.

Other European networks that bid for the business are thought to have included the incumbent ZenithOptimedia, Vizeum and two further agencies. The pitch was led by Initiative's office in Madrid.

Media activity will cover approximately 20 markets in Europe, in which Iberia Airlines operates, and some international destinations, such as South Africa.

Last month, Iberia Airlines launched a no-frills off-shoot, Clickair, to rival low-cost carriers EasyJet, Ryanair and Air Berlin, which have secured almost one-third of air travel in Spain.

Clickair, based in Barcelona, flies to 12 destinations, but not to the UK, although it has plans to add more destinations at a later date.

Rising fuel costs offset a better underlying performance for the airline during its results announcement in August. It posted a net first-half loss of EUR9.24m (£6.2m).

Iberia attributed the fall to a 54% increase in fuel bills due to inflated crude oil prices. However, analysts forecast good prospects for the Spanish airline with healthy passenger numbers and a diversification of its business.

The Iberia win would give the Interpublic-owned Initiative network a much-needed boost following a string of high-profile account losses. Its £400m General Motors account across Europe and a £15m media planning and buying account for Tommy Hilfiger were both picked up by Aegis-owned Carat.

At the start of November, IPG's Interpublic network lost its £67m central and eastern European media planning and buying account for Unilever to Omnicom Media Group's PHD network. Iberia's new media business arrangements are expected to start from 1 January, 2007.

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