Spanish LCC LEVEL On The Cusp Of Deepening Its Roots To The Americas

With only seven aircraft in its fleet, LEVEL is, by far, the smallest of the airlines comprising International Airlines Group (IAG), and often the most overlooked. The airline currently operates from Barcelona-El Prat Airport (BCN) to seven destinations in the Americas: New York JFK, Boston, Miami, Los Angeles and San Francisco, as well as Buenos Aires, Argentina, and Santiago, Chile.

Yet, despite its small operation relative to other IAG airlines, the LCC is content to grow its niche market from the Iberian Peninsula to the Americas.

But with such a small fleet, is it sub-scale?

“Generally, you would say so,” Bernstein senior analyst Alex Irving said. However, “if you’re not going to network and just run a point-to-point operation, I would argue that matters less. Although what happens when an engine goes, and you have to take an aircraft out for maintenance?”

Irving’s view is supported by John Strickland, director of UK independent air transport consultancy JLS Consulting. “Ordinarily you wouldn’t want such a small airline, [but] it’s workable, especially if you have all your aircraft in one place,” Strickland said, further pointing out that LCC Norwegian also initially had a small long-haul fleet, but, unlike LEVEL, contended with the disadvantage of basing aircraft in several locations, such as London Gatwick, Oslo and Stockholm Arlanda. Norwegian eventually gave up its long-haul operations to focus on short-haul services.

A further advantage LEVEL has made for itself is that, after starting out as competition to other LCCs, it’s focused instead on a region where it can seize a potentially larger market share.

“They’ve gone away from the idea of trying to fight Ryanair, Wizz, etc., in Vienna,” Irving said. “They tried to do Austria and pulled out. They still have LEVEL France—my understanding is it would cost them more to shut it down. Then they had this idea of doing a lot in Barcelona. They seem to have found something that they think works.”

Strickland concurred, saying, “When [LEVEL] was born, it had a very particular job in mind. Willie Walsh was in IAG [as CEO] and Norwegian was in full flush as a low-cost operator.”  He noted that IAG had previously tried to fend off low-cost carriers, but by the time they responded, they were dealing with huge players such as Ryanair and easyJet, “and they didn’t want to find themselves in the same position with low-cost long-haul.”

However, Rafa Jiménez Hoyos, who took over as LEVEL’s CEO in October 2024, insists LEVEL is not, in fact, an LCC at all. “It’s a new-generation efficiency-centered airline,” he said.

LEVEL aims to maximize its assets, Hoyos said, while striving to be best-in-class in terms of aircrew productivity. “We try to be very efficient with turnround times. If you have good utilization, you have good productivity.” The airline also keeps a close watch on costs with its providers. And while “those are attributes generally linked to an LCC,” Hoyos conceded, unlike most LCCs, LEVEL’s aircraft have a premium economy cabin.

DIFFERENTIATING THE OFFER

Passengers flying with the airline are largely VFR travelers. Like many other carriers, LEVEL has found that there is an elevated post-pandemic demand among leisure travelers for its premium offering, in a cabin with a 2-3-2 configuration as opposed to the economy’s 2-4-2 arrangement, with larger seats that, while not lie-flat, offer significantly more recline.

Load factor for the premium cabin is “very, very high,” said Hoyos, so much so that LEVEL is in the middle of refitting its aircraft, doubling front cabin capacity from 21 to 42, a move that will boost yields.

Irving and Strickland noted that before the pandemic, LEVEL complemented its long-haul services with a cluster of short-haul routes operated with Airbus A320s and A321s based in Vienna. The latter were dropped shortly after the onset of COVID-19 and there are no plans to restore them. Rather, any expansion will come in the form of more transatlantic routes out of Barcelona and a potential increase in frequencies for existing sectors.

No decisions on destinations have yet been made, but they will all be transatlantic.

To cope with these increases, LEVEL has just taken delivery of its seventh Airbus A330-200, with another scheduled to join the fleet in late 2025 or early 2026. The airline began life with the larger A330-300, but now favors the -200 for its greater range of 11,500 km (7,145 mi.) versus the -300’s 8,800 km (5,468 mi.), which better suits LEVEL’s long-haul ambitions.

Barcelona-El Prat, although a major European airport—it handled 49.9 million passengers in 2023—is not an IAG hub like London (British Airways), Madrid (Iberia) or Dublin (Aer Lingus). However, Hoyos and IAG strongly believe that the Spanish city offers good prospects for growth as a base for long-haul services. Barcelona is the center of the economically powerful Catalonia region of northeast Spain and a major tourist attraction, which benefits LEVEL’s long-haul, point-to-point services, despite not having much in the way of feeder traffic with the exception of service from another IAG airline based in the city, LCC Vueling.

“So, can you support point-to-point long-haul traffic in Barcelona?” Irving questioned. “Perhaps you can.”

Since its inception in 2017, LEVEL has operated under Iberia’s AOC. In December 2024, however, the carrier gained its own AOC, which Hoyos said would allow it to grow faster.

While operational permits for the US, Argentina and Chile are secured over the coming months, LEVEL will formally wet-lease its aircraft to Iberia, allowing them to continue to fly to the US, because the Spanish flag-carrier holds the necessary permits.

Once the formalities are completed, LEVEL will begin operating under the IATA code LL and the ICAO code LVL, using “Dalí” as its callsign—a nod to its Catalan roots, because surrealist painter Salvador Dalí had strong connections with the region.

Irving believes that LEVEL has found a niche in the market but that the company and IAG alike are being cautious and not putting too much by way of resources into it. Barcelona need not be a hub for LEVEL to work effectively, even if it remained sub-scale, he said.

Strickland also believes that LEVEL gives IAG the flexibility of another AOC and another structure within the Group that it can use to develop services and routes. Fleet-wise, it can benefit from economies of scale. “IAG has always been a holding company,” he pointed out, “getting its strength as a Group but keeping entities that resonate in a relevant market.”