Spanish domestic market recovery disappointing - Iberia

MADRID, April 28 (Reuters) - Spain's flagship airline Iberia is finding the recovery in its domestic market slow, the firm's chairman said in an interview published in Spanish newspaper ABC (Taiwan OTC: 1780.TWO - news) on Monday.

"It seems that Spain has begun to recover. We are seeing signs but that still hasn't translated into our results," Luis Gallego was quoted as saying.

"The recovery is going to be slow. I don't know how long we are going to take to get back to pre-crisis levels (of passenger traffic)."

Loss-making Iberia, part of International Airlines Group , has suffered from the fall of internal tourism in its home country and from competition from the high-speed train operator on key routes such as Madrid-Barcelona.

IAG is targeting a return to profit this year for Iberia after the unit narrowed its operating loss by 185 million euros to 166 million euros in 2013.

Asked about Easter business, Luis Gallego said: "Easter always has good occupancy factors. Another matter is the average spend and there we see that the domestic market isn't picking up as much as we would like."

Gallego said the airline was pressing for Madrid airport's Terminal 4 to be connected to the country's high-speed train network and also talking to train operator Renfe about the possibility of introducing combined tickets for intercity flights and high-speed trains within Spain.

"That has difficulties because it would involve the transfer not just of passengers but also of luggage," he said.

"The high-speed train needs to be an ally and not a competitor." (Reporting By Sarah Morris; editing by Keiron Henderson)