The past few years have not been kind to Air Nostrum. The regional airline, which has been operating under a franchise contract with Iberia since 1997, is struggling with the fallout of Spain's relentless economic downturn and an onslaught of low-cost carriers in the country. Iberia's downsizing and social unrest is making matters worse.
Air Nostrum's challenging situation is indicative of the Spanish air transport market, which has seen the bankruptcy of Spanair and Air Madrid, but also of Europe's regional segment. Passenger traffic and associated revenue passenger kilometers flown by regional airlines in Europe have gradually declined over the past decade. Enplanements of member airlines of the European Regions Airline Association (ERA) fell to 60.9 million last year from 84.4 million in 2002.