In a response to increasing budget competition on transatlantic routes, International Consolidated Airlines Group (IAG), the parent of British Airways, Iberia, Aer Lingus and Vueling, has confirmed that it is to launch new low-cost, long haul airline operations from Barcelona’s El Prat Airport in summer 2017.

The start-up will offer routes into North and South America using an initial fleet of two Airbus A330 aircraft from June next year.

Barcelona seemingly has a good mix of the ingredients needed for IAG to make this new long haul low cost business work. It is a growing market in terms of demand and passenger flows are dominated by IAG airlines Vueling and Iberia providing a strong connecting feed into the long-haul operation to complement local traffic.

After reports appeared in the Spanish press about the proposed business launch, IAG confirmed in a statement: “Barcelona has become a significant airport hub and we believe that there is a demand for these flights from El Prat.” It is believed that the decision has been driven by Norwegian’s plans to open a long-haul base at the Catalonian airport next summer and follows British Airways introducing competing flights to Norwegian in two US markets from London Gatwick in summer 2017.

IAG is understood to be considering a number of markets for the long-haul operation including Los Angeles, San Francisco, Buenos Aires, Santiago de Chile, Havana and Tokyo. Norwegian already has flights to Los Angeles and Oakland on sale from Barcelona, as well as flights to Fort Lauderdale and New York Newark. It could also introduce European link into Argentina and Chile as part of plans to grow its operation into South America.