Barcelona's new bullet train takes fight to Iberia

By Ben Harding

BARCELONA, Feb 20 (Reuters) - Business travellers were impressed with their first taste of a new bullet train between Madrid and Barcelona on Wednesday, highlighting the challenge it poses for Iberia (IBLA.MC) on the airline's heaviest route.

Renfe, the state-run train operator, is hoping to almost double the number of passengers taking the train between Spain's twin business capitals to 6.1 million passengers this year after slashing the journey time by a third to just over 2-1/2 hours.

Passenger Borja Pena-Rich, who owns a building materials firm in Madrid, said the AVE -- which means bird in Spanish but is also an acronym for 'Spanish high speed' -- made better sense than the plane, and from his home in the centre of Madrid to the heart of Barcelona it took about the same time.

"There's not all this getting up and down, getting undressed, that you have with the plane," he said as the train tore across Spain's rugged and empty interior at 300km/hour.

"I have been working for 2-1/2 hours, using the phone and it is much more comfortable. I would take this (train) again."

Pena-Rich said his return ticket, booked the previous day, had cost 180 euros.

Iberia's flexible 'air bridge' service would have cost him just under 400 euros, he said, plus 50 euros he would have spent on taxis from the airport at each end. The same, 'turn up and go ticket' for the train would have cost 326 euros return.

The 7 billion euro train line began operations 16 years after Spain's first AVE began running between Madrid and Seville, Former Socialist Prime Minister Felipe Gonzalez's home town, despite Barcelona hosting the Olympics that year.

But Iberia, which runs 55 percent of the 50-minute flights between Madrid and Barcelona, is not rolling over without a fight.

It points out Renfe only runs 17 trains in each direction every day, some of them slowed by stops in cities like Zaragoza, whereas the airline has promised to continue flying a jet every 15 minutes during peak hours and will use smaller, but not fewer, planes to compensate for a drop in passenger numbers.

It has also just bid for Spanair, its main rival on the route, which would help it minimise any costly price war.

Around 4.8 million people fly between the two cities every year, making it the busiest route in the world. Renfe is hoping to seize 60 percent of the expanded market, according to the Spanish media.

However, Iberia can take heart from one aspect of the inaugural 6 a.m. service: it was only a third full and around half the passengers were journalists.

For a story on the political implications of the new line, click on [L20501405] (Reporting by Ben Harding; editing by David Hulmes)