A SNAPSHOT IN TIME: Vueling’s November Network

It has been a busy final quarter of 2012 for Spanish carrier Vueling after it first revealed a significant network expansion from its Barcelona El Prat Airport base and then in the last week it emerged that shareholder International Consolidated Airlines Group (IAG) had made an offer to take over full control of the carrier. If this deal is completed, and it remains a big if, it would place Vueling under the same holding group structure as Spain’s national carrier Iberia, and of course British Airways.

This year will not be remembered fondly by the Spanish aviation business as it began with the closure of Spanair and ended with a radical business transformation at Iberia, which many believe will save it from potential collapse. However, during this period Vueling has proved that a business based around a low-cost model can excel in this challenging marketplace. The carrier is certainly not following a traditional low-cost model, but it has developed an operational philosophy that has enabled it to succeed when others have failed. Or, as its Chief Executive Officer, Alex Cruz, regularly highlights; “we don’t see ourselves as low-cost carrier. We are simply a carrier with low costs.”

While Iberia’s senior management claimed last week that the carrier is “unprofitable in all its markets” and “is in fight for survival,” Vueling almost doubled its own net profit for the first nine months of 2012 with a €41.3 million result. The carrier made an operating profit of €50.1 million in the third quarter, a 22 per cent improvement on the same period last year, while operating profit (EBIT) rose by 12 per cent on last year to €68.2 million.

In the third quarter Vueling carried 5.2 million passengers, up 22.7 per cent on the same period last year and improved its load factor by 0.3 percentage points to 80.9 per cent. This increase in traffic was partly due to an increasing number of passengers connecting at Barcelona El Prat Airport, which doubled compared with the same period of last year reaching a total of 636,000 passengers in the third quarter.

Next summer Vueling is to expand its network at its Barcelona El Prat Airport base to more than 100 destinations after revealing plans to launch 28 new routes during the 2013 summer schedule. The airline will increase its base fleet in Spain’s second city from 34 to 43 units to support its route expansion, which will also spread to a number of its other European bases during next year. In the past weeks it has also opened bookings for a new three times weekly Malaga – Cardiff route from April 2, 2013; extended its four times weekly Malaga – Copenhagen service into a year-round operation through summer 2013 and announced seasonal flights from Bilbao to Athens and Fuerteventura between June and September next year.

Ahead of its 2013 growth, we highlight Vueling’s network of scheduled flights this month and compare this with the same month last year. Overall seat capacity is up a massive 17.7 per cent in November 2012 versus the same month last year, with strong growth particularly in its home Spanish market. Capacity at its Barcelona base is up more than a fifth on last year while seat availability from Alicante, Ibiza, La Coruna, Palma and Tenerife is up by more than 50 per cent on November last year. Of the top 20 destinations in the Vueling network, only five have reported capacity declines with modest falls at Brussels (down 2.2 per cent) and London Heathrow (down 3.3 per cent), a larger 11.8 per cent fall at Amsterdam Schiphol and more notable declines at Milan Malpensa (down 21.6 per cent) and Madrid Barajas (down 24.9 per cent). Although Vueling has expanded to bases away from its Barcelona headquarters, both in Spain and abroad, Spain’s second city remains the main focus of its network, accounting for 39.1 per cent of its overall capacity this month.