Vueling in the black in 2Q but earnings down on fuel price spike

Vueling, Spain’s third-largest carrier by seats, reported net income of EUR3.6 million in the quarter ended 30-Jun, a sharp year-on-year fall as costs of expansion and more prominently, the cost of fuel, ate into earnings. The 2Q result was not enough to push Vueling into profitability for the first half, with the LCC reporting a net loss of EUR19.6 million for the six-month period. [1713 words]

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This report contains the following subheadings:

• 2Q revenue gains lag passenger growth
• Yields weaker but turning as summer approaches
• Fuel costs the central story
• Vueling venture into new space
• Solid second half expected

This report contains the following charts and tables:

• Financial highlights for three months ended 30-Jun-2011
• Vueling revenue (EUR millions), net profit, and net margin 2Q2007-2Q2011
• Market growth (passenger numbers)
• Monthly fare evolution, 2011 vs. 2010
• Key factors weighing on yields (in EUR cents) 2Q2010 vs 2Q2011
• Spain market share by business model, Jul-2011
• Vueling’s ASK, CASK and absolute cost performance, 2Q2010 vs. 2Q2011
• Vueling fuel hedging policy
• Connecting traffic 1HY2011 vs. FY2010
• Vueling Barcelona network, Jul-2011
• Vueling Moscow network, Jul-2011