Vueling Airlines

Airlines in transition: Hybrid and low-cost carriers push for better airline-airport relationships

Alex Cruz, CEO of Spanish LCC Vueling, spoke passionately at a recent conference of his need to see partnerships between airports and airlines that are deep and long-lasting. Mr Cruz referred specifically to co-operation that permits both partners to benefit from alternative revenue generation. Ahead of the forthcoming CAPA Airlines in Transition conference in Istanbul – which will feature some 30 airline CEOs addressing this and related issues – we consider how these parties have collaborated in the past and how it is shaping up now.

Vueling Airlines has become one of the innovators of the hybrid/low-cost business model that has become more prevalent and is found in other airlines such as easyJet (progressively) and Flybe (one of the originators of the model).

The fast changing airline industry makes life difficult for airport planners – just as change also offers opportunities.

Vueling grows its low cost Barcelona hub role as Iberia Express focusses on Madrid premium traffic

Vueling's growth this year, the largest since its merger with rival Clickair in 2009, underscores the airline's role as a cost-effective hub carrier with connecting flights at Barcelona's El Prat Airport, a status Iberia concluded it could not achieve in Barcelona, largely pulling out of the market in favour of specially-formed LCC Clickair. After the Clickair-Vueling merger, Iberia retained part ownership (46%, now controlled by Iberia parent International Consolidated Airline Group) while the merged carrier continued its focus on Barcelona. The partnership appears to be working well for both Iberia and Vueling.

That focus has been re-affirmed by the airline's intention to grow summer destinations served from El Prat by a further 10, bringing the total to 70, 23 more than served last year, and representing a 17% seat increase at El Prat. The growth is supported by the addition of four A320s and a single A319.

Global Airport Development preview: 'Y Viva Aeropuertos Espanoles'

Oh this year I'm off to Sunny Spain, Y Viva Espana!
I'm taking the Costa Brava 'plane, Y Viva Espana!
If you'd like to chat a matador, in some cool cabana And meet senoritas by the score, Espana por favor!!♪

(A 1970’s song popularised by Sylvia Vrethammar, which unaccountably sold over one million copies.)

The 18th Annual Global Airport Development (GAD) conference gets under way in Barcelona, Spain on 07-Nov-2011, running through until 11-Nov. Last year’s event, in Dublin, was dominated by concerns about Irish and UK passenger taxes. This year the main talking point will undoubtedly be the postponed concession deal on the airports in Barcelona, where the event is being held (foresight or fortune?), and Madrid. But there will be plenty else to discuss as we attempt here to anticipate the main concerns.

European airline traffic and load factors up in Sep-2011, but outlook mixed for major carriers

European carriers continued to post year-on-year gains in passenger numbers and load factors across their short-haul networks in Sep-2011, with a few exceptions. Europe has posted surprisingly strong traffic results throughout 2011, in spite of weaker local business and consumer conditions. IATA (which represents only full-service carriers) noted in Aug-2011 that “cross-border travel within Europe has held up remarkably well”.

The good times continued to roll for most short-haul carriers in Sep-2011. On the earnings side, however, the outlook is mixed, with several European airlines expanding on their short-term expectations over the past month.

easyJet pushes further into France, throwing down the gauntlet to Air France

easyJet has announced plans to open two new and permanent bases in France, at Nice and Toulouse, which the LCC says will be operational by summer 2012. The carrier will base two A319 aircraft each at the airports, which will be the carrier's 21st and 22nd network bases, as part of efforts to strengthen its French domestic and pan-European network.

easyJet’s moves into provincial France mirrors those being made by national carrier Air France, which is desperately seeking to turnaround its loss-making short-haul business by pushing short-haul capacity out of Paris. easyJet’s plan could be a major headache for the French flag carrier as it aims to cement its dominance in regional France. As easyJet noted, with such a low LCC penetration, relative to neighbouring countries, the LCC onslaught is unlikely to ease anytime soon.

Intra-Europe traffic trends in the right direction, but outlook darkens for Europe’s carriers

European airlines continued to report positive passenger traffic results in Aug-2011, the final month of the summer peak travel period, when European airlines make the bulk of their revenue. Almost all of the major airlines reported year-on-year increases in load factor and passenger numbers, despite the increasingly worrying economic backdrop affecting business and consumer confidence across the region. If such uncertainty continues, European carriers may be in for a bumpy end to 2011.