Vueling CEO Alex Cruz said during CAPA’s 'Airlines in Transition CEO Summit' last week that the Spanish LCC aims to have two million transfer passengers in 2012. Vueling only started to sell connection itineraries via its Barcelona hub in mid-2010. Mr Cruz says Vueling’s connection product has proven to be “very successful” and the carrier has been able to reduce minimum connection times at Barcelona El Prat Airport from 90min to 55min. Vueling now serves almost 80 destinations from Barcelona making it, according to Mr Cruz, a “quasi hub” although technically the carrier is still a point-to-point LCC. Vueling transported over 12 million passengers in 2011 and expects to end 2012 with about 16 million passengers.
Vueling expects 2 million connecting passengers this year
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Qatar Airways and Vueling to codeshare as LCC partnerships establish new models
Partnerships of any kind between Europe's principal LCCs and full service airlines are rare. The new codeshare between Qatar Airways and Vueling builds on the interline deal signed between the two in Oct-2014. Moreover, it marks a further deepening of the relationship between the Doha-based super connector and IAG, of which it now owns 20%. Vueling joins IAG-owned airline British Airways in codesharing with Qatar Airways, but the new agreement is more extensive.
Vueling is now carrying Qatar Airways' QR code on 67 European routes. These routes are from/to Barcelona El Prat and Rome Fiumicino, which are Vueling's two biggest bases, and both served twice daily by Qatar Airways from Doha. The accord significantly expands Qatar's offline network, but the value of this and two-stop connections is difficult to gauge.
Vueling NEXT Part 2: new CEO to lead IAG's LCC in restructuring bid to achieve IAG targets
Vueling's new CEO, Javier Sanchez-Prieto, is leading a programme ('Vueling NEXT') to improve its profitability, both through revenue enhancement and cost efficiency gains. Among other aims this hopes to reduce Vueling's high levels of seasonality, to raise aircraft utilisation and to improve labour productivity. Given ambitious financial targets by IAG – action is needed.
Part 1 of CAPA's analysis of Vueling examined its capacity growth and profitability trends since its acquisition by IAG in 2013. Vueling's operating margin and return on invested capital are on a downward trend, hence the new initiative to reverse these trends.
This second part of CAPA's analysis considers the profit improvement programme. During this programme Vueling's fleet will remain broadly flat to 2018, before resuming growth thereafter. Focus markets for Vueling are domestic Spain and Spain-Europe. It has strengths in these markets but faces growing competition from its lower-cost rival Ryanair, which has also been raising its service quality – closing the gap to Vueling's more premium positioning on the LCC spectrum.