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Volotea: Spain's pan-European low cost airline continues to grow

Analysis

Volotea is a Barcelona-headquartered, Spanish-registered airline.

It has recently announced that its seat capacity in Spain this northern summer will be 13% higher than in 2023, and 85% higher than 2019.

However, it has more capacity in France and Italy than in Spain, and almost as much in Greece as in Spain. It has 21 bases in five countries (Spain, Greece, Italy, France and Germany) and its network serves 16 countries in total.

Already well ahead of its 2019 capacity and traffic in 2023, its network-wide seat count this northern summer is 46% above summer 2019.

Positioned between Europe's leading low cost airlines and regional airlines and focusing on small and medium-sized cities, Volotea has been one of European aviation's most consistent growth stories over the past decade.

Summary
  • Volotea carried 10.4 million passengers in 2023 –12% up on 2022 and 37% up on 2019. Its 10-year passenger growth average is 22%pa, outpacing capacity growth.
  • France, Italy, Spain and Greece account for 94% of Volotea's seats; it focuses on smaller and mid-sized cities.
  • Volotea sits between LCCs and regional airlines on average trip length and seats per flight.
  • Volotea's average aircraft size has grown from 125 in 2015 to 165 in 2024.
  • Volotea's average weekly frequency is lower than those of the LCCs.
  • Volotea achieved record EBITDA in 2023 (but did not report a net profit figure).

Volotea carried 10.4 million passengers in 2023 - 12% up on 2022 and 37% up on 2019

Volotea was Europe's 12th largest low cost airline by passenger numbers in 2023.

See the related CAPA - Centre for Aviation report: European airlines: top 12 LCCs and non-LCCs ranked by 2023 passengers. LCCs outperform

It carried 10.4 million passengers last year, which was an increase of 12% compared with 2022.

The COVID-19 pandemic then led to a halving of traffic, to 3.8 million, in 2020.

Nevertheless, Volotea was 22% above its 2019 passenger total in 2022 and 37% above it in 2023.

Its 10-year passenger growth has averaged 22% per annum

The airline launched operations in Apr-2012 and carried more than one million passengers in 2013, which was its first full year.

From the 1.4 million passengers of 2013 to the 7.6 million of 2019, its compound average growth rate was 32.6% per annum.

The compound average growth rate over the decade 2013 to 2023 was 22.2% per annum.

Volotea: annual passenger numbers (million) 2012 to 2023

Volotea's traffic growth has outpaced capacity growth

Volotea's passenger traffic growth has outpaced growth in seat capacity over the long term.

Its 2013 to 2019 traffic CAGR of 32.6% was faster than its capacity CAGR of 26.3%.

Its 10-year traffic CAGR of 22.2% to 2023 was faster than its capacity CAGR of 19.0%.

The airline does not publish regular data on load factors, but it reported 92% for its scheduled flights in 2023. This compares with a load factor of 71.0% for Volotea in 2014 (published at the time through the European Low Fares Airline Association).

Seat growth of 14% is planned for 2024

Volotea's capacity growth in 2023 was only 8.0%, its only annual growth rate below double digits outside the COVID-19 pandemic period.

However, it is returning to double digit seat growth in 2024.

In Apr-2024 Volotea said that it planned seat growth of 12%-16% in 2024. Schedules data indicate that it is increasing seat numbers at 14.3% year-on-year in 1H2024.

Volotea: annual seat numbers 2012 to 2023 and IH2023 and 1H2024

Volotea has more capacity in France and Italy than in Spain

Based on capacity scheduled for the week of 29-Jul-2024 (source: CAPA - Centre for Aviation and OAG), France accounts for just over one third, 33.9%, of Volotea's departing seats, Italy for 31.5%, and Spain for 15.7%.

Greece also has a double digit share of Volotea's capacity, 13.3%.

Volotea: departing seats per country, week of 29-Jul-2024

Rank

Countries/Territory

Seats

Share of seats

1

France

118,894

33.9%

2

Italy

110,471

31.5%

3

Spain

55,073

15.7%

4

Greece

46,599

13.3%

5

Croatia

6,417

1.8%

6

Algeria

5,740

1.6%

7

Portugal

2,676

0.8%

8

Luxembourg

1,036

0.3%

9

Denmark

785

0.2%

10

Germany

642

0.2%

11

Czech Republic

572

0.2%

12

Bulgaria

429

0.1%

13

United Kingdom

356

0.1%

14

Norway

356

0.1%

15

Belgium

321

0.1%

16

Morocco

143

0.0%

Italy, Spain and Greece together account for 60.5% of its departing seats, while these three and France account for 94.4%.

Among its four leading countries, the fastest year-on-year capacity growth is in Greece, where seat numbers are up by 16% in the week of 29-Jul-2024.

In total, Volotea's network will cover 16 countries this summer, although the other 12 have only a very small share of its capacity.

All but one of the countries served - Morocco - are in Europe.

The airline focuses on smaller and mid-sized cities

Volotea's network focuses on smaller and medium-sized cities.

Its biggest airport by seats in the week of 29-Jul-2024 is Olbia, a tourist destination on the Italian island of Sardinia, with 7.3% of seats.

Its next biggest is the French regional airport Nantes, with 6.1%.

Athens, the only European capital city among Volotea's top 10 airports, has 4.4%, followed by another French regional airport, Lyon, with 3.2% of its capacity.

Its fifth biggest airport, Verona, has 3.1% of its seats.

The remaining airports in its top 10 all have between 2.5% and 3.0%.

In total, Volotea is serving 101 airports in the week of 29-Jul-2024.

Volotea: top 10 airports by seats, week of 29-Jul-2024

Rank

Airport

Seats

Seat share

1

Olbia Costa Smeralda Airport

51,066

7.3%

2

Nantes Atlantique Airport

42,748

6.1%

3

Athens International Airport

30,952

4.4%

4

Lyon-Saint Exupéry Airport

22,428

3.2%

5

Verona Villafranca Airport

21,436

3.1%

6

Marseille Airport

21,198

3.0%

7

Naples Capodichino Airport

20,514

2.9%

8

Bordeaux Airport

20,088

2.9%

9

Thira Santorini Airport

18,314

2.6%

10

Bari Palese Airport

17,800

2.5%

Volotea sits between LCCs and regional airlines on average trip length…

From CAPA - Centre for Aviation and OAG data on ASKs and seat numbers, it can be calculated that Volotea's average trip length was 890km in 2023.

This was longer by 9% than its 820km average in 2022 - but noticeably shorter than the average trip length for Europe's leading LCCs in 2023. For Wizz Air Group, Ryanair Group and easyJet Group, average trip lengths were in the range 1,200km to 1,600km in 2023.

However, it is longer than the figures calculated for some of Europe's biggest regional airlines: 525km for Air Dolomiti, 394km for Binter Canarias and 328km for Widerøe.

Average trip length (km), 2023: Wizz Air, Ryanair, easyJet, Volotea, Air Dolomiti, Binter Canarias, Widerøe

…and on seats per flight…

Volotea also sits between the leading LCCs and the regional airlines measured by its average number of seats per flight.

This was 165 for Volotea in 2023, compared with 221 for Wizz Air, 190 for Ryanair, 178 for easyJet, 120 for Air Dolomiti, 75 for Binter Canarias and 51 for Widerøe.

Average seats per flight, 2023: Wizz Air, Ryanair, easyJet, Volotea, Air Dolomiti, Binter Canarias, Widerøe

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Volotea's average aircraft size has grown from 125 seats in 2015 to 165 in 2024

By contrast with other LCCs, Volotea operates narrowbodies at the smaller end of the narrowbody range.

Its fleet comprises 20 Airbus A319-100s, with 138 to 156 seats, and 23 Airbus A320-200s, with 174 to 180 seats.

However, its average aircraft size has grown considerably since 2015, when it was still only deploying 125 seat Boeing 717 aircraft.

From 2016 it started to introduce Airbus A319s, so that its average number of seats per flight had grown to 138 in 2019.

In 2021 Volotea added A320-200s, taking its average seat count to 165 by 2023.

Nevertheless, as noted above, this is still considerably smaller than on Europe's leading LCCs.

A challenge ahead will be the need to replace its Airbus fleet - all leased - whose average age is 17.6 years (source: CAPA - Centre for Aviation Fleet Database).

Volotea's average weekly frequency is lower than the LCCs

Data from CAPA - Centre for Aviation and OAG can be used to calculate the average weekly number of departing frequencies per route for Volotea and other airlines.

On this measure, Volotea is not positioned between the LCCs and the regional airlines. Rather, it has even lower average frequencies than the LCCs, prioritising network footprint over frequencies.

Using schedules planned for the week of 29-Jul-2024 - around the summer peak period - Volotea offers an average of 3.1 weekly departing frequencies per route.

For the leading LCCs, average frequencies per route are 4.5 for Wizz Air, 4.8 for Ryanair, and 6.8 for easyJet.

Our samples of regional airlines have much higher figures: Air Dolomiti has 13.6, Binter Canarias 16.2, and Widerøe 10.8 weekly frequencies per route.

Note that these levels are similar to the levels offered by leading FSCs in Europe (for example: Lufthansa 14.8, Air France 13.1, and British Airways 12.9).

A higher frequency offer tends to appeal more to business travellers, an important market for FSCs and regional airlines, while lower frequencies are more targeted at leisure markets.

Average frequencies per route, 2024*: Wizz Air, Ryanair, easyJet, Volotea, Air Dolomiti, Binter Canarias, Widerøe

Volotea achieved record EBITDA in 2023 (but did not report a net profit figure)

Volotea, a privately owned company, does not regularly report financial results, but its CEO Carlos Muñoz has previously expressed interest in a stock market listing within two to three years, provided that it returned to profitability in 2023.

Volotea reported EBITDA of EUR96 million in 2023, its highest ever result for this measure of profitability, on revenue of EUR694 million at a margin of 13.8%.

Since it did not report a net profit figure, it is likely that it may have been loss-making.

However, Volotea is optimistic about its prospects for this year. The airline said in Apr-2024 that it expects 12 million passengers (growth of 15%) and revenue of more than EUR800 million (growth of 15% or more) in 2024.

Volotea's chosen niche is sizeable and growing

Volotea was named 'Best European Low Cost Airline' in 2024 for the third time in four years at the World Travel Awards. It has also been certified as a four star low cost airline by Skytrax, the air transport rating organisation.

This demonstrates that it is quietly building a strong brand, an important factor in its market positioning between the major LCCs and regional airlines.

According to the airline, the small and medium-sized cities that form its focus are home to 65% of Europe's 507 million inhabitants.

It served 410 routes in 2023 and plans up to 450 routes this year, of which it describes more than half as "exclusive".

Volotea's chosen market is a niche, but one that is sizeable and growing.

This article was written on 13-Jun-2024.

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