Vueling CEO Alex Cruz questioned (05-Jul-2012) the viability of short-haul services operated by legacy carriers in an address to UK's Aviation Club. Mr Cruz also said he supported the Single European Sky (SESAR) initiative, however, stated it needs to be implemented in the right ways to enhance safety, efficiency and capacity. Mr Cruz also condemned rising passenger taxes across Europe. In speaking about Vueling's operations, Mr Cruz said the airline achieved and sustained a mid-70 percentile load factor, with 40% of passengers being business travellers. The airline plans to increase the proportion of business travellers carried to 50% by the end of 2012 with initiatives including adding frequencies on key routes and adding new services including business lounges. [more - original PR]
Vueling CEO questions viability of legacy carriers' short-haul services
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The legal framework prevents tariff increases before 2025, but the outcome was in contrast with the Spanish airport group's own proposal to freeze charges. Strong traffic growth of 11% to an all time high level of 230 million passengers in 2016 may have influenced the regulator's decision.
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In fact, this discount scheme has been quite effective in stimulating traffic growth in recent years. However, traffic growth in Spain was also boosted in 2016 by high airline capacity growth switched from other (risk) markets. Airline yield declines are probably noticeably heavier than AENA's regulated price reduction.
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Among Europe's big three legacy airline groups, IAG is the only one not to have announced long haul low cost plans previously, although its LCC strategy has been the most successful in short/medium haul. Plans by the LCC Norwegian to launch long haul routes from Barcelona in 2017 may have had a catalytic effect on IAG's thinking. In the past IAG has been proactive in creating new platforms, while this move appears a little more reactive.