Will Vueling survive Ryanair’s invasion of El Prat?
One year after the Vueling-Clickair merger, Vueling Airlines’ results are, according to me, very disappointing.
However, for the past few months, Vueling had been showing signs of improvement. Indeed, since its merger with Clickair, the two airlines seemed to have each gotten something out of it. Vueling’s load factor had increased its passenger traffic figures were increasing too. Just 15 days ago, Vueling revealed again that its “load factor improved 3.5 percentage points to 70.1 percent from a year earlier while the number of passengers doubled to 2.2 million” and that it “carried 864,000 passengers, more than double the number carried a year ago as the number of its flights doubled after its merger with airline Clickair”.
In others words, all the data published by Vueling was positive, making me think that this carrier could be one of the most dangerous threats to Ryanair.
Cities served by Vueling
Let’s go back a few months, at a time when I’d written an article about Ryanair’s arrival at El Prat. Alex Cruz, CEO of Vueling, subsequently contacted me via the AirObserver blog. I liked what he had to say, and it had confirmed, once more, what I’d been thinking: that even if Vueling is a small European player, it’s an innovative airline that has managed to build a very valuable brand image.
Latest financial results are very bad:
2 days ago, Vueling published its first-quarter financial results. Essential financial data depicts a terrible reality. While the merger should have permitted Vueling to reduce its costs and increase its business, no real changes have been noticed.
As ATW online noticed, “Vueling Airlines reported a €6.3 million first-quarter net loss” almost on par with the deficit it posted in the year-ago quarter as a standalone company”
More alarming yet, is the fact that the Vueling merger did not reduce the carrier’s operating costs at all. On the contrary, as incredible as it might seem, Vueling’s total expenses climbed 84% to €154.8 million and operating loss deepened 35% to €13 million from €9.6 million in the year-earlier period.
I won’t bet on Vueling’s future. Since looking over these figures, I think that Ryanair’s arrival at El Prat (despites Ryanair’s presence in Reus and Girona) is anything but a surprise. Ryanair must know of Vueling’s situation and wants to take on the Spanish airline. Those times, when I believed that Vueling could be the main threat to UK low cost carriers like Ryanair and EasyJet, are now far behind.
The question now goes more like this: Will Vueling survive Ryanair’s invasion of El Prat?
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