Spanish low cost airline Vueling has spoken of what it must to do continue operating, on the day it announces a bold new connection strategy via its Barcelona base.
Vueling’s CEO Alex Cruz, speaking from the airline’s Barcelona headquarters today (June 1), outlined its “New Sustainability Model” in which legacy carrier-like services are offered while at the same time keeping costs to an absolute minimum.
“We do not believe that we can survive without cutting costs,” said Cruz, a statement that appeared to conflict with the main announcement today, that of Vueling’s launch of connecting flights via Barcelona.
As of yesterday, Vueling added 418 connecting flights to its online inventory, with the first flights starting on July 5. Cruz admitted that this would incur new costs involved in the transiting of passengers, such as luggage handling.
But Cruz added that the new costs were in line with its low cost base ethos, and that the airline would continue to issue the same shareholder guidance.
According to Cruz, the new “Vueling-to-Vueling” connecting flights have the potential to double the traffic passing through Barcelona, also known as El Prat, thereby elevating it to the status of a hub airport.
“During 2010, connecting passengers will amount to between 250,000 and 350,000 people, doubling the existing number of connecting passengers at El Prat Airport,” Cruz said.
Vueling projected further, estimating up to one million new passengers by 2011. Cruz said more than one third of the new traffic would consist of Italians, French, Dutch and central Europeans on their way to Spanish destinations.
Cruz said that more than 10 per cent of its passengers at El Prat, or roughly one million, would be connecting passengers “that would not have passed through Barcelona if Vueling had not been offering this service.”
Cruz admitted that the new tickets would not be competitively priced on all routes, but just on some where rival carriers are not already well established.
He said that passengers would see the best fares on routes from Spain to Eastern Europe including Russia, and up as far as Paris.
Vueling hopes the new tickets and the wider network they effectively create, will tempt business travellers keen to fly “low cost” further. As an added incentive, Vueling, in partnership with Barcelona’s operator Aena, will offer free wifi to connecting passengers with waits of more than two hours.
“We’re going to continuing adding more services for business passengers, to make us an airline that is competitive not only on the passenger side but also on the cost side,” Cruz said.
Other incentives include discounts at airport shops and restaurants. For passengers with waits of more than four hours, discounts at the Wellness Spa, hairdresser and VIP lounge are also available.
When asked whether Vueling would look to tailor its connecting flights to target services offered by other airlines, for example transatlantic flights, Cruz said it was “the next logical step.”
But he added the caveat that such a manoeuvre would be taken very carefully, and in line with its sustainability model.
Vueling’s relationship with Oneworld also appears to be strengthening through its association with Iberia, one of its major shareholders. The most obvious evidence of this is its participation in the Oneworld frequent flyer programme, where Vueling buys points through Iberia which can then be passed on to passengers.
Cruz attacked what he called the “punitive” ancillary charges rivals such as Ryanair rely on, such as baggage and booking charges. Instead, Cruz, whose airline boasts “very high ancillary revenues”, pledged to introduce a “major new ancillary charge” every quarter that would not be punitive in nature, as he put it.
Vueling merged with low cost carrier Clickair in July 2008, before the decision was made to drop the combined airline’s only London route. Cruz said that London was among the cities it should be serving from Barcelona, along with Zurich, Munich and Frankfurt, but to enter the UK capital and compete with Easyjet would take “a lot of self-confidence”.
www.vueling.com