Overview - Vueling

Vueling – panache and prices makes for a winning combination

Like many European LCCs, Spain's Vueling looks to the US for its inspiration. But while most aspiring budget carriers emulate Southwest, the Barcelona-based upstart models itself after JetBlue.

The carrier, which commenced operations Jul-04 with two A320s, has made business traveller-friendly features a central part of its service such as operating to major airports and assigned-seat boarding passes which customers can print themselves.

Like JetBlue, Vueling also entered life well-financed, with start-up capital of EUR20 million (now up to EUR60 million after a recently completed capital increase). This includes funds and guidance contributed by JetBlue COO, Dave Barger, and other executives from the iconic new-breed LCC.

The airline quickly built up mass, moving from its original two aircraft to nine today, with a plan to have 16 by the end of 2006. Results benefited from Spain's flag carrier Iberia pulling out of most non-stop markets from Barcelona in the face of low cost pressures from northern Europe.

This, plus the success of the operation it started in Madrid – from where it serves Paris, Brussels, Rome and Barcelona – helped it earn positive net income in the second half of 2005 on revenues of EUR136 million, both figures well ahead of plan.

Positive outlook, but Iberia to respond.

Vueling's outlook is bright. With investor confidence, a compelling product, low costs and more aircraft on the way, the future appears promising for this well-managed airline. The only cloud on the horizon is the response of Iberia. One of Europe's better-run flag carriers, it has begun to reinstall international services at Barcelona.

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