Spanish low-cost airline Vueling has indicated that prospects for Q3 are positive, as “bookings are evolving cautiously well”.

Published: 27 Jul 2009

Spanish low-cost airline Vueling has indicated that prospects for Q3 are positive, as “bookings are evolving cautiously well”.

Vueling, in its second quarter results, mentioned that it broke even on a yearly, 12-rolling month basis, with a €17.5m operating profit before restructuring costs being factored in. The airline has completed the implementation of its restructuring plan. The plan was based on four pillars - network rationalisation, access to new market segments, focus on ancillary revenue, and cost-base reduction.

The company posted a €13.4m operating profit (excluding restructuring costs) during the second quarter, with an operating margin of 12.7 percent. Overall, gross revenue decreased by 5.3%, to €105.4m.

Revenue per passenger stood stable, at €75.36 per passenger. Ancillary revenue decreased 14.9% to €9.69 per passenger, as a consequence of the EU opt-in policy on online insurance, while pure fare revenue increased by 3.3 percent to €54.81 per passenger. Seat load factor improved by 3.7 percentage points and reached 73.1 percent.

Revenue per flight increased by 5.3 percent to €9,870 as a consequence of the two factors: stable yields and improving seat load-factors.

Travel-agent sales stood around 22 percent of Vueling’s ticket revenue, 20 points above the same period on a year earlier. Vueling started its GDS rollout in June last year. In the slightly over nine months since that date, indirect channel sales grew from a symbolic amount to become Vueling’s fastest growing revenue stream, over and above 20 percent of Vueling ticket revenue.

First-half results

The company reported first-half earnings before interest and tax (EBIT) of € 3.7 million, which compared with a loss of € 43.5 million in the same period of last year as it cut unprofitable routes to reduce costs and boost revenue per flight. However, the EBIT result excluded €10 million of restructuring costs, meaning it made a net loss of €3.3 million, while revenue fell 9.8 percent to €180 million.

Posting its last full-quarter results as an independent airline, the budget airline said it would make a pre-tax profit this year.

“While possible increases in fuel prices remain a source of concern, the company expects to post a pre-tax profit for the full-year period, even after restructuring costs are factored in,” the company said.