Bad Vueling results

Bad Vueling results

Vueling has championed cheap flights in Spain, being the first low-cost Spanish airline. Vueling multiplied its losses by 5 compared to the same period in 2006.
The stock market took its toll, causing Vueling shares to decline last Thursday by 30%, trading at 15.80 euros, and reaching the all-time low (the starting price of its shares on 12/1/2006 was 34.15 euros , reaching a maximum of 46.70 euros in February of this year, although since last April the shares began a downward trajectory, with four consecutive months of losses.In this framework, we already realized a couple of months ago of the placement of the 3,135,284 shares that Apax owned in Vueling (at 31 euros per share) through an accelerated process (see Apax-Vueling news).

The reasons for Vueling's losses

According to its managers, the competition is making itself felt. Thus the average price of the ticket has gone from 43 to 35 euros. Traditional companies are responding with increasingly aggressive offers, to which must be added a rise in costs derived from increases in the price of oil. Some experts have cited the Clickair foray into Barcelona as a direct attack on Vueling.

However, the announced losses have not been accompanied by a decline in passenger demand. On the contrary, Vueling has experienced a strong increase in the number of passengers, from 1.39 million in 2006 to 2.5 million this year. This has resulted in an increase of 57.3 million euros in income (149 million euros in total income), which has not translated into gains, but in a very substantial increase in losses.
Changes in Vueling plans and Seville operational headquarters
Vueling's CEO has announced the delay in the company's plans for the purchase of new aircraft, the announcement of which was scheduled after the summer, as a result of the company's poor results, worse even than expected. Carlos Muñoz indicated, however, that Vueling maintains its intention to create a new base in Seville, although the airline's new plans are to consolidate existing routes instead of creating new destinations. It also seems that the company's future bets go through the business passengers, which currently represent 30% of total passengers. Vueling has been operating 54 routes during the first half of 2007, increased by 11 in the number of routes where it operates. It has 21 aircraft to carry out its services.

Video: Vueling Airlines Review: Spains Largest Low Cost Airline! (September 2020).