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Vueling achieved a net profit of 10.4 million euros in 2011. Despite a 40% increase in the price of fuel Vueling has obtained a net profit for the third consecutive year.
Vueling showed a significant growth in activity, increasing the number of carried passengers by 11.6% versus last year. For the full year 2011, Vueling carried 12.3 million passengers. Vueling increased its activity levels while improving the load factor of its flights to reach 75.6%, a 2.4pp increase compared to last year. The increase in activity is due to the new bases of Toulouse and Amsterdam, the Madrid operation, which allows Vueling to feed Iberia’s long haul flights, and the increased activity in Vueling‘s point to point operations.
Total revenues reached 863.5 million euros. This amount represents an increase of 8.4% compared to the revenues recorded in 2010. The increase in revenues is due to a combination of improved unit revenues and increased capacity. Accordingly, revenues per available seat kilometer (RASK) were 2.8% higher than the previous year, to reach 6.03c euros.
Fuel costs continued to climb, reaching a 38% increase for the full year 2011 compared to 2010. The Brent barrel average price for the period was 112.1 dollars per barrel, which is 40.3% higher than the third quarter of last year, when the average price was 79.9 dollars per barrel. Vueling‘s hedging policy partially offset the increase in the price of fuel. The fuel cost per available seat kilometer increased by 30.6%, which is lower than the 40.3% rise in the fuel price. Other costs grew in line with the increase in activity levels, resulting in a cost per available seat kilometer excluding fuel of 4.18c euros.
Vueling maintains a solid financial position and improved available cash. The net cash position amounted to 246.5 million euros as of December 31st 2011, 39.5 million euros more than at the end of 2010. Therefore, the company maintains a solid financial position with no financial debt.
Vueling archived a solid and profitable growth during 2011
The company carried 12.315.721 passengers in 2011, the largest number of transported passengers since inception. This growth was possible due to a 9.2% increase in the number of flights, and to the increase in the average number of planes operated, which reached and average number of 48 in 2011 compared to 36 of 2010. All this growth took place in a profitable and sustainable manner, as the net profit amounted to 10.4 million euros.
Vueling has consolidated its leadership position in Barcelona El Prat and Bilbao, with a passenger market share that reached 23% in both airports. Additionally, Vueling has continued increasing its presence in international airports such as Paris Orly, Toulouse and Rome Fiumicino.
During 2011 Vueling has increased its offer of connecting flights thought the Barcelona airport. Additionally, Vueling has operated connecting flights for Iberia in Madrid from the second quarter of 2011. Accordingly, the number of connecting passengers surpassed 970.000 in 2011, which is six times higher than the number of connecting passengers transported in 2010.
Outlook for 2012
Vueling expects to continue its profitable growth during 2012 and further evolving its business model. Accordingly, the company has set four main objectives for 2012:
1. Growth
2. Cost reduction
3. Revenues
4. New airline agreements
1. Growth. Vueling‘s objective is to take advantage of the growth opportunities that offer the new market conditions in 2012. To that effect, Vueling plans to increase its seat offer by (20-25)% compared to 2011. The company will also continue to increase the number of connecting passengers to reach one million of connecting passengers through its main hub of Barcelona El Prat.
2. Cost reduction. Vueling will continue its structural cost reductions during 2012, with expected annual saving of 14.2 million Euros by the implementation of a new cost reduction program.
3. Revenues. In 2012 Vueling will implement a series of initiatives aimed to improve revenues. These initiatives target four different areas; revenue management optimization, new interline agreements, indirect channel sales and advanced CRM and new online products and services.
4. New interline agreements. Vueling has proven its ability to operate connecting flights with other airlines in a profitable manner. During 2012, Vueling expects to reach from 2 to 4 new agreements with other airlines.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
