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Vueling improved its gross results by 23.3m euros, with an earning before tax result of (9.0m euros) and a gross margin of (12.2%), compared to a result of (32.4m euros) and a margin of (36.0%) the same quarter of 2008. Revenue per passenger grew by 10.8% to 68.55 euros, which took revenue per flight to grow by 13.8% to 8,192 euros.
Seat-load factor went 1.33 percentage points up to 66.6%, for the first time over the last five quarters, in spite of Easter not being held this quarter, which did happen on 2008.
Ancillary revenue per passenger grew 22.6% to 10.19 euros, driven by the good behaviour on several products: XL seat and seat assignment, hotel bookings, and baggage fee. Ancillary revenue already makes up 14.9% of Vueling’s total revenue. Travel agent sales represented 23.8% of Vueling’s revenue, to a total of 17.6m euros, 8.3m euros up from Q1 08, thanks to the GDS rollout. Vueling started selling over Amadeus on June and in Galileo on September.
Overall cost base was reduced by 2.8% to 5.58 Euro cents per ASK, thanks to a 36.9% drop in fuel costs, from 1.60 Euro cents per ASK in Q1 08 to 1.01 cents in Q1 09. Fuel-cost reduction has saved the company 9m euros during the quarter. Vueling has turned into profit since the restructuring plan deployment (on July 2008) with an EBIT result of 3.3m euros for the July-March period.
Vueling forecasts a very significant improvement in Q2, both in revenue and cost lines. It is therefore expected that, compared to Q2 one year earlier:
– Revenue per flight will increase again as a result of the cancellation of non-profitable routes as well as the influence of the April Easter effect on bookings and revenues.
– The overall cost base will be reduced as a consequence of (a) higher aircraft utilization, leading to lower unit costs, (b) further fuel cost decreases over Q2, and (c) additional decreases on fixed costs as a
consequence of structural improvements.
As with Q1 09, the company expects for the combination of higher revenues and lower costs to significantly improve its Q2 margin with regards to the same period last year, leading for a positive result for the whole of 2009.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
