On the face of it Spanish low-cost carrier Vueling Airlines (pronounced “welling” I am reliably informed) is doing pretty well, turning in an operating profit of €28 million ($36.8 million) for last year.
Not bad for only the carrier’s second full year of operations, and a big improvement on a €1.6 million operating profit in 2005. This is a creditable performance for a start-up of any kind. It’s also not bad in a country that has seen low-fare competition go from a cosy Iberia dominated scene just a few years ago to one of Europe’s most fiercely competitive markets. EasyJet is a big player in Spain and Ryanair is bolstering its presence too.
Close watchers of airline financials will be keen to see the hear and see the full picture from Vueling. It was hoping to more than double its revenues to €260 million in 2006, but fell short by €25 million. Perhaps that tough competition is beginning to bite?
Barcelona-based Vueling says it has a cash in the bank of €136 million after a successful initial public offering in Spain in December. Some of this cash will be used to open a base outside Spain (its third) and to buy up to 40 aircraft.
The carrier carried 3.5 million passengers in 2006 to 41 destinations with 16 aircraft. Revenues are forecast to rise to €425 million plus.