Spanish debt crisis complicates Vueling fleet renewal

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Negotiations over Vueling's autumn fleet renewal order are in "phase three of four", says chief executive Alex Cruz, but the Spanish sovereign debt crisis continues to slow down progress.

Speaking to Flightglobal after the airline's second quarter results briefing, Cruz said talks with Airbus, Boeing and Bombardier had advanced during the Farnborough air show but that there are still "difficult steps" to take.

Being a quoted company on the Spanish stock market creates "certain antics in terms of financing which may be different from other regions," he admits.

"Ultimately all the manufacturers want to have a clear view as to how we're going to do the financing, and they have their own opinions. But we are encouraged by the degree of attention we're getting - from the manufacturers and from finance entities - with regard to Vueling's long-term viability and this particular aircraft order."

The chief executive remains tight-lipped about the size of the order - planned for October - though he reiterates that Vueling is "interested in having a good view on the replacement of the complete fleet as a starting point".

"Beyond that we'll have to wait and see what the prices are like, [and] what sort of flexibility we receive."

Vueling currently operates an all-leased fleet of 55 Airbus A320s and three A319s with an average age of nine years. The fleet renewal programme should involve the acquisition of some aircraft on-balance-sheet, Cruz predicts, adding: "That's something that we're going to have to work through over the next two or three months."

He concedes that even with more fuel-efficient aircraft, Vueling will continue to trail Ryanair in terms of fleet CASKs (costs per available seat kilometre) due to the latter's economies of scale.

But emphasising the Spanish airline's commitment to cost-cutting - which Cruz describes as "part of our DNA ... it's [based] around the culture" - the chief executive says Vueling is confident of closing the gap with its larger rival.