Vueling ponders options for more scale

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Barcelona-based operator Vueling is studying ways to add more scale to its business as it sees progress both in the struggling Spanish market and in early moves outside its home market.

"We are happy with how things have gone during the summer," Cruz told ATI during the World Low Cost Airlines Congress in London, in particular citing a strong operational performance. "Trading at the beginning of the year was very weak, as a lot of discretionary travel did not happen," he said, pointing to the Spanish economic difficulties.

But while saying advance bookings look the same as last year, he added: "There appear to be some signs in the Spanish market of some shy fare increases."

The last year has already seen the carrier open its first non-Spanish bases of its merged life, in Toulouse in France and Amsterdam, face the arrival of Ryanair into its Barcelona El Prat base, and operate some flights for part-owner Iberia out of Madrid since the spring as the latter has been trying to overhaul its short-haul business.

Cruz said the Iberia agreement has given Vueling the chance "to see if it can operate in that hub environment from a distribution and passenger perspective". The current arrangement, which is limited in scope by Iberia's agreement with its unions, runs until the end of the winter season, by which time IAG and Iberia may have developed a permanent short-haul solution. "Maybe that will involve us, maybe not, but there is nothing we can do to influence this as it is a decision another company has to make," he added.

Regardless, Vueling is looking at other opportunities for growth, in Spain and abroad, and will consider non-organic options. "We have to get some scale. There will be organic growth but we are wondering if that is sufficient. There could be further consolidation in the marketplace and the opportunity to fill in the gaps," said Cruz.

"We've managed to be profitable since the merger [of Clickair and Vueling] and I think there continue to be opportunities to grow profitably," he said.