Vueling sees synergies offsetting increased competition

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Spanish low-cost carrier Vueling believes synergies from its merger with Clickair and its efforts to boost revenues can help counter any impact from increased competiton at its Barcelona base.

Vueling, which halved first-quarter net losses to €6.3 million ($8.4 million), expects to achieve its €35 million synergy target - comprising €20 million in revenues and the remainder through costs - this year, following its merger with Barcelona budget carrier Clickair.

Speaking as Vueling disclosed its results, chief executive Alex Cruz said these synergy gains have helped counter heightened competition.

"We are expecting to continue to have a high degree of competitive intensity in the second quarter. Our main rivals continue to maintain and increase their presence in our market," he says.

"We have seen Spanair increasing its position in Barcelona and also EasyJet. But we still believe we will find the synergies and ongoing efforts on the revenue side will offset this competitive intensity by these carriers.

"So we don't believe, at this particular time, we don't expect any significant evolution in [revenue per available seat-kilometre], certainly not in the second quarter."

Vueling's first-quarter revenues nearly doubled to €142 million over the same period last year, as a result of the merger's effectively doubling the airline's size. The increase on a pro forma basis was 2%.

Losses before interest and tax, compared with pro forma figures, fell by a third to €13 million and net losses halved to €6.3 million. The company is retaining its forecast for an improved net profit for the year ahead.