Feature on Nueva Vueling

The future of the two largest low cost Spanish based carriers, Clickair and Vueling was finally resolved this week with the formal announcement of the newly created Nueva Vueling. (new Vueling)

The newly created LCC will become the largest single LCC in the Spanish market and more importantly the airline will have a key presence at the two major hubs of in the Spanish market, Madrid Marajas and Barcelona El Prat.

The combined airline will hope to cut cost with the synergies available and the planned rationalisation of its fleet. With both airlines operating A320-200 aircraft the integration of the two airlines will be facilitated and the plan is for both carriers to lose aircraft that are currently in each individual fleet.

Firstly Click, with is 45% owned by Iberia, is set to operate 18 aircraft, at one time Click has a fleet of 26 aircraft available, Vueling for its part, will operate 16 aircraft.

Nueva Vueling, is aiming for annual revenues of 800 million Euros and is hoping to generate cost saving revenue in the region 40-45 million Euros.

Certainly in terms of the carriers route network there will be an overlap on routes. At BCN Vueling is currently the largest carrier with over 235000 passengers transported earning revenues of over 28 million USD, Click for its part carried over 154000 pax with yields in excess of 9.5 million USD according to June 2009 MIDT.

Nueva Vueling's bases will be located at Madrid, Barcelona, Seville, Bilbao, Valencia and Malaga and the carrier will serve 12 other Spanish destinations - including the Canary Islands.

It will operate to seven Italian cities plus Paris, London, Amsterdam, Brussels, Lisbon, Vienna, Athens, Nice and Malta.

The network will also include seven destinations in Eastern Europe - including the Russian cities of Moscow and St Petersburg - and two Moroccan cities.

With a 26% share of the Barcelona market the synergies available could lead to other LCC operators seizing upon slots that could become available. easyJet currently operate to BCN from 13 of its based airports with 150 weekly frequencies and looking to increase its share in the Spanish market, Vueling faces stiff completion at both El Prat, and Madrid Barajas with easyJet being already the fourth largest carrier in terms of capacity with over 188 weekly flights, so the synergies involved in the merger could well lead to increased low cost capacity. Similarly in 2005, when US Airways and America West completed their merger it led to the combined carrier losing significant domestic share at its Philadelphia gateway to Southwest Airlines.

With Nueva Vueling having a heavy focus on the business market, the brand will be a new name to the key market of London Heathrow which Click has served since its inception from 4 Spanish gateways. Click has been able to attract feed through its codeshare agreements with Iberia and successfully operate daily routes from Bilbao and La Coruna to Heathrow with a daily rotation. .