Vueling’s move into Amsterdam represents a continuation of the carriers strategy to open bases outside of Spain. The Hub earlier this year analysed Vueling’s move into Toulouse, its first overseas base since the demise of its Charles de Gaulle venture, so why has Vueling chosen Amsterdam as its second foreign base?
WHY BASE AN AIRCRAFT IN AMSTERDAM?
Vueling already operates Amsterdam from a number of cities in Spain and will have been encouraged by the performance of these routes in Amsterdam. With traffic levels high in Amsterdam, it makes sense to base a unit where there is demand.
IATA BSP data shows that over 3 million O+D passengers travelled between Spain and The Netherlands during September 2009 and 2010. Vueling will be able to offer a number of Spanish destinations with low, medium and high frequency.
Operating these routes with Barcelona based aircraft, would lead to excess capacity as the aircraft would need to return to Barcelona each evening, and a probability of flights operating at the wrong time of day. The Amsterdam based aircraft will be able to offer suitable levels of frequency and schedule.
A COMPETITIVE MOVE?
Vueling may also sense an opportunity to block easyJet from creating a large Spanish network from Amsterdam, from where it continues to expand. Vueling will be able to match easyJet in terms of destinations served and frequency with an Amsterdam based aircraft.
According to IATA BSP data, easyJet carried 8% of all passengers from Amsterdam between September 2009 and September 2010, making it the second largest carrier behind KLM which has a 38% of passenger share, Transavia has a 7% share.
KLM has also hauled Transavia (its low-cost subsidiary) capacity back from Copenhagen, from where it recently closed its base, to Amsterdam. Vueling may have sensed a reluctance from Transavia to expand new routes from Amsterdam. Its aircraft have been available for lease outside of Holland and this could be a less risky strategy than opening new routes in what is a mature Dutch market.
Vueling will see an opportunity to attack its network. Interestingly four of Transavia’s top five markets from Amsterdam are Barcelona, Malaga, Alicante and Valencia according to IATA BSP data, markets where Vueling will be able to provide very strong competition.
KLM owned Martinair did remove its short-haul fleet from Amsterdam and this may suggest that there are gaps in the Dutch market which could need filling. Vueling’s new base is not just designed to attack Transavia and protect its Spanish market from easyJet but also to build a brand in a market where it already has a presence.
Vueling will establish Iberia's low-cost presence in Holland and perhaps indicates a willingness by the BA/IB Group to defend their territory using an airline appropriate for some of the regional Spanish markets.
Vueling decision to base aircraft in Amsterdam is largely based around four factors.Amsterdam is a large market with acceptable low-cost competition in the shape of easyJet and Transavia with no Ryanair presence. A strategical move to block easyJet expansion into Spain from Amsterdam and it will give Vueling the opportunity to serve thinner Spanish markets with low frequency.
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