Vueling Airlines turned a €13.4 million operating profit (excluding restructuring costs) during the second quarter of 2009, with an operating margin of 12.7% – a 23 percentage point improvement when compared to the same period in 2008 (operating losses of €11.3m and a negative margin of –10.2%).
Vueling broke even on a yearly, 12-rolling month basis, with a €17.5 million operating profit before restructuring costs being factored in.
Revenue per passenger was stable at €75.36, in spite of the overall economic backdrop and much lower fuel prices. Ancillary revenue decreased by 14.9% to €9.69 per passenger, according to the airline as a consequence of the EU opt-in policy on online insurance, while pure fare revenue increased by 3.3% to €54.81 per passenger.
Seat load factor improved by 3.7 percentage points and reached 73.1%. Revenue per flight increased by 5.3% to €9,870 as a consequence of the two factors above: stable yields and improving seat load-factors.
Travel-agent sales contributed around 22% of Vueling’s ticket revenue, 20 points above the same period a year earlier. The overall unit cost base decreased by 17.3% to 4.98 eurocents per ASK, as a consequence of dropping oil prices and good fuel hedges. Vueling’s non-fuel cost base increased by 5.1%, to 4.12 eurocents per ASK.
During the quarter, Vueling saved €27 million in fuel expenditure as compared to 2Q08. The carrier's cash position, as of July 20th, was of €114.7m.
Vueling believes that the prospects for Q3 are positive, as bookings are progressing well. Moreover, merger synergies will be in full swing during the quarter, which will include:
• cost synergies in advertising, structure and handling, with the aim of reducing Vueling’s non-fuel cost base.
• revenue synergies as a consequence of the Vueling brand rollout, the cancellation of overlapping frequencies and the effect of the Iberia codeshare on Vueling revenue streams.
The accomplishment of these synergies will become Vueling’s main objective in the coming months, and will be the driver behind the company's aim to maintain a competitive edge and cost-position. While possible increases in fuel prices remain a source of concern, the company expects to post a pre-tax (EBT) profit for the full-year period, even after restructuring costs are factored in.
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