Chief executive, chief operating officer and chairman step down as finances falter
Troubled Spanish low-cost carrier Vueling Airlines has overhauled its management structure, casting aside chief executive Carlos Muñoz and chief operating officer Lázaro Ros in an apparent move to appease its biggest shareholder, Grupo Planeta's Inversiones Hemisferio.
Vueling has been hit hard by aggressive fare reductions in the competitive Spanish market. The carrier only turned a net profit of €1.3 million ($1.9 million) in the normally robust third quarter on revenues of €118 million. It turned a €5 million profit in the same quarter last year.
Barcelona-based Vueling says the smaller than expected profit was "completely driven by a fare decrease of 22%, which could not be completely offset by improvement in all other fundamental magnitudes that drive the profit and loss account". It has cut its full-year forecast and is warning that it could post an operating loss of up to €10 million.
Aggrieved by Vueling's deteriorating financial predicament, shareholder Inversiones Hemisferio requested an extraordinary shareholders meeting to discuss replacing some or all of the carrier's board. The investment group in October increased its stake in Vueling to 26.84% from 15.87%, and shortly thereafter it was announced that Muñoz and Ros had agreed to step down, and that former Spanish government minister Josep Pique would replace Barbara Cassani as chairman of the board. Cassani was only appointed chairman in September.
Muñoz and Ros, the founders of Vueling who between them hold an 11.3% stake in the carrier, will remain on the board in an advisory role, as will Cassani. JetBlue Airways chief executive Dave Barger, who leads a team of US investors which holds a 1.9% stake in Vueling, has also stepped down from the board.
Vueling is in the midst of a fare war in Spain, along with Barcelona-based rival Clickair. EasyJet and Ryanair have been rapidly expanding in the market, and the latter recently added bases in Alicante and Valencia.
Pique describes becoming Vueling's chairman as "a great responsibility and a great opportunity to demonstrate to shareholders and customers that Vueling has a bright future ahead".
Source: Airline Business
