Spanish shake-up on the cards?
Vueling is looking for a strategic investor as it struggles to compete in the overcrowded Spanish market.
The carrier's largest shareholder, Grupo Planeto's Inversiones Hemisferios, has confirmed it is in talks with other airlines interested in investing or merging with Vueling. Grupo Planeto revealed in late January it has spoken to some shareholders of rival low-cost carrier Clickair. Industry sources say it has also approached Air Berlin and easyJet.
A tie-up with Clickair would make strategic sense. The two carriers operate the same aircraft type and have headquarters in the same building near Barcelona airport. They also have a similar route network with over 30% overlap.
Spanair, which SAS put on the selling block last year, will also likely be acquired by another Spanish carrier. Air Comet parent Grupo Marsans was the first to announce its intention to make an offer but reportedly decided to drop out after Iberia's board decided in February to submit a bid.
Five Spanish companies including Iberia have equal 20% shares in Clickair, which previously stated it preferred to stay independent and focus on fast internal growth. It carried 4.6 million passengers in 2007, its first full year of operations, and already serves 40 destinations.
Clickair operates 24 A320s and was planning to grow its fleet to 28 this year but recently decided not to take any more A320s until early 2009. "We felt we didn't want to put more fuel into the fire of overcapacity in the Spanish market," says chief executive Alex Cruz.
Vueling now operates 24 A320s and has dropped plans to add 12 aircraft in 2008. The unprofitable carrier, under new management, may need a partner to survive.
Cruz says capacity grew by 15.7% last year in the Spanish short-haul market, including a 61.5% increase among low-cost carriers. Demand has not kept up with the capacity gains as load factors in the market dropped by 1.8 percentage points last year.
Source: Airline Business
