Changing dynamics
Vueling’s CEO, Alex Cruz, speaks to Richard Maslen about his airline’s new feeder strategy that he believes will have a major impact on the relationship between low-cost and legacy airlines.
V
ueling CEO, Alex Cruz, has witnessed fi rst-hand the blurring of the divide between European low-cost and legacy airlines, with most carriers now operating a type of hybrid model. He has been at the helm of an airline for fi ve years, fi rst at Barcelona-based clickair, then as the head of the combined airline. Before heading up clickair in 2006, he had built up a strong knowledge of airline operations and economics during a 10-year career with AMR Corp, the parent of American Airlines, in Dallas and London, and latterly as an aviation consultant. When Iberia decided to overhaul its operations at Barcelona’s El Prat Airport and team up with local investors to start the new airline, he was not the obvious choice, but in the subsequent years he has emerged as one of the world’s most respected airline bosses. Now that the merged clickair and Vueling is turning a profi t, he is focused on changing the dynamics of the low-cost/ legacy airline relationship – a move that will further blur the divide between the two airline business models.
“In the past it was all about ancillary revenues,” he tells Routes News. “We were the same as most other airlines in this segment, looking at new ways to make a little bit more money, while keeping our costs low. “We looked more at the ‘added value’ concept,” says Cruz, “studying products that would enhance our offering at a minimal cost to us but a great benefi t to customers.”
An example was introducing a ‘save the fare’ opportunity, where passengers could pay a small charge to hold an airline ticket at the current fare, while they made other arrangements, such as booking accommodation and transfers.
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We have already identifi ed seven major European airports where we could potentially provide feed to the based airline and are hopeful that we could actually get some things set up by September
This approach set Vueling apart from other European LCCs and, as Cruz noted, it is now “moving more towards operating as a traditional airline” rather than a budget operator “by growing the scope of our product”.
Working with Iberia
This has seen the airline take on a number of routes from Iberia at its Madrid Barajas hub, which are operated under the Vueling brand, but interlining and through-ticketing is provided to other destinations in the Iberia network. This means that Vueling will not only be
fl ying leisure travellers but also premium customers that are connecting on to Iberia’s long-haul network from Madrid. “We now have long-haul business-class passengers fl ying on a low-cost airline,” says Cruz. “We are conducting a bit of an experiment and are offering these customers preferential treatment, introducing them individually, providing check-in and boarding benefi ts and complimentary drinks onboard.” The partnership initially covered a couple
of Iberia’s fl ights from Madrid–Miami and São Paulo, but has since been extended to include Barcelona, owing to Iberia’s crew shortages. “We had geared up for this over
the winter,” says Cruz. “We had our own recruitment drive to prepare for the summer schedules and extended our requirement so we were prepared to potentially pick up some routes. When Iberia came to us we had a long list of pre-screened and pre-cleared staff available.”
On March 1, the airline began operating
Iberia’s fl ights to Madrid from Bucharest and Warsaw and in April added Fuerteventura, Lanzarote and Palma de Mallorca, as well as some of its services from Alicante and Malaga.
“It is early days but things seem to be going well,” says Cruz, adding that the airline is now working to also feed other oneworld members, including American Airlines, British Airways, LAN Airlines and Avianca, in Madrid. “We don’t know how long this arrangement with Iberia will continue. It is only planned until the end of October but it will give us good experience and the potential to offer the service to others. We have already identifi ed seven major European airports where we could potentially provide feed to the based airline and are hopeful that we could actually get some things set up by August/September,” adds Cruz.
www.routes-news.com
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