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Alex Cruz, CEO, Vueling

Alex Cruz, CEO, Vueling

» Interview | Monday, June 11, 2012 • Air News Times
ATN: Which is Vueling’s main competitor, a legacy carrier or a low-cost carrier?

AC: Clearly we can compete against all carriers. What we have been able to develop  is a product which is very very similar to that of the traditional carriers but is delivered with a cost structure of the low-cost carriers. So, we have the flexibility to play with price if we want in order to offer very low fares, but we also have the flexibility to attract business passengers in the same plane, by offering access to the products and the types of amenities that business passengers want.


ATN: You have mentioned in your presentations that you want to grow profitably, but you didn’t mention how.

AC: Growing profitability in a high fuel environment needs to be achieved cautiously. So, we are not likely to triple our size in two years. We are more likely to grow as we have over the last few years,  low double digits yearly; this means that we are going to be very careful about where we fly and the kind of partnerships that we form, about the airports that we fly to, etc.

 

ATN: How can you keep the cost low since you have connecting passengers?

AC: Connecting passengers was a big deal for us, because you know the bible of low-cost carriers says  “thou shall not connect“. But we decided to challenge it at our home base of Barcelona.  We have experimented very few additional costs to provide the service with a very interesting revenue upside. We expect to carry more than a million connecting passengers this year.

 

ATN: What does this represent as a total of your passengers?

AC: Still less than 10%, but we feel that is pretty good for an airline with a network which is designed as point to point.

 

ATN:  airberlin is a member in the oneworld alliance. That does affect you negatively, the fact that is a little bit of a hybrid model because of the low-cost segment?

AC: No, it’s quite interesting, because we don’t fly to Germany and there is an interesting synergy there. No, I don’t think that there is a conflict. airberlin is a phenomenal airline, very large, very modern, and we hope that we will get closer to them in the future.

 

ATN: Do you plan also that you have this oneworld connection to have more cooperation with other airlines, with low-cost carriers?

AC: I think the first thing for us is going to learn how to connect with other airlines, particularly with the ones that are closer to us, so Iberia, British Airways, American Airlines, and then - you know – but we have to learn how to do it whilst we continue to reduce our cost base.  That is the real challenge. We tend to be very slow at these types of implementations because everything which comes from the traditional airline world normally comes with a heavy cost – but we are slowly redesigning that world so that we can access it whilst at the same time we can continue reducing our cost base.


ATN: As for the fact that as you mentioned you have business class focus also, what is the percentage of business passenger for you?

AC: So, in the fourth quarter of 2010 we had 41% of passengers which declared that were travelling for business purposes. But you have to understand – we have many destinations with more than 5 frequencies a day: Madrid, Seville, Bilbao, Palma, Malaga, Paris, Rome, Milan, etc.. So, there is a lot of business market particularly on Monday to Friday.

 

ATN: Has the merger between Clickair and Vueling strengthened your position?

AC: Very much so. These were two airlines that were losing lots of money, which have merged and are making lots of money. So, we called it the “100 million turnaround story”. That is how many loses they were making and how much money they were making on the first year. So, we are very happy with the merger, though of course, was challenging to carry out!

 

ATN: What is the role of the social media for your company. And how can these make your airline benefit in order to gain more passengers?

AC: Social media is an important element of our marketing efforts and certainly a key for anybody that works in the consumer sector today. So after much thought and careful planning, we have invested in social media and we are now finally beginning to understand the return on investment, that is, the number of euros per Facebook fan and Twitter follower; and everything points towards a good investment.

 

ATN: If I remember well when you used Facebook to name an aircraft.

AC: That’s right.

 

ATN: Was it something that has added more passengers for you?

AC: Well, we had over 400 suggestions of names, some of which we could never publish. It is yet another marketing strategy within Facebook. Social media and hard selling don’t typically work well together in Facebook, so to go to the different social media outlets to hard sell is not the right strategy. We find it a better strategy to appear within a social media environment with propositions, ideas and motivations which are attractive and engaging to the fan base;  this will ultimately result in a sale.

 

ATN: Don’t you have a cooperation with MTV?

AC: We had an agreement, yes, with MTV, yes, indeed and it worked very well, particularly with young audiences which want to fly to popular summer destinations and we put a lot of emphasis particularly during the summer season.

 

ATN: That means you have also a percentage of young passengers....

AC: Without doubt, Vueling began as an airline that did not assign seats and only sold through the Internet and we have now evolved all the way to what we are now so the leisure passengers and the young travelers are very important to us without a doubt. But now we have realized that it is also very important to have the business passengers.
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