Vueling obtains a profit of 46 million euros in 2010, 66% up on previous year’s results.

Wednesday 23rd February, 2011

Vueling obtains a profit of 46 million euros in 2010, 66% up on previous year’s results.The company increased its revenue by 32%, achieving business turnover of 797 million euros.

Highlights:

Vueling obtained a net profit of 45.99 million euros in financial year 2010. This amounts to a 66% increase on the results of the previous year (+27.78 million €). The net margin stood at 5.7%, an increase of 1.1 points over that of 2009 (4.6%).
During the fourth quarter of the year, Vueling reduced the previous year’s losses by 66%, from -13 million euros in 2009 to -4.4 million euros in 2010. The results for the quarter have been affected by the sharp rise in the price of fuel. Fuel costs have increased by 45%, whereas the remaining costs have dropped by –0.3%.

The sales turnover achieved by Vueling is 796.5 million euros. This is equal to a 32% increase on 2009. The income per unit, that is, the available seat kilometres (ASK), has been 5.87c€, 1% lower than that of the year before mainly due to shorter average stage lengths and the impact of the competitive environment on revenue per passenger. During the fourth quarter, revenue increased by 4% to a total of 167.04 million euros and the revenue per unit increased by 5%.

Vueling has carried 11,036,183 passengers in 2010. This accounts for an increase of 35% on that of the same period the previous year. The company has operated 84,435 flights (35% more than the year before) achieving a total load factor of 73%. During the fourth quarter the airline increased the number of passengers by 3% with a load factor of 72%.

These traffic figures have led to an increase in leadership in the El Prat Airport of Barcelona, with a 26% share. Moreover, Vueling continues to be the leading carrier at its bases in Bilbao, Seville and Ibiza.

The costs per unit excluding fuel costs have dropped by 3%, to 4.07c€. On the other hand, the unit costs of fuel have increased by 32% in 2010. This has affected the total unit cost, which has risen to 5.43c€, 4% higher than in 2009.

The net cash position stands at 207 million euros, with a debt of 23.9 million euros and total cash of 231 million euros at 31 December 2010.

Vueling Airlines, SA
Investors@vueling.com

Outlook for 2011:

During 2011, the company will continue to grow, adding 6 new aircraft to its existing fleet to cater for the activity at its new bases in Amsterdam and Toulouse, as well as an increase in routes and frequencies in the current markets. In addition, it shall take over the flight connection operations for Iberia in Madrid with 5 airplanes during the period March-October, proving its connection capacity for traditional airlines. In total, the company will increase its number of flights and passengers by 15%.

Higher fuel costs over those of the previous year are expected in 2011, which will be partially offset by the continued cost reduction policy, not ruling out the partial transfer of the increase in this cost to an increase in fares. The objective of the company is to maintain a cost per ASK in 2011 at the same level as that of 2010.

A tougher competitive environment is expected in 2011 in the markets in which the company currently operates, especially in some of its main bases such as Barcelona El Prat. In order to counteract this effect, the company will continue to improve its business model, which clearly sets it apart from its competitors, mainly via the continuous improvement of the product and offering, so as to continue to be a leading example within the Spanish and the European markets, for business and leisure travellers alike.

BUSINESS REVIEW:
Vueling Airlines, SA
Investors@vueling.com

Throughout 2010, Vueling has consolidated the process of steady and profitable growth that began with the merger with Clickair in July 2009.

The company has carried 11,036,183 passengers, the highest since its creation. This growth has been made possible by a 35% increase in the number of flights and an increase in the number of aircraft, from 27 in 2009 to 36 in 2010. This growth has been sustainable and profitable, with net profit of 46 million. The main figures evidence this growth:

During 2010, Vueling has faced a tougher competitive environment due to the increase in capacity of some of the competitors at some of the main Vueling bases. Despite this adverse environment, Vueling has managed to maintain its leading position in 4 of its 7 bases, increasing market share during 2010 as shown in the data below on passenger shares.

Throughout 2010, Vueling has successfully implemented all the commercial and logistics operations required to carry out connections between its flights at Barcelona airport. The company has thus carried 170,000 connecting passengers as of June 2010. Additionally, Vueling has reached an agreement to operate connections for Iberia flights from Barcelona and Madrid as of the second quarter of 2011.

Revenue:

Vueling has achieved total revenue of 796.51 million euros in 2010. This figure is equal to a 32% increase on the previous year. The weight of revenue per fare stands at 88% (vs. 87% the year before) and that of ancillary revenue at 2% (vs. 13% the year before). Revenue per fare has undergone a 33% increase and ancillary revenues have risen by 26%.
The increase in revenue has taken place due to an increase in the number of flights offered (+35%) which has led to an increase in the number of passengers carried: 35%. This growth has occurred at a load factor of 73.2%, only 0.5 points less than that of the previous year.

Vueling Airlines, SA
Investors@vueling.com

The unitary revenue of available seat per kilometre stands at 5.87c€, a drop of 2% on the same period the previous year. This decrease is due to the drop in unitary ancillary revenue per available kilometre, which stands at 5%, mainly due to the increase in travel agent sales and the effect of regulations on this type of income. On the other hand, the unit revenue per fare has remained constant at 5.18c€.

Costs:
The rise in oil prices has been remarkable during 2010. The average fuel price was 724$/Tm in 2010, compared with 567$/Tm in 2009. This increase has had a significant effect on the cost base of Vueling. Consequently, despite the hedging policies carried out by the company to soften the effect of this price rise, unit fuel costs of available seat per kilometre (ASK) have increased by 32% in 2010 compared with the previous year.

As for the remaining costs, the company has successfully implemented a cost-cutting plan with 92 cost optimisation initiatives. This efficient management policy has enabled the company to achieve unit costs, excluding fuel, of 4.07c€, a drop of 3% on the year before.