Posted on: 19 September 2011 by Mark Howells
European majors will operate short-haul flights with business class only between their own hubs and those hubs and major cities within the foreseeable future, according Alex Cruz, CEO of Vueling, because the big airlines cannot afford to reach out to some of the regional airports any more.
Speaking during the introductory Route Development Briefing Day at the World Low-Cost Airlines Congress (WLCAC) in London, Cruz said he believes the European air transport market is moving into its third phase, which he called “short-haul, converted”.
With more than 700 aircraft in low-fare airline operation within Europe, the “short-haul, converted” phase sees “permanently lower fares and costs”. At this point in the development cycle, Cruz remarked, established airlines are saying, “We’ve given up on short-haul to focus on long-haul”.
He noted, however, that traditional airlines are responding – Lufthansa with Germanwings, Air France/KLM with Transavia, Iberia with Vueling itself, British Airways by using London Gatwick as a lower-cost alternative and the oneworld alliance welcoming airberlin.
At his own airline, Cruz emphasised, Vueling has been breaking many of “the 10 Commandments” of low-fare airlines, by offering products such as loyalty programmes and connections – initially, in 2010, at Barcelona, but more recently in Madrid.
“We defined a product that we could offer. It was a difficult decision, taken in January 2010. We only did Vueling-to-Vueling connections originally. We knew that had a lot of potential as we have an airport geared to connecting traffic. And it’s been a great success,” he explained, before stressing, “But we continue to design our network as point-to-point services.
“This year, we’ve had the opportunity to connect with other airlines, lightly at first, but recently more heavily, particularly at Madrid with Avianca, LAN, Iberia and American Airlines,” Cruz continued. “In fact, it’s important to find a way to trade with traditional airlines more, but in a way that we don’t have all the costs that dealing with a traditional airline would have. For example, if we had technical problems, we don’t want to take the hit for being responsible for a passenger with a €5,000 long=haul sector missing a connecting flight.”
Looking ahead Cruz sees very few brand new markets open and available. “It’s difficult to stimulate some of the markets now that public funds gone for things like marketing,” he noted.
Summing up, Cruz declared that to be a success as a low-fare airline, it is not enough to have either a very low-cost structure or a business-class product. “You need both,” he confirmed.