How airlines are utilizing new vs. traditional distribution tools? Alex Cruz, CEO, Vueling APG World Connect 25 Oct. 2012
How airlines are utilizing new vs. traditional distribution tools?
Is it a future of hybrid airlines? What is a hybrid airline? Does it matter? Is there a single formula for everyone?
INDEX
A.
B.
Vueling
Distribution
C.
D.
E.
What do people want?
Moving forward
What are we going to talk about next year?
A. Vueling
1.Who are we? 2.Business model 3.Future
Who are we?
59 aircraft
Only profitable airline south Europe 74 main airports
14 bases
50 million passengers
Connecting at BCN
Who are we?
Business model
Vueling, the 2nd airline with the lower costs in Europe Future . . .
Total CASK ex-fuel 2011 (câ‚Ź) 7,16
6,89
4,18
4,36
4,58
o It is reasonable that this cost line will improve further 20122014
2,22
Ryanair
o Unlike its LCC rivals, Vueling still has several levers to lower its costs further, e.g. fleet costs
Vueling
easyJet
Norwegian
AirLingus
airBerlin
‌ and traditional airline experience!
New Generation business class
Business model
Empty middle seat Extra pitch Reclining seat Guaranteed Rack Space Snack Priority boarding Exclusive counters Total fare flexibility On board trolley + bag
Future
100 Destinations from Barcelona (1st BCN airline)
International expansion with more basis across Europe BCN
Business focus and continuous growth
B. Distribution
1.Best model 2.Historical evolution of channels
Best model For the first time in the history of the awards, one company – Vueling, has won four of the eight Budgie awards
• Best Airline of the Year • Best Business Traveler Offering • Best Sales Strategy • Best Distribution Strategy
Historical evolution of channels Direct / Indirect Sales Mix 100%
50% 50% 2006
2007
2008
2009
2010
2011
2012
Channel Distribution (’12) Direct Channels
Indirect Channels
Mainly web (Price Sensitive Customers)
Agency: (High value customers)
vueling.com Iberia Agency OTAs Special Ops Cust. Care
C. What do people want?
Different things at different times
1. Business 2. Leisure
Business
No hassle
All inclusive
Punctual
Leisure
Price, price, DIY, price ...
D. Moving forward
1.Need to be everywhere
2.Adapting the product to the consumer
Need to be everywhere
Mobile Apps
GDS
Web
Codeshare
Groups/TTOO
Airports
Call Center
OTAS
Adapting the product to the consumer
Bundled fares
Cheap tickets through the web
GDS indirect channels
Guaranteed Rack Space (14Kg) Snack on board included 1st row with extra pitch, reclining seat and free middle seat Preferential boarding
Seat Advance/Standard
Exclusive counters at MAD and BCN
Included baggage (23kg)
Total fare Flexibility
Advance your flight the same day
Refund permitted Included bag (23kg) + on board trolley
Click & Fly Advance your flight the same day
Typical Vueling fare: Free check-in online, free mobile application ...
IB points
Basic Fare
Optima Fare
Click & Fly IB points
Excellence Fare
E. What are we going to talk about next year?
What are we going to talk about next year?
GDS, like every year
Consolidation of intermediates, like most recent years
Google and ITA
Vueling Future
Pan-european, More geographies
Increase connections with other carriers
More premium
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