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How airlines are utilizing new vs. traditional distribution tools?Alex Cruz, CEO, VuelingAPG World Connect25 Oct. 2012
How airlines are
utilizing new vs.
Is it a future of hybrid airlines? What is a hybrid airline? Does it
matter? Is there a new vs.
traditional distribution
tools?
matter? Is there a single formula for
everyone?
INDEX A.Vueling
B.Distribution
C.What do people want?
D.Moving forward
E.What are we going to talk about next year?
Who are we?
Only profitable
59 aircraft 74
main airports
14 bases
50 million passen-
gers
Connecting at
BCN
profitable airline south
Europe
Business model
Vueling, the 2nd airline with the lower costs in Europe
Total CASK ex-fuel 2011 (c€)
7,166,89
4,584,364,18
o Unlike its LCC rivals, Vueling still has several levers to lower its costs further, e.g. fleet costs
Future . . .
4,18
2,22
airBerlinAirLingusNorwegianeasyJetVuelingRyanair
e.g. fleet costs
o It is reasonable that this cost line will improve further 2012-2014
… and traditional airline experience!
Business model
New
Gen
erati
on
bu
sin
ess c
lass
Empty middle seatExtra pitchReclining seatGuaranteed Rack SpaceSnackPriority boardingExclusive countersTotal fare flexibilityOn board trolley + bag
New
Gen
erati
on
bu
sin
ess c
lass
Future
100 Destinations
from Barcelona(1st BCN airline)
Internationalexpansion
BCN
expansion with more
basis across Europe
Business focus and continuous
growth
For the first time in the history of the awards, one company – Vueling,
has won four of the eight Budgie awards
Best model
• Best Airline of the Year
• Best Business Traveler Offering
• Best Sales Strategy
• Best Distribution Strategy
Historical evolution of channels
Direct / Indirect Sales Mix
50%
50%
2006 2007 2008 2009 2010 2011 2012
100%
Channel Distribution (’12)vueling.com
OTAs
Special Ops
Agency
Cust. Care
Iberia
Direct Channels
Mainly web(Price SensitiveCustomers)
Indirect Channels
Agency: (High value customers)
Seat Advance/Standard Exclusive counters at MAD and BCN
Adapting the product to the consumer
Cheap tickets through the web
Bundled fares
GDSindirect channels
1st row with extra pitch, reclining seatand free middle seat
Snack on board included
Preferential boarding
Guaranteed Rack Space (14Kg)
Excellence FareOptima Fare
Typical Vueling fare: Free check-in online, free mobile application ...
Basic Fare
Seat Advance/Standard
Advance your flight the same day
Included baggage (23kg) Total fare Flexibility
Exclusive counters at MAD and BCN
Refund permitted
Click & Fly
IB points
Advance your flight the same day
Included bag (23kg) + on board trolley
Click & Fly
IB points
What are we going to talk about next year?
Consolidation of intermediates, like most recent years
GDS, like every year
Google and ITA