Vueling Airlines Q4 and Full-Year Results

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1 Vueling Airlines Q4 and Full-Year Results

2 Contents Q1 general outlook Revenues evolution Cost performance Outlook for next quarter 2

3 EBT: a 23.3m improvement on a year earlier 15 non-profitable routes cancelled key factor for the result improvement GDS has contributed 13.3m to the EBT line Ancillaries: every passenger has spent, on average, 22.6% more than on a year earlier Fuel-price reduction has allowed a 9m cost-base improvement Vueling business model works well in a crisis environment 3

4 Vueling margin improvement keeps on going strong for the fourth consecutive quarter 25 EBIT change on a year earlier. Percentage points +21 pp +24 pp pp Breakeven level at ~ +16/17 pp pp -4 pp 0 Q2 Q3 Q4 Q Q1 08 Offline channel First fleet reduction Second fleet reduction Vueling has been on a profitable path over the last three quarters Source: Vueling 4

5 Vueling has turned into profit since the deployment of the improvement plan on July 08 EBIT change on a year earlier. Percentage points (above) and Euro millions (below) EBIT % change July 07-March 08 on a year earlier - 8 pp + 23 pp EBIT % change from July 08-March 09 on a year earlier m 3.3m EBIT July 08 to March 09 EBIT July 07 to March 08 Vueling is already a profit-making company Source: Vueling 5

6 Contents Q1 general outlook Revenues evolution Cost performance Outlook for next quarter 6

7 Vueling keeps on increasing revenue per flight the fourth quarter in a row Revenue per flight 13.8% up to 8,192 Revenue per ASK 17.6% up to 4.94 Euro cents Travel agent channel made up 23.8% of Vueling s revenue Ancillary revenue per passenger 22.6% up to Some merger synergies have already kicked-in 7

8 Revenues upward evolution in Q1 confirms again Vueling is improving even amid an adverse economical situation RASK increase and revenue per flight over Q % +13.9% , ,198 Q1 08 Q1 09 Revenue per ASK. Euro cents Revenue per flight. Euro Once again, Vueling has confirmed its ability to raise revenues Source: Vueling 8

9 GDS sales keep on growing in Vueling s revenue mix 20% GDS revenue as % of Vueling s total ticket revenue. Monthly 19.4% as of April 15th 15% 10% 5% 0% A M J J A S O N D J F M A GDS is rapidly becoming one of Vueling s mainstays Source: Vueling 9

10 Amadeus acknowledges it: GDS and low-fares are a winning partnership Vueling has become the first LCC featuring full GDS integration º 10

Ancillaries have kept up with Vueling s general revenue increase Ancillary revenue per passenger increase +22.6% 10.19 over Q1 08 Best- and worst-performing ancillary products.

11 Ancillaries have kept up with Vueling s general revenue increase Ancillary revenue per passenger increase +22.6% over Q1 08 Best- and worst-performing ancillary products. Change on a year earlier on Euro per passenger XL seat, seat assignment % 8.31 Hotels % Credit card fee +49.3% Q1 08 Q1 09 Bag fee +34.4% but Insurance (58.7%) Ancillary revenue per passenger. Euro Effect of European Union s opt-in insurance policy Ancillaries grow in spite of the high levels already reached Source: Vueling 11

12 Contents Q1 general outlook Revenues evolution Cost performance Outlook for next quarter 12

13 Fuel-cost decrease has offset other cost increases Overall cost per ASK 2.8% down to 5.58 Euro cent For Q2, Vueling needs to improve ex-fuel costs, which have grown 10.4% year-on-year on Q1 Fuel cost per ASK dropped 36.9% to 1.01 Euro cents Vueling continues its fixed-cost reduction in the run up to the merger Restructuring has been completed 13

14 Cost per ASK, 2.8% down as a result of fuel-cost reduction CASK decrease % on a year earlier cents 4.57 cents CASK ex fuel 1.60 cents Fuel cost per ASK 1.01 cents Q1 08 Cost per ASK. Euro cents Q1 09 Achieving cost efficiencies is now a priority for Vueling Source: Vueling 14

15 Ex-fuel cost increase is down to a bunch of factors Commercial Maintenance cents cents GDS and BSP development so as to reach better-yielding passengers has also led to higher costs Increase in maintenance provisions USD negative impact Q1 08: 1.49 /$ Q1 09: 1.31 /$ in spite of FX hedging Handling Taxes cents cents Route mix design intensive on business-friendly airports, which leads to an increase in revenue at the expense of an increase in costs (handling, airport and navigation fees) Euro cents per ASK New route mix brings higher costs, but more than offset by higher revenues Source: Vueling, Oanda.com 15

16 Fixed costs reduction goes along according to the restructuring plan 19.1m -25.3% on a year earlier 13.0m Q1 08 Q1 09 Fleet and insurance costs, gross. Euro Fleet and Insurance - 6.1m 2.9% increase in aircraft utilization, to 10,8 BH/ac/day It allows Vueling to withstand a flat or falling yield environment Source: Vueling 16

17 Fixed costs reduction goes along according to the restructuring plan -31.7% on a year earlier 8.9m 6.7m Q1 08 Q1 09 Crew costs, gross. Euro Crews - 2.3m 1.0% worsening in cabin-crew productivity more than offset by 5.7% rise in pilots productivity It allows Vueling to withstand a flat or falling yield environment Source: Vueling 17

18 Fixed costs reduction goes along according to the restructuring plan -13.3% on a year earlier 8.6m 7.4m Q1 08 Q1 09 Overheads, gross. Euro Overheads - 1.2m 34.3% reduction in overhead costs It allows Vueling to withstand a flat or falling yield environment Source: Vueling 18

19 Fixed costs and fuel price will keep their downward trend during Q2 Fuel-cost decrease 46% fuel-price decrease in Q % expected fuel-price decrease in Q2 09 Further y.o.y. structural reduction Reduction in fixed costs: 1m+ It allows Vueling to withstand a flat or falling yield environment Source: Vueling, Oanda.com 19

20 Contents Q1 general outlook Revenues evolution Cost performance Outlook for next quarter 20

21 A very significant improvement for Q2 Based on GDS sales Galileo incorporation reinforces GDS strategy Summer route mix Profitable routes take over loss-making ones Easter effect 2009: positive Easter calendar effect in April Higher aircraft utilization lower unit costs Cost-base reduction Further fuel price decreases on Q2 Further decreases on fixed costs Hedge position Fuel and dollar positive position 21

22 Fuel and foreign exchange hedging situation Fuel Q2 09 consumption % average price (USD) As of April 22 nd % USD/Tn Dollar Q2 09 import average rate As of April 22 nd m USD/EUR Source: Vueling 22

23 Merger outlook One single organization May One single face to the customer June One single entity July The new Vueling will sail off from July onwards 23

24 The Vueling/clickair merger will allow for synergies in the following areas: Use of Iberia code share and Iberia frequent-flyer programme Vueling brand strength applied all across Vueling and clickair networks Reduction of fixed costs per ASK Support of an important industrial partner 24

25 To sum up Vueling has exceeded its own target for the last 12 months Positive results are forecasted for

Vueling improves its result in 4 points for the first quarter 2009

Vueling improves its result in 4 points for the first quarter 2009 Improvement in costs was the most important factor for the improvement in EBIT margin Synergies in revenue due to the merger offset the