Wednesday, 9 June 2010

Vueling vs. Ryanair: the battle for Barcelona has started!

The arrival of low-cost airline Ryanair to Barcelona has got the incumbent airlines up in arms. The Irish airline has designated BCN to be its 42nd base in Europe and is going to start 20 routes from the Catalan capital this September (Ryanair already serves "Barcelona" through two of its bases: Girona, GRO, and Reus, REU, both about an hour away from the city) . One of the airlines presumed to be most affected is local carrier Vueling, that although operating on a low-cost model, prides itself on a superior level of service, including flexible tickets and a frequent flier programme, that would make it more similar to a full-service network airline (it will soon start offering connection flights too).

In a pre-emptive marketing move, and while not a single Ryanair plane has yet been spotted at BCN, Vueling has launched an online campaign,"We love clouds", that offers everyone that bought a ticket with Ryanair on the 27th of May (the day after Ryanair announced the new routes) to make the outbound leg of the trip with Vueling, free of charge. Vueling is playing on its strength in customer service, with the obvious goal to make people notice the difference in service and comfort between the two legs of the trip: outbound with Vueling and inbound with Ryanair.

I have flown with both airlines and, in what comes to the "travel experience", I share Vueling's conviction that they will win hands down, however, and now more than ever, short-haul air passengers have proven to be quite price-sensitive and here Vueling is going to have a more difficult challenge ahead...


Suau said...

Dear Miquel,

Very interesting post. In addition to your analysis. I also think that the entrance of Ryanair in BCN will not only create a battle between Vueling and Ryanair, but also intensify the competition between Vueling and Spanair.

Spanair has been developing a very small hub at BCN and working very close with Star members through code-sharing. This was a clear niche market for Spanair.

The announcement of Vueling of offering connecting flights at BCN should be understood within the frame of Iberia's strategy and the need of Vueling to be differentiated from Ryanair: both are lowcost carriers, but Ryanair is a hard discounter, Vueling is not.

In this regard, Spanair will suffer increasing competition from Vueling, Vueling will suffer from Ryanair and Spanair operations, and Ryanair will have more space to grow. Competition is good for customers, prices might decrease. Nevertheless, in many cases there has been the need of some level of monopoly to develop a hub. Spanair and Vueling will be competing, which will not help any of both airlines in their aim of building a hub at BCN.

Pere Suau-Sanchez

Miquel said...

Very interesting comments, Pere! and let's not forget Easyjet, that also has a substantial presence at BCN, looks like a very crowded marketplace...I hope that in the long run this will make everyone stronger and more efficient...would be tragic that BCN missed the chance it now has to develop a proper hub!

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