Volareweb well on their way to becoming #3 LCC in Europe- Polish Expansion

[lowfaresbuster]

The network of Volareweb.com increases with new international flights! Volareweb.com offers the following new routes:

Milan Malpensa – Warsaw (from 2 June)

Venice – Warsaw (from 3 June)

Rome Fiumicino – Warsaw (from 16 June)

Rome Fiumicino – Krakow (from 18 June)

[FlyLowCost]

MXP-WAW 4 weekly
VCE-WAW 3 weekly
FCO-WAW 2 weekly
FCO-KRV 2 weekly

They have also a code sharing agreement with Air Polonia on the FCO-WAW routes.

Strong rumors also suggest Volareweb will close one of their Milan airport.
Now they are flying from MXP, LIN e BGY; but to reduce cost it seems they will transfer MXP operations to BGY.
They will keep in MXP only charter flights.

[iceman51]

I am not so sure ...to become #3 you need money, a lot of money, deep pockets, and they don't !

I think it is important to clarify/illustrate some points for non Italians.

1) Volareweb is not an airline. It is simply a trade name used by Volare Group (nothing wrong with it, anyway), the parent company of Volare Airlines and Air Europe Italy (these two airlines have their own AOC). All flts marked Volareweb are flown under thse two airlines'AOCs.

2) At the beginning of March, 2004, Volare Group was basically bust. They were short of cash, have burned their capital, had debt and other financial obligations for hundreds of millions euro, lessors have repossed many of their aircraft (you can search in pprune what happened to ther A330s, and were lucky that in the market there are plenty of aircraft in the A320 category so that the lessors preferred to rearrange the leases and have anyway the aircraft maintened and airborne with Volare Group)

3) On March 9, they got 80 millions euro of new equity; 40 millions from a group of undisclosed Italian investors (surely among them the heavily exposed Antonveneta banking group and its "friends") and the remaining 40 millions - attention !!! - from a dutch newco apparently belonging to the Argentinian entrepreneur Eduardo Eurnekian, the owner of Aeropuertos Argentinos 2000 (the company that runs 33 airports in Argentina)

4) On March 9, 2004, Mr. Giorgio Fossa (former Chairman of SEA (the company that runs MXP, LIN and has 49.98% stake in BGY airports) was named Chairman of Volare Group and Chairman of the dutch newco. He left SEA last December.

5) It might be worth to notice tha SEA has a 28% equity interest in Aeropuertos Argentions 2000 ...

6) ...and that SEA was last december and still probably is the largest single creditor of Volare Group, and that ...

7) ...of course Mr. Eurnekian and Mr. Fossa are good friends

8) and that always on March 9, 2004 Voalre Group officially rescheduled the payment of 120 millions euro of debts ...

9) I leave it up to you writing this point having carfully read the above ones.

As far as I know they are still a big cash-burner, so I don't know how long they will be around. They are never talking about yield, their L/F is just above 60%, basicallye two traditional airlines under a trade name trying to imitate LCCs.

Of course the Italian "miracle" can always happen, they can take benefit form Alitalia's problems, but have to pray that MOL and easy stay away from their routes and the fat Italian market.

As far operations are concerned, they are setting up a base in VCE, and MXP will probably be charter only, but a lot will depend on what will happen to AZ. I do not even exclude a sort of merge with AZ and a splitting of the operations: in the North Volare Group and from Rome and below the new Alitalia ...remember, I wrote above: an Italian miracle can always happen (by the way another former chairman of SEA is now chairman of AZ, I hope nobody gets confused now ...)

I wish them all the best, any way, but to be successful you need to be a true LCC and not simply follow the stream ...

[FlyLowCost]

As you said nothing wrong, also BasiqAir is a trade name or Buzz Stansted Ltd flies only for FR with its own AOC.
And don't forget PE is alive only to keep the slots in LIN.

[I]2) At the beginning of March, 2004, Volare Group was basically bust. They were short of cash, have burned their capital, had debt and other financial obligations for hundreds of millions euro, lessors have repossed many of their aircraft (you can search in pprune what happened to ther A330s, and were lucky that in the market there are plenty of aircraft in the A320 category so that the lessors preferred to rearrange the leases and have anyway the aircraft maintened and airborne with Volare Group)


That's 100% true, but not only due to bad managment, mainly due to the Swissair story. SR bought a large stake in both PE and VA. Then PE was bought by VA and SR had over 40% in VA. But when VA bought PE they didn't get any money from SR. Then SR promised to put money in VA like they did for FU, AirLib, SN and so on. Then everybody know the story.... VA was bought back by its managment. Downturn in charter market, 11 september.... but at the end they are still alive.

As far as I know they are still a big cash-burner, so I don't know how long they will be around. They are never talking about yield, their L/F is just above 60%, basicallye two traditional airlines under a trade name trying to imitate LCCs.


Volareweb load factor in the first year was 65%, (year ending 31 march 2004), but in the first 3 months of 2004 improved over 75%.

but have to pray that MOL and easy stay away from their routes and the fat Italian market.

MOL at this time had worst problems then thinking to enter the domestic Italian market, his problem is called profit warning (but the loss in the last quarter is 99% sure, just waiting to see the financial report).

[GEENY]

F.L.C.,
VA buying PE was bad management.End of story.
Promoting friends instead of professionals was(is) bad management.End of story.
Giving Soddu another toy to brake (after Alpi-eagles) was bad management.End of story.
In Italy,who errs get promoted.The system works well: see Berlusconi,Tanzi,Cragnotti and many others.The aviation is the same,can't be different;kills the innocent,too.The story is on-going.

[Lite]

When there are doubts about an airline's finances, especially if there could be some dodgy dealings, this is never good for an airline. Debonair comes to mind! How are Volareweb doing at the moment, and how significant is the investment?

I see one of the big problems for Volareweb being that outside of Italy, they don't have a very strong brand - unlike Ryanair & EasyJet who are household names, and many people looking for a bargain flight will check these airlines first. The Volareweb brand needs to be much more aggressively marketed.

To be the #3 no-frills airline in Europe, they're going to have to expand beyond Italy. It's a great place to be based, and they're doing what EZY & FR have done in the UK, but they need to establish point-to-point routes & bases across Europe to become a serious third contender. Before Go was purchased by EasyJet, they were seriously seen as the third major competitor, who after the four bases established in the UK, (STN/BRS/EMA/"Scotland") were saying their next base would be outside of their "home" market of the UK. The Go brand was strong internationally, well liked product & always an aggressive competitor - which Volareweb don't seem to be, judging from their entrance into the LTN market.

[colegate]

I do not inderstand how Volare can possiblr be classed as Number 3 in LCC's in Europe. Ryanair ins No 1, Easy is No 2 and Air Berlin is No 3. lOndon accounts for around 40% of all flights in Europe so it has to follow that to be a big LCC you have to have a major presence in London. Does Volare? No.

[iceman51]

Lite:

I agree in full with your post!

Apart from the "Italian way" to run an airline and being financially sound, I firmly believe that to be successful in this very difficult industry you must have these three following "magic" things and, on the top, be able to play across the EU:

(i) product (what the market wants, value for money)
(ii) visibility (brand, etc.)
(iii) placing power (in the markets)

and here in Europe only two airline have the above: FR and easy.

That's it. All other LCCs, including Air Berlin, are still local players, even if, in some cases, important players.

As far as Go is, actually was, concerned I believe they missed a huge opportunity, but their origin was the limiting factor ...

Back to Volareweb and to FLC most recent post:

Volare Group problems are bad management problems.

Full stop, end of story, and they were all over 18 years old.

We will see if they have learned form the mistakes they did.

As far as load factor is concerned, it might be that now has approached the 75% figure, but this does not mean ...profits!