Air France, which is celebrating its 90th anniversary this year, would surely have dreamed of a better gift. The group led by Ben Smith was snatched this summer from the position of leading French company by Volotea. This small Spanish low cost, founded eleven years ago, has become the French number one, with 61 destinations served in France, compared to only 58 for Air France. In its defense, Air France cannot fight on equal terms with its cut-price competitor. The cost per seat of Mr. Smith’s company is almost three times that of its own low-cost subsidiary Transavia. The gap would be even greater with Volotea, known for driving its costs even lower.
The success of the Spanish company is not only linked to the “cost-killer” talents of its Spanish founder, Carlos Muñoz. It is first of all the result of a constant strategy since 2012: connecting medium-sized towns without going through the capital and at unbeatable prices. These are so-called transverse lines, such as Bordeaux-Lille or Perpignan-Nantes, which make Volotea successful.
“In 2023, we plan to transport six million passengers”announcement to World Mr. Munoz. Building on its good forecasts, the company should post profitable activity and a turnover greater than 730 million euros, he indicates. In short, Volotea manages to make money where all other companies lose money.
The French market: 60% of its turnover
Air France had to abandon, in 2021, services to Lyon, Bordeaux and Nantes from Paris in exchange for aid of several billion euros from the State. Three cities for which there is a less polluting alternative by train, in less than two and a half hours. Three destinations that Air France hastened to stop, because they have been in deficit for a long time. Mr. Muñoz notes this: “Traditional airlines have reduced their presence in their regional domestic market to concentrate on supplying their hubs” from Roissy for Air France, from Amsterdam for KLM or from Heathrow for British Airways. He intends to take advantage of this trend.
If Volotea is Spanish by birth, France has established itself as its first market with eight bases, installed in Bordeaux, Strasbourg, Nantes Toulouse, Lourdes, Marseille, Lyon and Lille. France weighs heavily in Volotea’s accounts: 60% of its annual turnover, or more than 400 million euros. To further increase its revenue per passenger, currently set at 65 euros, the company plans to operate between “12 and 15 bases in France within five years with the hope of transporting ten million passengers annually”specifies the founder.
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