Aviation usually arouses passions. Fan clubs abound and it has a legion of spotters who spend hours scanning airports. Businessman Carlos Muñoz, founder of Vueling who now pilots the airline Volotea, belongs to this world. The manager is once again trying to IPO his company with growth that he hopes to accelerate thanks to the tailwind brought by the unstoppable rise of the travel industry. And it does so supported by France, its main market, where it concentrates half of its activity – more than seven million seats offered in 2024 out of a total of 12.5 million. There it has managed to stand out among competitors such as Transavia or Air France on domestic flights out of Paris. The French press has dubbed him “the knight of the skies.”
The Spanish airline, with operational headquarters in Barcelona and social headquarters in Asturias, has thus found an ally in a country so given to patriotic consumption. “Sometimes I feel like Welcome, Mr. Marshall,” Muñoz joked this week at a gala in Lyon, one of its nine bases in France (21 among all its markets, two in Spain: Bilbao and Asturias). The CEO of Volotea was referring to the attention generated in small and medium-sized cities like Brest by the arrival of his airline. Therein lies its model, establishing itself where others are not and connecting urban centers far from the large metropolises. “65% of the population lives there and we see a journey,” Muñoz stressed.
However, this was not his first business idea after his abrupt departure from Vueling, the company he founded with Lázaro Ros in 2004. The two directors were pioneers in introducing the low-cost model in the Spanish airline sector with Vueling and His success was immediate. So much so that Iberia counterattacked by launching Clickair. That's where the problems began for Muñoz and Ros. The fierce competition from Iberia's low-cost company, its own mistakes and the confrontation with the then first shareholder of Vueling, the Lara family (Planeta), ended up precipitating the resignation of both directors as CEO and general director. The end of this stage is well known: the Laras pocketed 47 million euros with the sale of their shares and Vueling ended up integrated into IAG, which has made it the leader in El Prat and one of the main companies in Europe.
But let's go back to the point where Muñoz and Ros separate themselves from the first airline they founded. Almost immediately they think about launching a new aeronautical project that is not Volotea. The initial idea was to create a low-cost airline for the long haul from Barcelona airport, which today would be Level or in its day Norwegian. The cost, however, was excessive given the financing context of the time. They then change their plans and see a niche in the air connection of medium and small cities. It is 2011 and Volotea is born.
The company has suffered especially with the pandemic crisis, which caused losses (7.7 million euros in the red in 2019). Despite the improvement in activity and profitability that they hope to consolidate this year, they still carry 313 million in debt for the participatory loan received from the SEPI during the covid and an ICO credit, plus 10 million put up by the shareholders.
Muñoz is now convinced that it is time to take the plunge, an operation that would help him pay off debt quickly and financially grease the airline to accelerate its growth. Will it convince the market? “Volotea still must demonstrate its value proposition, its business model and its profitability, it must increase billing and ebitda [operating result]” to facilitate its stock market debut, considers Jaume Puig, general director of GVC Gaesco management. Last year, the airline earned 694 million euros and obtained an EBITDA of 96 million compared to negative 47 million in 2022 – it did not communicate the net result. Also in 2023 it transported 10.4 million passengers. “This industry works with large volumes and increasing passengers is another challenge,” adds Puig.
Regarding the business model, UOC and Cranfield University professor Pere Suau-Sanchez emphasizes that it is situated between a large low-cost airline and a regional airline. “We see this reflected in the average distance of their flights, which is around 820 km, while for easyJet it is 1,200 km and for Binter Canarias it is 400 km.” Its evolution, comments this aviation expert, “should make it very attractive to future stock investors.” Currently, Muñoz, Ros and other directors from Vueling control 50.1% of the political rights of Volotea through Alaeo, Volar Bidco has 29% and Rijn Capital, Rocinante, Merida and Volotea FondoICO-pyme hold a 5% each.
The airline's performance in 2024 will be decisive in deciding its takeoff on the stock market and France will play a key role in this.
