In the early 2000s, the low-cost airline industry was booming across Europe. Companies such as easyJet (U2) and Ryanair (FR) had established themselves as successful pan-European carriers.
Legacy airlines that had once dismissed these upstarts now had to pay attention as these ‘lo-co’s’ increasingly encroached on their route networks and passenger numbers.
Spanish flag carrier Iberia (IB) was seeing its market share decrease in the northeast Catalonian region of the country, especially after the arrival of another low-cost carrier (LCC), Vueling (VY).
Vueling took to the skies from Barcelona El-Prat Airport (BCN) on July 1, 2004, bound for Ibiza (IBZ). By 2005, VY had opened its second base in Madrid. Iberia needed to react.
Speaking about the growing threat of LCC’s at the time, a spokesperson for Iberia’s said: “We were losing ground in Barcelona so quickly…it is better for us if the low-fare passengers are taken over by Clickair and not Vueling or Ryanair.”
And so ‘Catair’ was born, a joint venture between Iberia, Iberostar, Cobra, Nefinsa (parent of Air Nostrum) and Quercus Equity. Each party owned 20% of the start-up, but IB would be tasked with establishing and running the new airline, which had one of the best-financed start-ups in history with an initial capital of €120 million.
The ‘Catair’ name, chosen to represent the airline’s CATalonian Barcelona base, was subsequently dropped in favour of Clickair (XG). Management said this represented the concept that more low-cost airlines were selling tickets via the Internet.
In September 2006, Alex Cruz was named as the airline’s new Chief Executive, just as the carrier was awarded its Air Operators Certificate (AOC). Cruz said the airline would adopt what he referred to as a ‘third-generation low-cost carrier model.’
“We want to mix traditional low-fare carriers with what standard traditional carriers have at incremental prices. We want to give whatever the customer is willing to pay for,” Cruz said.
This would involve XG offering low-fare and no-frills for its budget passengers while allowing customers to choose frills such as frequent flier miles and meals. Iberia flight codes were placed on XG flights, and the Spanish flag carrier even withdrew from several routes, handing them over to Clickair.
Cruz was quick to point out that XG was an independent airline, and the arrangements were done as they made commercial sense. “There is a specific desire for Iberia and Air Nostrum to treat this as a separate investment,” Cruz said. “Iberia does not want to influence Clickair…We know the failures when bigger airlines get involved in smaller low-cost carriers.”
XG’s new boss also wanted a unique livery and initially decided to copy American Airlines (AA) bare metal colour scheme. However, after taking the paint off an A320 (EC-ICS), Cruz soon acknowledged that it wasn’t a good move. Speaking to Airliner World magazine in 2007, he said: “We removed the paint from several panels on the first aircraft and it looked terrible.”
Management chose a quick change to a “shiny silver” like grey, and the first five airframes were painted in this colour.
But engineers soon discovered that this paint was 309lb (140kg) heavier than a regular mix of paint and required three additional days in the hanger to coat the airframe. A standard grey livery was then adopted moving forward from February 2007.
Operations commenced on October 1, 2006. Three 180-seat ex-Iberia Airbus A320s (EC-GRE, EC-GRF and EC-GRG) were utilised, initially operating routes from BCN to Seville (SVQ), Geneva (GVA), Zurich (ZRH) and Lisbon (LIS) and between SVQ and Paris-Orly (ORY).
Management had ambitious plans, which envisioned a fleet of 30 A320s operating 70 routes by the end of 2008. By January 2007, the airline had five ex-Iberia A320s in operation. The following month it became the first LCC to operate in to London Heathrow (LHR), with daily flights to Valencia (VLC), SVQ and La Coruna (LCG). Clickair subsequently moved the SVQ service to London Gatwick (LGW).
The airline’s rivals quickly dismissed their new competitor. Vueling CEO Carlos Muñoz said: “We welcome Clickair to an already competitive market, but although a new competitor would normally be bad news because of extra capacity on our routes, Clickair is purely substituting capacity from Iberia.”
Meanwhile, outspoken Ryanair boss Michael O’Leary said that Clickair was “just another rubbish attempt by a high-fares airline to set up a low-fares airline.”
However, Clickair quickly proved its doubters wrong. In its first three months of operation, the airline had carried over 300,000 passengers. By the end of year one, this number had swelled to over 4.5 million across 50 domestic and international routes. Its fleet had swelled to 22 Airbus A320s, and it held the biggest share of traffic at its BCN hub.
On April 26, 2007 the XG received its first brand new Airbus A320.
In April 2007, the carrier began to receive its first brand new Airbus A320s. These were part of an order placed by parent Iberia, who had the time was reducing its short-haul fleet.
Their arrival allowed XG to add domestic routes from BCN to LCG, Malaga (AGP), Santiago de Compostela (SCQ) and Vigo (VGO). Mini-bases were also established at Bilbao (BIO), LCG, SVQ and VLC.
But by August 2007, the intense competition had begun to take its toll on the county’s LCC’s.
Clickair decided to take a more cautious approach to its previous expansion plans. These would have seen the carrier operate 24 A320s by the end of 2008 and 30 by the end of 2009. “We felt we didn’t want to put more fuel into the fire of overcapacity in the Spanish market,” said Cruz at the time.
“We are at a point of saturation in Spain that is unsustainable, and will only get worse,” he added.
However, the carrier launched its new internet check-in service to reduce airport delays. It claimed it was the first airline in the world to offer such a service. Free-seating had also been swapped for pre-assigned with an additional charge for seats with more legroom at the exit row and bulkhead.
Speaking about the new innovations, Cruz told Airliner World: “We have lots of ideas and are happy to embrace innovation, but we will only proceed with a project if it fits into our tight cost control.”
Clickair’s closet rival Vueling was also struggling. In November 2007, the carrier went through a complete management restructure. CEO Carlos Muñoz and Chief Operating Officer (COO) Lázaro Ros were out. This move was made to appease its biggest shareholder, Grupo Planeto’s Inversiones Hemisferio.
Sadly this was not enough, and in February 2008, the shareholder officially announced it was looking for a strategic investor. Clickair was the immediate frontrunner. The two airlines shared the same base, operated the same aircraft and had a 30% route network overlap. But XG had previously stated that it would prefer to stay independent and ‘focus on fast internal growth.’
Competition pressures continued to mount in the Spanish sector, and in July 2008, the two airlines announced they would merge. A memorandum of understanding was approved by Vueling’s board which set out the terms for the merged carrier to operate under the Vueling brand and remain headquartered in Barcelona. “The operation will be structured as Clickair’s statutory merge into Vueling, by way of the former’s extinction and the latter’s capital increase,” said Vueling.
In November 2008, the airlines formally notified the European Commission of the plan. Regulators ordered the two carriers to release slots at Barcelona and other European airports. The commission stated that the merger raised “serious doubts” over competition on 19 routes – seven international and 12 domestic.
Finally, on July 15, 2009 Clickair and Vueling’s merger was complete. Clickair was no more. The Vueling brand survived because Cruz explained it was “a very strong brand,” which “spent a lot of money on this at the very beginning.”
“Vueling is considered as the ‘apple’ of Spain. These are attributes people relate to,” he added.
Iberia retained a 45% shareholding in the new airline, and Alex Cruz remained in charge.
Twenty of the carrier’s A320s went to Vueling, while the remaining aircraft went to other operators.
While Clickair’s story may have been a short one, it made its mark on the low cost industry, quickly establishing itself as the biggest operator at BCN.
N.B. The author does not own the rights to any of the images included in this article unless otherwise stated.
© Jet Back In Time by Lee Cross