Could you please present ClickAir to our readers? What are your specificities compared to other European LCCs? What do you do better than your competitors?
The clickair project has been operating since 1 October. In September 2006, the company became a public limited company known as Clickair SA, with its head office in El Prat de Llobregat (home of the E Prat Barcelona airport). The founder partners, each with 20% of the shareholders, are ACS (through its subsidiary Cobra), airline Iberia Líneas Aéreas, the tour operator Iberostar, the company Nefinsa (owner of Air Nostrum, the regional carrier) and the risk capital fund Quercus Equity (Grupo Agrolimen). The company’s Board of Directors consists of ten directors, two representing each partner.  

The operations base of clickair is the Barcelona airport of El Prat. The 2006-2008 strategic plan agreed by the shareholders predicts the development of more than 70 routes in 55 Spanish and European cities with a fleet of 30 Airbus 320 airplanes. The fixed objective by the end of 2008 is to transport around ten million passengers. If the current guidelines of air industry development are maintained, this will make clickair the second Spanish airline in volume of passengers and it will put it among the four greatest LCCs (low-cost carriers) in Europe.

The company has committed a 120 million euro investment until the end of 2008 in order to start and consolidate the project, which will be reflected in the progressive creation of 1,000 direct jobs and between 8,000 and 10,000 induced jobs. With its hub in Barcelona, clickair will contribute to the Catalan tourist, economic and commercial development and will support Barcelona in becoming the core of the Euro-Mediterranean region.

clickair (www.clickair.com) is born from the will of its partners to create an European leading actor in the so-called “low cost” airlines category, currently the fastest growing commercial aviation segment in the world. The main reason for the success of this type of companies is, apart from the low fares, the optimization of the daily number of flights by airplanes, high levels of direct sales and a general structure of costs –except for safety and technical maintenance quality— sensibly inferior to the average figures handled by conventional airlines.

Another important fact is operating in highly-demand routes, aiming at greater occupation of planes in each flight. These factors, and some others, eventually lead to provide the final customer –that is to say, the passenger– with a very adjusted price option which enables him/her to fly with safety, flexibility, reliability and to a variety of destinations.

How do you analyze the competition in Spain with Ryanair, easyJet and Vueling? Which one is for you the main competitor?
Our main competitor, without much doubt, is our own ability to keep costs down.  If we are able to keep costs below the level of the lowest operator in our market, we will arm ourselves with multiple choices for routes and product.  
Having said that we have noticed that there is a strong focus in Madrid at the moment, probably facilitated by the new terminal and the extra capacity it has created.  We understand that Ryanair, easyJet and Vueling have set up bases there.  At this time, Madrid is not a market of interest to us as a great deal of investment is being made by the other operators.  We believe that there are significant opportunities to grow the Spanish domestic and international traffic from our main hub base, Barcelona, and from other Spanish regional airports.

Why did you choose Barcelona as your base? What are the advantages to be there?
Though initially triggered by the progressive withdraw of Iberia from many Barcelona-based routes, we see Barcelona as one of the biggest growth platforms in Spain.  With its own brand new terminal ready to operate in late 2008, we would like to position ourselves as the airline of choice for the region, as well as expand to other bases within Spain and Europe.  
We currently see three types of route opportunities:
- Domestic routes, principally connecting North-South and/or East/West coastal cities
- European and North African connections from Barcelona and some of the other coastal cities
- Mid-haul routes from Barcelona: 3-4 hour flights, likely to be operated at night, which will maximise our aircraft utilisation and open up new routes from our bases

The European Low cost carriers market has reached a certain maturity which leads to its consolidation.  During this transition, what are, for you, the greatest threats to the European Low cost carriers? Fuel rising? Overcapacity? Evolution of airports? Regulation?...
Factors such as fuel costs or the complexity or emissions trading are commonly shared by all players in the industry.  We hope to be active and smart players in dealing with those issues.
However, the largest, perennial risk which our industry has always suffered from is the cyclical nature of the business: airlines do well, buy more aircraft, reach a point in which there overcapacity and are unable to fill them, consolidation and bankruptcies arrive, few players are left, who recover, they begin to do well, and the story repeats itself all over again.  Only one airline in the world has been able to profitability break through these cycles in competitive environments: Southwest.  Since airlines like Ryanair and Southwest were initially modelled after Southwest, and so long as they don´t grow overly fast forever, one should expect them to be survivors.
It appears that we have seen signs of overcapacity in Europe.  Recent M&A activity in the UK (Flybe/BA Connect) and Germany (LTU/DBA/Air Berlin, etc) would lead us to believe that those home markets are starting to reach capacity levels which require a significant slow down of growth.
In Spain, we are not there yet, but we should reach this capacity level in late 2008, as we bring in another 25 aircraft (committed), Vueling places further orders, easyJet and Ryanair grow further in Madrid as well as, potentially, open other bases in Spain.  We are ready for that challenge.  We believe that the resulting marketplace in Spain 2008 onwards will be different and we will be leaders.  Our investors are absolutely convinced that clickair is an excellent platform for European growth and are absolutely adamant, with the support of their large companies, that they make it happen.

What are your expansion projects for the coming year(s)?
We are mostly focused on the first two years of operations.  2007 will be a very high growth year for us.  We are adding 16 aircraft and 500 staff to help us fly over 4,5 m passengers in 45 routes.

Many LCCs look after extra-revenues to offset the low price of their tickets. What are the projects of ClickAir in terms of Extra-revenues?
Ancillary revenues are crucial for us.  We have three different categories of ancillary revenues planned at the moment:
• Next week we will launch our non-air product offer in what will be the fastest ever launch of ancillary products by any airline ever.  By March, we will complete this phase by adding some additional products which will make us the airline in the world with the largest number of travel-related ancillary products.  In this area, we have been careful not just to add services, but to integrate them into our booking process in order to minimise and keystrokes and clicks by our users.
• Flight related ancillaries include a number of on-the-day related services which will provide the customer with further comfort and options at the time of travel.  From preferential boarding to Iberia PLUS frequent flier points, we expect to deliver differentiation and additional revenues.
• New payment methods is our last category of ancillaries.  Traditionally, airlines in Europe, LCC and otherwise, have “kidnapped” users forcing them to use credit or debit cards for purchases made online.  We will not do that – we will unleash a collection of alternative payment methods which will address both ends of the internet-buyer spectrum: the risk adverse, and the frequent Internet shoppers.
We want our travellers to have choices.  Two of our passengers may be sitting next to each other on an aircraft having paid significantly different sums of money for their overall travel experience – we are convinced they will both be satisfied with the services which each has paid for.
Do you believe that consolidation of the market will lead to 2-3 main LCCs in Europe, or do you think there will always be many LCCs on niche markets?
What´s clear is that there won´t be as many LCCs as there are today.  The pressure that easyJet and Ryanair will impose in many carriers throughout the different regions will likely result in some losing the battle.  I believe that there will continue to be gradual consolidation, not only throughout LCCs, but through traditional airlines of small and medium size.

Are you worried about the shortage of pilots and crew hitting LCC market? Will you benefit from staff from Air Madrid?
No. The first add from clickair in the Spanish press in May resulted in 997 CVs received in 3 days.  Since then, we have received as many again.  And yes, we will benefit from the very unfortunate collapse of Air Madrid.  In two days after the official close down of the airline, we interviewed 110 pilots who came to our offices in Barcelona to learn more about clickair.  Our growth plans demand a constant hiring process and yes, we will extend offers to some Air Madrid pilots.

What are the options for ClickAir to transform its business model in order to make more costs savings?
Our October-to-December CASKs place us right above Ryanair and well below Vueling and easyJet – we believe that this is an excellent base to start the operation.  However, our objective is to go significantly further.  We believe that we have some opportunities in cost reduction in several areas, such as further ground handling framework agreements for European operations, and internalizing some tasks which are currently outsourced.  We have a benchmark to lower direct operating costs by a further 20% by 1 April.