The Government comes to the rescue of another airline. The Council of Ministers has authorized the granting of aid of 200 million euros to Volotea through the Solvency Support Fund for Strategic Companies managed by the State Industrial Participation Company (SEPI). The short-haul airline of Catalan origin created in 2011 by the founders of Vueling thus joins other airlines such as Air Europa, Air Nostrum, Wamos Air and Plus Ultra, which have needed public funds to avoid bankruptcy as a result of the effects of the coronavirus pandemic due to the mobility restrictions caused by the pandemic.
This new operation will be channeled entirely through a participative loan, which will be completed with an additional participative loan for 10 million contributed by the shareholders. The company has 1,600 employees and before the pandemic it was the fifth national airline with the highest volume of revenue, only behind Iberia, Vueling, Air Europa and Air Nostrum.
Volotea has focused its strategy on directly connecting small and medium-sized European cities that previously did not have another non-stop direct connection alternative. In 2019, before the pandemic broke out, it achieved revenue of 441 million and transported 7.6 million passengers. In 2020, it closed the year with losses of 122 million euros, which it halved last year with the help of a 150 million loan granted by eight banks and guaranteed by the Official Credit Institute.
According to the Executive, before approving the temporary injection of public funds, an “exhaustive and rigorous” analysis of the economic and legal situation of the airline has been carried out, as well as the impact that the pandemic has had on its business and the feasibility plan presented to access the fund. In addition, the prospects for evolution and the guarantees provided to ensure the repayment of the loan have also been assessed. With the rescue of Volotea, the Government has already approved a total of 23 operations through this fund, endowed with 10,000 million euros, of which just over 2,500 million have been distributed, 25% of the total.
The airline, which planned to go public since 2016, ensures that access to this participating loan will also strengthen the airline in the face of the possible integration agreement between Iberia and Air Europa, in the event that the Competition authorities require an increase of competition in overlapping routes, and grant the slots (permissions for takeoff and landing) and surplus routes.
Ownership of directors and funds
He knows in depth all the sides of the coin.
In capital, the management team and five venture capital funds have coexisted since 2018: the Americans Elysium and HRS Management, and the Spanish Meridia Capital (directed by Javier Faus), Rijn Capital (includes investments by businessman Rafael del Pino) and Rocinante.
The airline has launched its largest historical offer of seats and routes for this 2022 and expects to transport between 9 and 9.5 million passengers this year, approximately 32% more than the record reached in 2019, when it transported 7.6 million . By routes, Volotea will operate 387 routes this year, 20% more than in 2019, of which half are exclusively between medium-sized cities, following its business model.
In Spain, the airline will offer a total of 94 routes, 10 of them open at the beginning of the year and 47 exclusive, with two million seats, 50% more than before the pandemic. So far this year, it has increased its workforce by 9% compared to 2021, reaching 1,600 direct jobs and nearly 8,000 indirect jobs, and has opened a new base in Lille (France) and added six new aircraft to its fleet.
Conviction in France
The news comes on the same day that it was known that Volotea has been sentenced in Nantes, in northwestern France, for several cases of exceeding the legal working time, for which she will have to pay a fine of 247,500 euros. The judges rejected Volotea’s arguments, which she claimed to be unaware that the French regulations were different from the European ones, which allow more working time for pilots and flight personnel.