Feb. 15 (Bloomberg) -- Spanish startup airline Volotea will begin flights in April with its HQ in Barcelona, where Spanair SA was based until its collapse 2 1/2 weeks ago, after raising about 50 million euros ($65 million) from private-equity firms.
The carrier, which takes its name from the Spanish verb revolotear -- to fly around -- will target smaller cities and make its debut flight from an initial hub in Venice on April 5, Chief Executive Officer Carlos Munoz said today in an interview.
“We’re very optimistic about this initiative as the crisis is making customers more price sensitive,” said Munoz, who will run Volotea with Lazaro Ros, with whom he founded Barcelona-based Vueling Airlines SA. “We’re betting on good service and low prices to grow in a market that’s still untapped.”
Spanair became the first scheduled European carrier to fold since the last recession as the European Union’s highest jobless rate clipped traffic and the Catalonia government said it would no longer supply funds. International Consolidated Airlines Group SA’s Spanish unit, Iberia, is also starting a lower-cost unit on March 25 as it seeks to stem losses on short-haul trips.
Munoz and Ros will own 26 percent of Volotea, with U.S.- based CCMP Capital Advisors holding 49 percent and local buyout firms Axis Participaciones Empresariales and Corpfin Capital 25 percent, according to a briefing given by the men in Madrid.
Volotea will operate 125-seat Boeing Co. 717s from Italy, France and Spain before adding routes elsewhere, with its model resembling that of U.K.-based Flybe Group Plc, Europe’s biggest airline on regional routes with planes of less than 100 seats, they said. An initial public offering is ultimately planned.
Spanish destinations under consideration include Bilbao, La Coruna, Granada and unspecified island locations, Munoz said, and the carrier expects to recruit 20 people from Spanair as it lifts the workforce to 250 from 40, though it’s unlikely to operate from Barcelona’s El Prat airport in the near term.
Munoz and Ros left their executive positions at Vueling, which is almost 46 percent owned by IAG, in 2007, though they remain minority shareholders.
To contact the reporter responsible for this story: Manuel Baigorri in Madrid at email@example.com