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Agenda

VUELING CASE:

Business plan extract (2003)- spot the opportunity

Launch, progress (2004-2007), Second phase (2008 and beyond)

SOME THOUGHTS ON ENTREPRENEURSHIP

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WHY AN ENTREPRENEUR??

• Economics degree (ICADE, 1992),

MBA (Harvard, 1998)

• 7 years in 4th generation family

business AMC, in citrus and juices

industry (1992-1996, 2000-2002)

• 1.5 years at McKinsey in California

(1998-1999)

• Leave to go out “on my own” in late

2002

• Fund seed company EVIA with Lazaro

Ros (2003), run vueling (2004-2007)

• Twins!! (late 2007)

• Pondering next project…

Brief bio Carlos Muñoz Factors

• Family tradition (“empresarios”

since 1920s)

• HBS, example from friends

• Youngest brother, need to do

“my own thing”

• Family support- wife is a daring

risk-tolerant American!

• Philosophical- “Make a

difference”, or “parabola de los

talentos”

• Practical- free, creative, fun, and

potentially very profitable

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Vueling, the Barcelona based LCC, is poised to become Spain`s second largest carrier in 2009,

after merging with its main competitor, Clickair1. It will also be Barcelona´s largest airline,

with traffic share of approx. 25% of total. Vueling grew in 4 years to over 6M annual pax, €360

million in revenue, and 24 AC fleet.

Key achievements Lessons learned

• Europe´s second lowest cost based airline (after

Ryanair)2

• Very strong brand recognition: 80/85%

awareness in key BCN/MAD markets; 2nd airline

in Spain with highest unaided advertisement

recall (DYM Institute); largest traffic travel

website in Spain

• Highest operational integrity standards: on-time

performance, dispatch reliability

• Highest customer service rating, direct

consequence of its young, client-oriented culture

• Excellent financial returns for launch investors:

IPO in late `06 for € 450M, with 3,5-7X return

DO´s

• High capitalization

• Efficiency, low-cost focus, new fleet

• Strong, creative advertising and brand

• Top financial/industrial/political partners

• Strong management team

• Results based, variable retribution (no ESOP)

• No Unions

DONT´s

• Underestimate big competitor (Iberia-Clickair)

• Overestimate enthusiasm, underestimate

experience

• Solely focus on web distribution

• Highest growth plans despite environment

Sources: Vueling IPO documents, Alaeo Team analysis

1. Despite the 45% equity position of Iberia, the merger agreement and political support explicitly rely on the “new Vueling” remaining an independent,

Barcelona-based carrier

2. Among publicly quoted carriers

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LEARNING AS YOU GO ALONG (NEW B-PLAN 2009)

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Business and context will change, so be ready…Secret #1 - Its always about People!

• Low pricing and differentiated, closer personal treatment have consistently

been the most valued attributes of vueling

• At peak (October 07) we were 1325 “vuelings”, including 366 cabin crews, 186

pilots, 177 self-handling staff (5 airports), 95 maintenance and 49 call center

agents

• Pilots a key group of its own in airlines

• “vueling together” cultural activities now in place (BBQs, Friday afternoon

drinks, sport events and tournaments etc), originating on “ground-up” initiative of

several volunteers across company.

• Major corporate objective 2007: to be the favorite airline to work in SW

Europe

Sources: vueling team analysis; over 10,000 monthly surveys during four years

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People- management team and staff

Crews

celebrating!

Maiden flight (28th

june 2004) with

leadership team

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Secret #2- have personal “skin in the game”

“fate is at your elbow, make yourself good while life and powerare still yours” (Marcus Aurelius)

A good (if somewhat dramatic) example

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Secret #3 - Having good mentors helps

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Secret #4- Your company is a dream coming true, remember to have fun!

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Secret #5- strong will and perseverance are key, and can move mountains!!“by believing in his dreams, man makes them come true” (Hergé)

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Entrepreneurship is largely about daring to take the step…Borrowing from a recently famous guy, “yes we can”!

In business… … as in life!

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Many Thanks!

Questions & Answers