Eastern Europe remains a large, under-exploited market for air travel, and Wizz Air is trying to position itself to be ready, as the region’s economies grow, for their inhabitants to develop a taste for low-cost air travel on the same scale as their western neighbours.
The Hungary-based airline’s latest expansion saw it open bases in Vilnius, Lithuania, and Belgrade, Serbia this April.
Last year, Wizz Air carried 9.75 million passengers from 14 bases in eight countries, who flew aboard 34 A320s on 180 routes to 21 countries, served by 1,300 staff.
As a privately owned company, Wizz Air is not required by the Hungarian authorities to publish any financial information, but insists it had a good year and expects even better in the coming months.
Attila Dankovics, the airline’s head of marketing, sales and communications, says: “We are very happy with 99% of our routes and with having 84% load factors. We are the largest low-cost carrier in Eastern Europe and will soon have 200 routes covering it east to west, and south to north.”
Head of network development, Stijn Vandermoere, sets out the overall future strategy: “Wizz Air is constantly on the lookout for new market opportunities. We have a leading position in Central and Eastern Europe – the highest growth market of Europe – and our aviation professionals have expert knowledge about new and existing markets, with a focus on developing with our airport partners.”
Vandermoere says Wizz Air is evaluating new airports “that provide convenient access to attractive catchment areas and offer facilities that allow efficient operations as well as low costs”.
Vilnius and Belgrade
Two examples of that are Vilnius and Belgrade, each being new bases where “we saw opportunities in both because some other carriers’ offers were not attractive and we felt we could offer superior value products in modern aircraft,” he says.
The Baltic state has migrant workers and also attracts tourists for city breaks. The Vilnius routes will be to London Luton, Doncaster/Sheffield, Cork, Eindhoven, Stockholm Skavsta, Milan Bergamo, Rome Fiumicino and Barcelona.
Belgrade flights are expected to rely more heavily on Serbian migrant workers and will serve Rome Fiumicino, Malmö, Stockholm Skavsta, Eindhoven and Munich Memmingen, supplementing existing services to London Luton and Dortmund.
“Vilnius is more for tourists, but both have significant underlying demand,” Dankovics explains.
“Generally there is a consumer appetite for low-cost flights. If you look at Central and Eastern Europe, flying is under-developed compared with Western Europe, but people are starting to see that air is an affordable option for travellers.”
This works in both directions. “People are used to visiting Western Europe’s capital cities, but in Central and Eastern Europe there are great city break destinations too, so we hope to attract people to fly east to those,” he says.
Opportunities in the east
Speaking of the east, Wizz Air would certainly like to fly to Russia and other parts of the former Soviet Union, but is thwarted by regulatory hurdles, except in Ukraine.
“The regulatory laws are strong and not encouraging, so it would be very difficult,” says Dankovics. “It is a pity, as if it were liberalised there would be many people wanting to travel and it would boost their economies but in general those countries are difficult.”
Wizz Air considered dipping its toe into Georgia last year but dropped the idea because of the destination’s highly seasonal demand.
Its Ukrainian network remains small, with flights from Kiev to Poland, Western Europe and Turkey, and to Dortmund and Venice from Lviv, plus an internal flight from Kiev to Simferopol.
Growing existing routes
Apart from its Baltic and Balkan forays, Wizz Air is looking to grow by increasing capacity on existing routes as demand grows.
Its fleet of 34 aircraft forms part of an order for 132 Airbus 320s to be delivered by 2017, some to replace older aircraft but most of which are intended for expansion.
“We have one of the youngest fleets, which is good because maintenance costs are lower on newer aircraft,” Dankovics says.
He says flights from Budapest and Polish airports to London Luton, Charleroi and Dortmund are now ‘mature’ services with two or three flights a day, and this is the model Wizz Air will try to follow elsewhere.
These began as what he terms ‘ethnic’ routes for migrant workers, which saw few other travellers, “but they now have city break traffic and other tourists on them and people seeing friends and family”.
He says Wizz Air plans to add frequency where it sees more routes coming to maturity.
One example came in December, when it based a fifth aircraft in Bucharest to increase frequencies to 10 mainly tourist destinations in France, Italy, Spain and the UK, and announced new routes to Larnaca and Malaga.
Wizz Air is also developing non-leisure routes, some of which might at first appear curious.
The airline has launched routes from Gdansk to Aarhus and Stavanger. “Those might not sound very obvious, but Aarhus is a big university city and we saw there were many students who were going there by ferry, when we could be cheaper, and Stavanger is Norway’s third city and major centre for the oil industry,” Dankovics says.
Growing Polish market
Longer-term growth is expected to develop as Eastern Europeans’ travel habits become more like those of the continent’s west.
“More Polish people are travelling abroad, such as on the Poznan to Barcelona route, and that trend will grow and open up more destinations,” Dankovics says.
“Our new routes have seen Poles travelling more, up by 23% last year. ‘Ethnic’ traveller numbers may be falling but we are seeing city breaks and tourism travel increasing.”
Wizz Air also hopes to attract more business travellers in the future. “Many of our existing routes are very attractive to business travellers who are wondering why they should spend three times more on a traditional carrier and get the same service,” Dankovics says.
Eastern Europe’s leading LCC will indeed be looking to tap into more business traffic in the future, as well as finding plenty of places to land those 132 Airbuses – and if it could gain access to Russia it seems likely that many would head there.
This article appears in Routes News 2011 Issue 3
