The arrival of low-cost and low-fare airlines have certainly changed the way we fly and in markets in Central and Eastern Europe it has been the arrival of Wizz Air that has brought a significant growth in connectivity from the region, an area that historically has had limited sustainable air connections with other parts of the Continent.

The airline was established in September 2003 and launched operations in May 2004 shortly after Hungary and Poland entered the liberal skies of the European Union. In less than ten years it has grown from a single route and just one A320 to now operating a fleet of forty aircraft (including those with its Wizz Air Ukraine business) and a network that covers 85 destinations across Europe and into the Commonwealth of Independent States (CIS).

In the past month the carrier has revealed plans to extend its operations in Georgia and introduce its low-cost formula into the Azerbaijan market, while in an exciting development Wizz Air is to become one of the first passenger airlines to serve the new Dubai World Central Airport with new services from Bucharest, Budapest, Kiev and Sofia from October this year.

When Wizz Air launched operations it was able to take advantage of the success of the business models adopted by some of Europe’s pioneering low-cost ventures. With the added bonus of cheaper labour costs across Central and Eastern Europe it has been able to develop a cost structure much lower than rivals such as easyJet, Norwegian and Vueling, being beaten only by Ryanair, which is its main competitor. While the likes of Malev Hungarian Airlines have failed and Czech Airlines and LOT Polish Airlines restructured and downsized, Wizz Air has been able to expand and is now even the de facto flag carrier for some of the region’s smaller nations.

For chairman and chief executive, József Váradi, the success of the carrier comes down to its simple but effective business model focusing on strong point-to-point markets, serving mainly secondary airports where costs are considerably lower. Váradi understands the industry and understands the dynamics of how the industry has, and continues ,to change. He was chief executive of Malev prior to joining Wizz Air and his knowledge of the local market has certainly helped Wizz Air establish itself as the market leader across the region.

The collapse of Malev in its home Hungarian market last year was a good example of how the industry has adapted and Wizz Air has emerged the stronger for it. And, although the carrier has established operations across almost 30 international markets it has been careful to maintain a ‘Home Town Airline’ feel - across its 16 bases in Central and Eastern Europe (Belgrade, Bucharest, Budapest, Cluj-Napoca, Gdańsk, Katowice, Kiev-Zhuliany, Poznań, Prague, Skopje, Sofia, Târgu Mureş, Timişoara, Vilnius, Warsaw-Modlin and Wrocław) it seeks to hire local staff to support the local market, according to Váradi.

Interestingly, an analysis of Wizz Air’s network in 2012 reveals London Luton Airport as the largest destination across the company’s network by seat capacity. Although not an official base for the carrier the UK capital is served from most of its stations and alongside Dortmund in Germany, Bergamo in Italy and Eindhoven in the Netherlands are key points for traffic in and out of its Central and Eastern European markets. London Luton accounted for 10.6 per cent of Wizz Air’s total network seat capacity last year and the low-cost carrier was actually the second largest operator at the London airport with a 26.3 per cent capacity share. Its routes from Budapest, Katowice and Gdansk were actually the second, sixth and seventh busiest airport pairs in the London Luton network in 2012.

Source: AirportIS
Note: Includes activities of Wizz Air and Wizz Air Ukraine

Last year, Wizz Air carried over 12 million passengers, a year-on-year growth of 12 per cent, a period during which it grew its network from 203 to over 250 routes and extended operations to 29 countries with flights to Georgia, Israel, Slovenia and Switzerland. The average load factor on its almost 80,000 flights reached over 85 per cent, which underlines the popularity of the airline’s low fares formula. The carrier forecasts a growth of around 13 per cent to 13.5 million passengers during the current year as continued fleet development provides a platform for network expansion.

“Despite high jet fuel prices and rising government taxes such as the APD in the UK, Wizz Air continued to stimulate demand for low cost air travel and grew by 12 per cent in 2012, one of the highest growth rates in the European airline industry. Wizz Air positioned itself successfully as consumer champion by coupling great customer service with low fares, making low cost air travel more attractive to comfort conscious travellers and business passengers,” said Váradi.

This summer Wizz Air has added a number of routes around its bases; switched operations in Scotland from Prestwick to Glasgow and in Italy from Forli to Bologna, while it has begun a planned transition of routes in the Italian capital, Rome, from Fiumicino Airport to Ciampino Airport in response to raising costs. The low-cost carrier has also revealed plans to expand into Bosnia Herzegovina with flights to Tuzla from Basel-Mulhouse, Gothenburg and Malmo.

“This is a new chapter in Bosnia Herzegovina’s aviation history,” said Váradi. “By partnering with Tuzla Airport in launching our first low fare route from Bosnia Herzegovina we are confirming Wizz Air’s confidence in the Tuzla region’s ability to attract tourism and generating much needed low cost air traffic. We expect to carry over 60,000 passengers through Tuzla Airport in the first year of operations.”

“The Bosnia and Herzegovina Directorate of Civil Aviation and the Government of Federation of Bosnia and Herzegovina have shown vision by not taxing visitors and travelers to stimulate air traffic and to benefit consumers and the economy. We believe that our strong capacity growth in Bosnia-Herzegovina can be seen as a case study of how not taxing travellers contributes to traffic and job growth, and we look forward to further invest in our low cost structure in the country,” he added

Although Wizz Air continues to explore new markets across Europe, including a likely return to Slovakia later this year, the carrier is also looking further east at the tremendous market opportunities across the CIS and even into parts of the Middle East and North Africa (MENA) region.

In December 2012 it inaugurated flights to Tel Aviv in Israel from Budapest and has now confirmed a new Bucharest connection from June 15, while new connections to the Georgian city of Kutaisi have or will be added from Donetsk, Kharkiv and Warsaw, adding to an original route from Kiev.

“This growth underpins Wizz Air’s commitment to Georgia. Our landmark Warsaw-Kutaisi route brings Georgia closer to the European Union with Poland as a natural springboard to connect between East and West on Wizz Air`s extensive low fares network. Our Georgian routes will boost the economic development of the respective regions, contribute to the rise of tourism and create much needed jobs," said Váradi.

Georgia will be followed by Azerbaijan with the carrier’s ‘Go East’ strategy taking it into one of the fastest growing economies of the region. The airline will introduce a twice weekly link from Budapest to Baku from June 17, 2013, a route it expects to carry around 30,000 passengers in the first year of operations. The Azerbaijan capital is also a cultural, trading and economic centre of the Caspian Sea and Caucasus due to its subtropical climate, historical heritage, favourable location and wealth of natural resources and has been termed ‘the most European city in Asia’.

“Wizz Air is pursuing a ‘Go East’ strategy to stimulate low-cost flying in one of the most dynamically growing regions in the world,” explained Váradi. “The expansion of our Budapest network to these economies reflects on Hungary’s appeal to the ever growing potential of incoming tourism from Eastern markets.”

However, perhaps the most notable of recent announcements from Wizz Air has been its expansion to Dubai and the news that it and fellow low-cost carrier nasair will be the initial tenants when passenger operations commence at Dubai World Central this winter.

Wizz Air will launch four times weekly links to Budapest and Kiev and three times weekly services to Bucharest and Sofia, enhancing air connectivity between the Eastern European capitals and the developing UAE metropolis. Two of the four Wizz Air routes will place it in indirect competition with UAE low-cost carrier flydubai, which currently operates from Dubai International Airport, although it will be the sole carrier to serve two markets.

The Dubai – Kiev city pair is the busiest of the four, with an estimated bi-directional O&D demand of 98,000 passengers in 2012. This route has been served by Ukraine International Airlines since October 2005 and up until last year by fellow Ukrainian operator Aerosvit Airlines, while flydubai introduced its flights in September 2011. These airlines all serve Borispol Airport in Ukraine’s capital city, but Wizz Air has its base at Zhulyany and will hope its unique offering will help attract custom.

Wizz Air will also face competition in the Dubai – Bucharest market, which has been served by flydubai since October 2012 and is also a key route of Romanian national carrier and SkyTeam alliance member Tarom. In 2012, an estimated 47,000 bi-directional O&D passengers travelled on the route, up 21.0 per cent on the previous year. Interestingly, although flydubai only served the route for the final quarter of 2012 it managed to secure a 16 per cent share of the traffic and helped push down average annual fares by 8.4 per cent.

The Budapest and Sofia routes, markets of around 14,000 and 10,000 bi-directional O&D passengers from/to Dubai in 2012 will see Wizz Air as the sole operator. The airline would expect to stimulate these markets with the introduction of direct flights and a low-fare product. Presently, the majority of customers between Budapest and Dubai connect on the flights of Qatar Airways via Doha, while passengers flying between Sofia and Dubai are mainly flying with Turkish Airlines via Istanbul or Austrian Airlines via Vienna.

“I am honoured to announce Wizz Air as a launch customer and first international low-fares airline operating at Dubai World Central. For us this is a hugely significant milestone, with our 10-year European success story now crossing borders far beyond Europe, sharing the benefit of efficient airline operations and low fares with many more international customers,” said Váradi.