As Europe’s economy sags, the low-cost carrier is heading east to sustain its further expansion.Wizz Air CEO Joszef Varadi, speaking at the Routes Europe networking event in Budapest, has said an eastward expansion is vital to the airline.
"The business is designed for growth," he said. "Last year in revenue terms we were growing at a rate of around 20% and we seeing 15-20% growth as something that can be sustained for the foreseeable future, for the next few years." So, amid Europe’s "struggling" situation, Wizz is now looking to new destinations such as Kutaisi in Georgia, Baku in Azerbaijan and Dubai in the UAE to maintain its expansion. "We consider that those markets can still deliver reasonable growth prospects for the business, which we need from a corporate perspective," he said. From an LCC perspective, these markets are also underpenetrated, he added. "If you want to go to a place like Baku in Azerbaijan, you really feel like you get ripped off." But Wizz Air will not be altering its ultra low cost model to enter markets to the east, he added. The carrier remains committed to sticking to a single model of plane, although it could extend its A320 fleet by also operating A321s. While assessing to a joint venture approach for entering Turkey and Russia, Wizz will also stick to its established model in smaller markets such as Bosnia, he said. In Ukraine – where an "old school" bilateral regulatory regime continues to block expansion – he sees encouraging signs of liberalisation. "We have a genuine difficulty to get market access in a way we would have wished to. That situation has changed to some extent after the collapse of some of the domestic carriers." Investment in airports, terminals and runways for the 2012 Euro championship is also helping open the market, he added. "That capacity must be put to work and they need airlines to utilise that investment, so I think that at the moment that’s a primary driver of the changes we are experiencing." Yet he expressed scepticism over the EU’s attempts to close an open skies agreement with Ukraine this year. "It is very difficult to predict. In the longer run, they would need to converge in a way. But the timing is totally unpredictable."Source: routesnews, Piers Evans
Gravity always wins!