SkyEurope’s Mandl looks eastwards

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When Christian Mandl and co-founder Alain Skowronek launched central European low-cost carrier SkyEurope they were not to know that just five days later the events of 9/11 would send into freefall the very industry they were entering

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Operations started in February 2002, the airline survived the turbulence and four years on it was in good enough shape to become central Europe’s only publicly listed carrier. An IPO in September 2005 raised €60 million ($77 million) capital for the carrier to continue its expansion. Shareholders now include financial management and advisory company Merrill Lynch.

Last year SkyEurope carried 1.85 million passengers on revenues of $143.22 million.

The carrier now finds itself as the de facto national carrier of Slovakia since its split from the Czech Republic, although Mandl explains that it operates out of five bases in the region: Bratislava – which benefits from its location just 50km from Vienna, Budapest, Warsaw, Krakow and Prague.

“We employ some 900 people locally, representing more than 20 nationalities,” he adds, including a supply of French flight crew provided by the demise of failed French carriers such as regional Air Littoral.

SkyEurope operates 16 Boeing 737s and has 32 on order, of which 10 will be delivered this year. “Boeing were eager to make a deal,” Mandl says, as the manufacturer had recently lost out on two sizeable aircraft orders to Airbus when Air Berlin and AirAsia opted for the A320 rather than the 737.

Despite its position as a low-cost carrier, SkyEurope offers some frills to differentiate itself from competitors. “We have leather seats and have recently signed a deal with Italian coffee company Illy to provide real espressos and cappuccinos in flight,” says Mandl.

He is keen to increase frequencies on existing SkyEurope routes to achieve economies of scale in hotspots. For example, the carrier has signed a corporate travel deal with French car manufacturers to transport staff to and from factories that are springing up in eastern Europe.

“We are not interested in flights over three hours,” he insists. “With flights of two hours duration we can achieve three or four rotations a day.” The carrier is currently focusing on two strategic initiatives: “Go East” is one, whereby the focus is on east-east connections that avoid going head to head with competitors such as easyJet and Ryanair. “Destinations in Russia and the Ukraine hold particular potential,” says Mandl. The other is the “Winter Offensive” to ski resorts such as Innsbruck and Salzburg in Austria.

Mandl is a fan of the low-cost airport concept, which can offer a no-frills infrastructure, with no bridges or buses to get passengers to the aircraft; short turnarounds and efficient passenger handling. “We were able to set up our entire operation at Budapest’s low-cost terminal 1 in less than four weeks,” he boasts.

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