Wizz Air tempers talk of Russian subsidiary

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Wizz Air chief executive József Váradi says that plans to launch a domestic Russian subsidiary are "unlikely" to get off the ground this year, citing the slow pace of reform to the country's regulatory landscape.

"We have been contemplating various ways of starting service in that market, but we have not yet made any commitments given the uncertainties around the regulations," he says.

Wizz Air held talks with Sheremetyevo and Vnukovo airports in Moscow in April, with a view to obtaining an air operator's certificate this year and launching operations in summer 2014.

But Váradi says that Russia has yet to take meaningful strides towards deregulation, which will be necessary if domestic carriers are to emulate the pricing models and no-frills products of their European counterparts.

"We have been discussing a number of issues with ministry officials and regulators in Russia," he confirms. "The country is in transition to some extent, but so far we've heard more words than actions.

"Those words would need to be manifested in actions, and they are not there yet."

Váradi's scepticism is shared by Michael O'Leary, chief executive of Wizz Air's larger rival Ryanair. After holding "exploratory" talks with Russian authorities last year, O'Leary said: "Generally speaking, we haven't been too impressed with the deregulation plans".

Russian carrier Aeroflot has advanced further with its plans for a low-cost subsidiary, though it also insists that "several amendments" will be needed to the country's legislative landscape if the venture is to be successful.

There are currently no domestic low-cost carriers in Russia, with Avianova and Sky Express both ceasing operations in October 2011.

Váradi says that Wizz Air is meanwhile looking at establishing a subsidiary in Turkey, though he is "not yet convinced" the timing is right. He adds that regulatory reform in the former Yugoslav republic and Israel is creating further opportunities.