Oasis Hong Kong Airlines Goes Out of Business

On 09APR2008 14:00 Hong Kong time, the first long haul low cost airline has ceased its operations. Oasis Hong Kong has been a story that a large portion of the Airline Industry was following as it was the ice-breaker in the long haul low cost market with its cheap flights between Hong Kong and London Gatwick.

They started their daily flights in October 2006 with the above mentioned route and have later added 6 times weekly service between Hong Kong and Vancouver, Canada. Their fleet has grown to four Boeing 747-400s, two are (were) former Singapore Airlines aircraft and two were formerly operated by All Nippon Airways (ANA). They were providing two cabins: Economy and Business starting from just GBP 358 return fare.

The airline was planning new routes to Europe (Berlin, Cologne/Bonn, Manchaster, Milan), North America (San Francisco and Chicago) and Australia (Melbourne and Sydney) “in the near future” according to their website, which plans will probably be cancelled or at least revisited now. Less than a month ago (19MAR2008) they still had news about new appointments in their sales force, but now it looks like those were too late.

Currently the following statement is on their website (www.oasishongkong.com):

“It is with regret that Oasis Hong Kong Airlines announces that the airline has applied to the Hong Kong Court to appoint a provisional liquidator on 9 April 2008. The Court has appointed Edward Middleton and Patrick Cowley of KPMG as the provisional liquidators, and they have assumed control of the airline with effect from 1400h the same day Hong Kong time.

Our flight operations have been cancelled until further notice. The Provisional Liquidators are liaising with other airlines in order to help customers make alternate travel arrangements as quickly as possible.“

This will probably mean a lot of business for British Airways, Cathay Pacific and Virgin Atlantic, Singapore Airlines and Qantas - who operate most of the flights between Hong Kong and London as well as for Air Canada and Cathay Pacific who fly between Hong Kong and Vancouver.

Looks like after all -in this case- the traditional airlines managed to withstand the promised competition of a low cost long haul operator…

by balint01

Air Asia Airbus in Williams F1 Livery

AirAsia is a sponsor of the Williams F1 team, and has recently extended the 3 year contract. As the 2008 Formula-1 championship was kicked off a week ago in Melbourne, Australia, the second round is arriving to Kuala Lumpur for the coming weekend. To mark the Malaysian Grand Prix and the sponsorship with Williams, AirAsia has painted one of its Airbus A320’s into a special, Williams F1 livery.

The aircraft, whose livery is an exact look-alike of the AT&T Williams racing car, with Williams’ traditional racing colours of blue and white, whilst the ‘nose’ of the aircraft is designed to look like Nico Rosberg’s racing helmet. At the belly of the aircraft you can also find painted Bridgestone tyres in the front and in the aft part as well. The aircraft (new registration number: 9M-AFW) was named ‘Sir Frank Williams’ in tribute to Sir Frank Williams, Team Principal of Williams.

Nico Rosberg said: “It has been incredible to see the AT&T Williams livery on AirAsia’s plane. I’m delighted that the design of my helmet, which I have been racing with all my life, has been used to create a lasting tribute to the team’s partnership with Air Asia.” Kazuki Nakajima has added: “I am very impressed at how well the Williams Toyota FW30’s design has translated to the SFW30 Airbus. I think we would all like to thank AirAsia for this great venture and we are proud to be associated with the Airline of the Year 2007. This is indeed a source of inspiration to both of us going into the Malaysian Grand Prix this weekend.”

A high resolution picture of the plane on airliners.net by Rajesh Changela:

by balint01

No Booking At Ryanair For 3 Days

Ryanair is temporarily closing down both its online and call center booking office between 10 pm on 22 February and 11 pm on 25 February. This painful step is necessary, because the airline migrates to a new booking engine that will comply with EU’s regulation to include all taxes and extra fees into the ticket price.

As AirlineWorld wrote about it earlier, the European Commission decided to be very strict about airlines communiating prices that do not include taxes or other extra fees. Although the initiation may sound good for the customer, there are several circumstances that makes it impossible to intorduce such a business model in the aviation industry. See our earlier article about the topic.

According to Ryanair’s spokesperson, the airline has already missed a January 31 deadline, but got an extension of the deadline until the end of February.

I am personally doubtful if Ryanair will be able to make it – not the upgrade, but to include all taxes and extra fares into the prices – because to fully comply with the regulation the low-cost airline will need to change their policy about the extra charge in checked in baggage and so on. Once the new software will be up and running, we will definately test it.

By Szafi 

First Low-Cost Alliance: JetBlue and Aer Lingus

I have been talking (and thinking) about the future of the low-cost market around the world with many friends as well as colleagues from the airline industry for a few years. I’m happy to see one of the ideas I always mentioned in these conversations actually happening.

The equation is very easy to understand. In the beginning there was one, then there were two and by today there are a large number of low-cost carriers. Some of them have a really strong brand, but let’s face it, the average is only known to a certain region -close to their home base(s)-, where they concentrate all their branding and advertising. But you have to get business somehow, so you -as just one of the zillions of low-cost airlines- will eventually be forced to add some extra service to be different from the rest. You will either offer a frequent flier program, or drinks on board, or sandwiches on board, or guaranteed seating or satellite XM radio or TV or something, that differentiates you from the other low-costs. Maybe you team up with another low-cost to offer a wider network, more destinations and connections, one of the things that still keeps the costs of traditional airlines a little bit higher than of the low-costs. Until now low-costs only offered point-to-point flights, or maybe a single connection in their hub from their own flight, to their own flight. But now this is changing!

    

As ATW News reported recently American JetBlue Airways and Aer Lingus from Ireland unveiled details of their strategic partnership late last week, nearly one year after the “alliance” initially was revealed, proving that it will actually happen. The tie-up will take effect 03APR2008 and will feature a booking engine on the website of Aer Lingus (airline code: EI) that will allow customers to purchase tickets on EI flights to the US and onboard JetBlue services from New York JFK in one transaction. EI will have a transfer desk in the arrivals lobby of JFK’s Terminal 4 where passengers can check in and drop their luggage upon clearing customs. Those flying to Ireland will be able to check their bags through from their initial US departure point when first checking in for a JetBlue flight. “Our partnership with Aer Lingus is a perfect fit with our brand and culture and we are thrilled to extend our network,” JetBlue CEO Dave Barger said. Aer Lingus CEO Dermot Mannion said, “We are proud to be pioneering the model of linking low-fare networks.“

It’s interesting to see this latest step in the transformation of Aer Lingus. The story so far: a state-owned, traditional airline, that has a domestic, low-cost rival named Ryanair… The strategy has been laid a few years ago: EI needs to move towards the low-cost model to be able to compete with Ryanair and escape bankruptcy. Well, they kept their long-haul operations as the flag carrier of Ireland but have really transformed to a low-cost airline on short-haul routes. They used to be a member of the oneworld alliance, which they quit just more than a year ago, due to being too “low-cost-ish” and not fitting the requirements of oneworld anymore. But it looks like they still need the help of other airlines’ networks, and having the experience of a global alliance membership for years, they are now starting their own new alliance, which happens to be in the low-cost market. Just look at any of the currently operating alliances, they all have a strong European and a strong US founding member. This alliance follows the same idea, but in a different market. Let’s see how far they will go with this alliance, whether if it will remain a marketing solution only (linking booking engines, issuing tickets in one transaction (with internal accounting between the two members) and allowing through-check-in of passengers and luggage), or if they will soon link up TrueBlue and The Gold Circle Club to allow frequent flier point/mile collection on each other’s flights and will roll out other joint services? Maybe new, smaller members will be revealed later on? We’ll see.

by balint01 

Low Cost Airline Marketing at AirTran

As I reported earlier in a flight review, I have flown with Atlanta based AirTran about a month ago. Being an airline enthusiast I have kept my eyes open all the way through the booking/boarding/flying experience. I found some of their marketing tools very smart, and some even unrivaled, and have decided to share these impressions and these marketing tricks with you in an article, so here it goes.

A) When arriving to the airport, you may check-in using their ByePass Check-in Kiosks, which offer the possiblity to already purchase drinks for your flight and receive the vouchers, which onboard you can exchange for an alcoholic drink in economy class.
Smart! Less worries for the flight attendants, less change to be carried around, happier passenger who knows while boarding that they will get a nice beer or cocktail, and may sell the drinks easier after all.

B) They offer a few “Rebooking Area“s around the terminal, where you can rebook your flight. The simple, easy to understand text on the huge poster reads: “Enter here to rebook reservation. / Pick up phone. Agent will assist you. / Go to kiosk. Print new boarding pass.“
Smart! Sounds very easy, makes the people believe they can do it (it’s simple), and it’s cost effective, AirTran only has to have a few booking agents in a far away, cheap location answering phones, instead of renting high-price ticketing location at the airport, and hire lots of ticketing agents around all locations. And I saw a few people talking on the phone, so it works, too.

C) Business Class advertisements. Even though AirTran is classified as a low-cost airline, they offer business class on all of their flights. A very cool, again simple worded molino I have seen several times around the terminals/gates reads the following: “Affordable Business Class on every flight. / More room. Free drinks. Less explaining yourself to accounting. / Book at airtran.com.“
I found it’s a very smart idea to point out a step of a business flight, that most airlines don’t care about: expense reporting to accounting! Great way to influence passengers, smart again!

D) At most of the gates, or in between two gates in the waiting area you can find small Coffee Stations, with the following text: “Free coffee. See, we’re always finding ways to save you money. / AirTran.com“
Really smart! Another great tool, people feel that a low-cost airline is actually delivering some extra service: coffee on the ground, before the flight (!) which traditional airlines have never offered outside their business lounges. So they pay less, get more, and AirTran makes sure that all passengers realize this with the text shown above. Small costs, big image building, effective!

E) Programs: Co-branded A+ Visa Card, A+ Rewards program for frequent fliers, and my favorite: AirTran U – specially designed for people between ages 18-22, offering standby flights, therefore selling the seats which otherwise remained unsold, in the last minute before the flight closes (http://www.airtranu.com). They even give half credits if the student is a member of the A+ Rewards program!
Most of the other low-costs simply do not worry about cargo, but AirTran uses the cargo holds of its Boeing 717 and 737 fleet by offering cargo services to its customers.
Smart again, using all capacity as much as possible, selling unsold seats at the last minute (with AirTran U), thus reducing losses.

F) My “favorite,” dumbest marketing tool, which may still work, though: the Gourmet Pretzel packaging. While onboard, you receive a small package of pretzels. The basic situation is the following: you’re bored onboard, finally receive the pretzels and start to open the bag. But then you take a look at the bag: what exactly will I eat? And you find the following text on the top side: “How to eat Gourmet Pretzels on a low fare airline. (see back for complete details).” – Just in case somebody would not turn to the back, they place another message at the bottom: “Book at airtran.com for our lowest fares and no booking fees.” Just so that you know. But let’s see the back of the package for complete details:

In the same style as any other packaging, they placed the following text on the left top side of the back of the packaet:
“Eating Instructions
1. Think about our wonderful low fares at airtran.com as you open packet.
2. Place pretzel in mouth. With each crunch, be reminded of our low fares.
3. As you swallow, remember again just how low the fares are.
4. Repeat until pretzel packet is empty.
5. Keep empty packet to remind yourself to book at airtran.com for our lowest fares and no booking fees.“
Then comes the Nutrition Facts, which are normal.
Pathetic! I was just amazed how an airline can give their name to such a cheesy, baby-like advertising and marketing tool, it’s amazing. But to be honest, I have read it, so maybe other passengers read it as well, and it may work in the end. But I just find it the most dumb marketing text in the airline business ever…

Of course, everywhere they place the “airtran.com” logo, instead of a simple AirTran Airways logo, so you meet with the website address everywhere and you will never forget it (engines on the planes, flight details screen at the gate, any communication material, pretzels, etc.).

And their slogan is: “Go. There’s nothing stopping you.” Not advertising how great their services are, or how high they fly, but urging people to simply “Go.”, or “travel” in other words, which will most probably include a flight. A flight with AirTran. Good general marketing job guys, only those pretzels…!

by balint01

Flight Review: AirTran Airways

 

Route: Atlanta, GA – Dayton, OH – Atlanta, GA
Operating Airlines: AirTran Airways
Travel Date: 30NOV2007 and 02DEC2007

Ticket Purchase

I have bought the ticket through www.airtran.com. The website is very simple, and thus very easy to use, very understandable, clear. It shows you all available fares in a very simple table with all flight details being displayed in small pop-up dialog windows. It is clear which flight is nonstop, and which ones involve a transfer. What is a nice feature that I have not seen before at other airlines’ sites, is that you can have a printer friendly version of the flight search results. So you can print your options and discuss it with somebody or attach it to a business trip plan, etc. Very handy, as mostly you end up with complicated, colorful search results which you can scroll for minutes and may be printed on four pages which then you have to somehow compile to see the actual information. This is a nice added value feature! After selecting your flights you get an overview, that includes the most important fare rules, terms and conditions, check-in information, and the option to add your a+ rewards number (frequent flier program of AirTran) as well to book a trip protection insurance. You also have the option to secure your seat when booking, which is at extra cost, but at an acceptable level I think. I chose 17F for both of my flights for an extra USD 5 for each flight, but could have chosen emergency exit seats with extra leg room for USD 20/flight. You can of course pay by credit card, but you can also use your PayPal account, with BillMeLater or with CheckFree account. In the last step you confirm your payment details and recieve a confirmation mail afterwards.

Offsetting Carbon Emissions 

There is no option to offset your carbon emissions on this website.

Check-In

I wasn’t worried about check-in at all, as I had pre-selected my seat, I knew I will have a window seat, still I received a mail 24 hours before the first flight that check-in is now available. I went ahead and checked in, where I could select another seat. (Actually on the way back I did so, as 17F didn’t have enough legroom due to some wiring at the bottom of the previous seat.) Online check-in at the website is also straight forward, and fast. You have other choices to check-in, such as the Bye-Pass Check-in kiosks at the airport, and you can also drop your luggage off at the sidewalk check-in areas at the Atlanta Airport so you don’t even have to carry your luggage in the terminal building, they take it away from your right where the taxi can drop you off.

1. ATLANTA, GA - DAYTON, OH (FL 702)

Aircraft: Boeing 717-200 (N923AT), relatively new aircraft operated by AirTran Airways – with special sticker: 100th Boeing Delivery
Class: Economy
Punctuality: Flight took off 10 minutes late, arrived at about the right time.
Boarding: Was very efficient, due to the boarding zones -printed on the boarding card- called one by one.
Seats: Comfortable, but not wide enough seats, with small legroom (especially as the bottom of the previous seat had extra wiring)
Flight Attendants: There were 3 of them, they were average looking, all of them seemed friendly.
Meals: Everybody is asked if they want snacks (small pack of pretzels) and a glass of soft drink (Coca-Cola products). For USD 5 you can also get beer, wine, shots or mini-cocktails. In business class these are included in the ticket prize for economy, you may pay onboard, or while checking in on the ByePass Kiosks before your flight, which would give you vouchers.
Entertainment: Free Satellite XM radio with optional headsets (but you can use your own, too) and on-board magazine: Go. Huge SkyMall catalog

2. DAYTON, OH – ATLANTA, GA (FL 414)

Aircraft: Boeing 717-200 (N-963AT), aircraft operated by AirTran Airways
Class: Economy
Punctuality: Flight took off exactly on time, arrived 10 minutes late.
Boarding: Dayton airport was deserted on this Sunday night, no lines to que, just walk-through to the gate. Same zoned boarding used as in Atlanta, due to the low number of people plane was boarded very quickly.
Seats: As my seat was on the left side of the plane where you only have two seats, it felt a little bit more comfortable. I had a bigger guy sitting next to me, but as soon as doors were closed, he moved elsewhere, so we were both more comfortable.
Flight Attendants: There were 3 of them, average.
Meals: Same small pack of pretzels, same soft drinks as on the outbound flight.
Entertainment: Free XM satellite radio at every seat.

Overall Experience

AirTran just does what air travel is basically about: Takes you from point A to point B. Considered as a low-cost, it still offers free drinks on board which is nice, and I also liked the XM satellite radio. Other than that it does nothing more, nothing less. It’s good value for your money with efficient procedures (online booking, online check-in, efficient boarding). I paid USD 248 for my return ticket, and if I will ever visit my American families in Ohio from Atlanta again, I would take this flight once more.

by balint01

Indonesian Boeing Loses Part of Wing Inflight

Many people around the world thought it’s not fair for the US and the EU to introduce and maintain a list of airlines which they ban from their airspace and classify as “not acceptable” basically in terms of flight safety. Besides saving their airspace from possible accidents, they are trying to protect their citizens by providing them with a list of airlines they believe is not safe to fly. The reason is usually the lack of proper technical maintenance at these airlines. ALL air companies of Indonesia have been on these lists since they were introduced, and many people did not like the idea of putting all aviation companies of a certain country on the list. But the recent events in Indonesian Air Transport show the list is (at least very close to being) right!

Let’s see the latest occurance of a flight threataning situation in Indonesia (following two deadly crashes this year) from last night:

A Boeing 737-400 operated by Batavia Air – a low cost airline on the Indonesian market since 2002, operating 36 aircraft including Airbus A319 and A320’s besides the older Boeing 737 family versions (-200, -300 and -400) - took from Jakarta Sukarno-Hatta airport, carrying 144 people (138 passengers and 6 crew). Not so long after take-off (about 15 minutes according to some of the news sources) a piece of the wing has simply fallen off the aircraft. Some reports claim it was a 2 m piece, while others are mentioning an “only” 40cm×50cm part. It doesn’t really matter how big it actually was, the fact that a part of the wing just falls off of an airplane carrying passengers is scary enough in my opinion and should not happen! According to some reports, the separated chunk of the wing landed close to the airport, others say it fell on a residential house. The plane was bound to fly to Pontianak on Borneo island before turning around and safely landing at the airport. Nobody onboard was hurt.

Fortunately this third relatively bigger incident in Indonesian Aviation this year did not claim any lifes, unlike the two crashes earlier in 2007 by Garuda and Adam Air, where a total of 123 casulties were suffered. We hope there will be no more aviation safety news from Indonesia this year, and that the domestic airlines will start taking air safety seriously following such accidents and incidents!

by balint01

Airline Economics – Ticket Prices

We always see fantastic price offers from airlines. But it is never clear if they contain taxes or not? How much is it whith taxes? And what are these taxes anyway? The following article will explain it all to you.

Today I read it in the news, that British Airways will have to pay a penalty of about EUR 20 000 to the Hungarian Competition Committee, because some of their past commercials were misleading for customers. The Committee’s main problem with these commercials were that they did not say taxes were not included in the price. Earlier SkyEurope, Malev, SmartWings, WizzAir and KLM were penalized for the same purpose. Therefore – at least in Hungary – some airlines started to publish their gross prices. However gross prices can be different at the same airline for the same trip bought on the same day. How can it be?

Basic ticket prices

Pricing is a very sophisticated process at airlines. we can say that almost every airline ha s adifferent pricing model. In general we can say that prices can differ:

- by cabin class: economy class tickets are the cheapest, business class ticket prices are higher and first class ticket cost the most

- by the date of departure. The closer we are to the date of departure when buying the ticket, the higher the prices are. It is thought to be the model of low cost airlines, but it is not true. Thishas always been the model of flight ticket pricing.

- by the rules attached. The less flexibility we need, the cheaper the prices are. Cheapest tickets are not refundable, not modifiable, usually a saturday night has to be spent att he destination and the length of the trip may not exceed 2 weeks. If we need a ticket that can be modified later or refunded or has an open segment (for example we do not know the return date) cost more.

(We will explain the reason of this pricing model in a separate article about airline revenue management.)

The basic ticket prices are paid for the airline and in case of a common operated, so called code share flight the operating and the marketing carrier share the money when the ticket is sold by the marketing carrier.

Taxes

Originally taxes were paid only for the airport. The airports publish their handling and other prices in the same reservation systems the airlines use for booking. They publish these prices in their own currency, that is why these amounts differ from day to day, because the currency converting rates change even within days. This minor change is the reason why airlines do not wish to include taxes in the basic price.

It also belongs to the truth that in case of certain currencies this change my reach bigger amounts as airlines publish their prices for 333 days. We could also say – so what? They can change their prices every week if the want to. This is also a possibility, but publishing airline prices is a difficult and expensive procedure as these prices have to be present in all the reservation systems all around the world. Thus it is understandable airlines do not wish to publish gross prices in all markets. However within the EU it is not a risk.

There is a nice trick about taxes airlines happily use. They did not want to increase prices in the same volume as kerozene prices rose in the near past. Therefore they created a so called YQ tax that is basically the fuel surcharge. This way they could keep prices low and include the extra cost into the taxes that are not shown in the comemrcials. Fuel surcharges are not paid to the airports.
“Other fees”

The other fees section of a ticket contains the so called service fee. Service fee came into the picture when airlines stopped paying regular commission to travel agencies a few years ago. (althoguh they still pay super or marketing commission and similar extras to agencies that qualify for these by selling a huge volume of the airline’s tickets) Instead of paying commissions they launched service fees that they also collect and this way they give some space to agencies to collect the missing commission from the clients directly.

At the same time airlines also started to play with this service fee to direct traffic to their more cost efficient sales channels, such as website or call center. It can easily happen that you pay more for the same ticket, same day, same trip in the airline’s airport office than on their website. The most expensive sales channel for an airline is the travel agency (including online agencies), then comes the city or airport office of the airline, then the call center and naturally the cheapest channel is their own website.

So if you would like to get the cheapest price for a certain flight, you should try to book it for yourself on the airline’s own website. Still it is possible that you will find the cheapest price at another website, because when you first look for it on the airline’s website, only a higher class is open, but in the meantime somewhere somebody in the world cacnelled his ticket, a few minutes later a cheaper ticket will be available.

That is the so called revenue management, but we will take a closer look at it in a different post.

By Szafi

New, Self-designed Uniform at Easyjet

easyJet unveiled another industry first today as its cabin crew across Europe stepped out in true style, to reveal their stylish and more formal new self-designed uniform.Over the last 12 years cabin crew and ground staff at easyJet, have always had a very casual look which was purposely designed to inject more fun in to flying and make staff more approachable. The first uniform in 1995 was a simple combination of black jeans and orange polo shirt, with ‘I’m an easy crew member’ embossed across the back, this has gradually smartened over the years with black trousers and orange shirts, but the casual image remained.

As easyJet has grown to become the fourth-largest airline in Europe, carrying over 37 million passengers a year, the airline was keen to update its image to reflect how it had matured as a business, whilst maintaining the fun and approachable attitude.

In true easyJet style, instead of following other airlines and hiring extortionately priced top fashion designers to come up with the latest trends, the airline became the first to give those who have to wear the uniform, its cabin crew, the opportunity to be creative and design something that was suitable to their specific needs.

easyJet’s cabin crew were invited to take part in a competition to design the new uniform that would enable them to feel comfortable and confident at work. Following hundreds of entrees, three made it to a short list and cabin crew then voted for their favourite.

The winning design, ‘Formal and Fabulous’, was the combined effort of three cabin crew – AnnMarie Cuffe based at Liverpool; Joanne Todd and Kurt Wilson both based at Gatwick. With a much smarter, more formal look, the design is made up of a number of different pieces such as orange or white shirts, jackets or waistcoats so crew can create their own combination to express their own style and personality.

Andy Harrison, easyJet’s Chief Executive , commented :

“I’m really proud of our cabin crew for managing the entire process of designing, selecting and producing a new uniform – at no extra cost to the previous design. It really is a great achievement. If our crew feel confident and professional in their uniform it will help them to deliver the best service to our customers – after all, they see more of our customers than anybody else and best embody easyJet’s “low-cost with care and convenience” ethos.

Source: Easyjet.com

By Szafi

SkyEurope And Wizz Air: Different Strategies

  

The Central and Eastern European market of low cost airlines is going through some very interesting times. Let’s not talk about the low-cost airlines who operate to this area, but are of other origin, such as RyanAir, easyJet, Sterling, Germanwings, Norwegian, etc., etc., but focus on those which are based in this region!

There are a number of low-cost airlines operating out of Central and Eastern Europe, some smaller ones like Smartwings (Czech Republic, part of the TravelService group with 2+8 aircraft), Niki (Austria), Centralwings (Poland, part of the LOT group with 5 aircraft – planned 15 by 2010) and Blue Air (Romania, with 4 aircraft). The two bigger ones are SkyEurope and WizzAir, who are following a totally different strategy as revealed in the last few days, even though until recently they were direct competitors of each other.

 SkyEurope is pulling out of its hubs in Hungary and Poland, and will focus purely on Vienna, Prague and Bratislava from the upcoming winter schedule. The goal for them is to stabilize their financial base. They are on the stock exchange, and can not maintain their losses over a long period of time. They plan to station 6 B737-700’s in Vienna, and 4 in Prauge (up from 4 and 2 respectively), which shows the focus is clearly on Vienna and Austria, where the demand is more stable and financially set, compared to the other countries around Central Europe. SkyEurope plans to operate 15 aircraft in Vienna in 2-3 years time. Currently they operate 14 airplanes, and plan to add another 16 Boeing 737 New Generation planes in the coming years. However, it was also in the news last week, that SkyEurope is selling two of its new Boeing 737-700’s, to raise funds for operations in the upcoming winter schedule. The airplanes were due for delivery this month and in November. Giving up their Budapest base, they also plan to sell their airport handling unit at Budapest Ferihegy International airport, for about USD 3.5 million. This will be an interesting sales process, as the only customer of this handling company was SkyEurope, so what is up for sale is basically only the right to carry out gound handling activites at Budapest Ferihegy Airport, and some equipment. We have witnessed a similar situation at loss-making Malev, when assets and rights need to be sold in order to survive the weak winter travel season… This is not a good sign in my opinion, but we’ll see in a year, whether if it has paid off for SkyEurope or not.

 On the other hand, the younger, more dynamic, Hungarian WizzAir announced a major Airbus order today, for 50 new A320 family aircraft!! Wizz Air already flies 13 Airbus A320s and earlier said it plans to maintain a uniform fleet. It had earlier predicted operating 53 aircraft within three to five years. Over the last two years Wizz Air, which flies 70 routes in Europe, ordered 32 Airbus A320s that fly up to 180 passengers. “The new deal increases the total order made by Wizz Air for A320 to 82,” the companies said, while they also agreed on an option to buy 25 additional A320’s by 2016. The 50 new planes are to be delivered in 2011-2014, while the option covers the period 2014-2016. This is the largest order for Airbus in Central and Eastern Europe, and would make Wizz Air one of the largest regional carriers with narrow-body aircraft.

So the two strategies are totally different! One budger airline selling off assets to survive the upcoming winter period, while the other one placing the largest Airbus order in Central and Eastern Europe! While SkyEurope predicts to have 30 aircraft in a few years, Wizz Air will have 32, and will start receiving the 50 new ones announced today! While SkyEurope is backing out from Poland and Hungary, and is focusing on Austria and the Czech Republic, Wizz Air agressively gains markets, and focuses on Poland, Hungary, Romania, and Bulgaria, but keeps out of Austria and the Czech Republic. By only looking at the facts and this latest news, it looks like Wizz Air is winning on the Polish and Hungarian markets in the competition against SkyEurope, but it also looks a little bit like if the Central and Eastern European market of budget airlines has just been split up between the two…

by balint01