SkyEurope And Wizz Air: Different Strategies


SkyEurope B737 at BUD   Wizz Air A320 at BUD

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 Logo 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.

WizzAir 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

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9 Responses to “SkyEurope And Wizz Air: Different Strategies”


  1. 1 Max October 14, 2007 at 11:55 pm

    Hi! I’ve been frequent flier on Turin-Cracow line, and I’m very sorry for SkyEurope “defeating”. Unfortunately Bergamo-Katowice is not suitable to me. Does someone know if Wizzair will be acquiring slots to serve Turin-Caselle to Cracow-Balice?

  2. 2 balint01 October 15, 2007 at 9:49 am

    Dear Max, at the moment we have no information about future route plans of Wizz, but we will present your question directly to Wizzair and will inform you here as a reply about anything we may find out from them!

  3. 3 richard December 6, 2007 at 4:05 pm

    A very interesting article indeed. Well I am an Englishman living in Hungary and frequently fly on Wizzair and other budget airlines. I have to say from day one Wizzair by far was the better airline that Sky Europe flying modern new planes, whereas Sky Europe had a fleet of older Boeing 737-300,500 with a reputation of being worn out and unreliable. Most there planes where ex Easyjet. Whereas Wizzair delivered comfort, stylish design, many of Sky Europes planes had the old worn out Easyjet interior not even changed. They have modern aircraft today, but operating such aircraft to start with gives me a lasting opinion of them I will not forgive….

  4. 4 balint01 December 6, 2007 at 6:19 pm

    Thanks Richard for sharing your opinion! Probably SkyEurope knew this, too, that’s why didn’t start with the worn-out planes on the Vienna market. Now that they have the brand new, factory delivered Boeing aircraft, they feel they can serve the low cost – but most probably still high standard – market of Vienna and Austria in general. We’ll see if they survive there or not, but most Austrians will get a different first (and lasting) impression than what you got a few years ago with the old planes.

  5. 5 balint01 March 20, 2008 at 11:25 am

    Well, it has not been a year yet, but SkyEurope still seems to be in a hard situation as reported by ATW News on 20MAR2008:

    “SkyEurope Airlines will cut several routes from its summer schedule as it looks to stem its losses, starting with its thrice-daily Vienna-Innsbruck. CEO Jason Bitter told the Austrian Press Agency that the airline will become “more aggressive in avoiding economic risks” and that unprofitable routes will be cut quicker than before.”

  6. 6 Ronald September 4, 2008 at 12:55 am

    Hi all!

    Very interesting article, but one thing that COULD be the main reason of SkyEurope pulling out of Poland is the fact that LOT there is ‘king of the castle’. I fly very regularly to Poland, in the beginning with SkyEurope. At first, they flew to Warsaw, but this airport was very unfriendly for passengers. After sabout a year or so the ‘low cost’ flyers were sent to the infamous Etudia terminal, which was a lot of nothing. LOT started their Central Wings, which mainly seems to be a ‘paper company’ with lots of promises but in the end little to offer. Many airlines dissappeared from Warsaw the last couple of years, because the climate is very unfriendly. Add the corruption involved around building the new part of the airport there and we see a little different picture arise.

    When SkyEurope started flying to Krakow, it didn’t take long before Central Wings also woke up. Competition is of course ok, but it should be fair competition and not competition based on old rights and historical connections with who knows.

    For the record: I am not Polish but I saw what was happening from the beginning to the end what was happening with SkyEurope in Poland. I keep my fingers crossed that WizzAir will be able to keep its position, because else there will not be much left in matter of reasonable priced flights from Germany to Poland, for example. Flying in Poland seems to be a risky business, however times are changing. Wizzair profits from many new airfields, mainly converted ex-airforce bases, while SkyEurope was not in this luxuary circumstances some years ago. Warsaw is not the place to be anymore if you need to do business in Poland or visit this -for the rest- great country. Maybe SkyEurope unfortunately was just a bit too early to fly to Poland and other ex-Eastern Europe countries. But they broke the ice for others to come.

    Regards,

    Ronald.

  7. 7 balint01 September 4, 2008 at 10:05 am

    Hi Ronald,

    Thanks for your comment! Just in recent days, LOT has announced that they are cancelling the low-cost operations of their Centralwings subsidiary from the end of September, and will use those aircraft for charter operations. This now really means Wizzair as the only one competitor to LOT basically.

    On the other hand, SkyEurope in recent news seems like it may go out of business very soon. According to O’Leary from Ryanair, they only have weeks left in the business, but to be more realistic, their shareprices are hitting bottom lows, and their network keeps shrinking… They indeed may have been too early in the business… Or simply they are the first ones to have deadlines on their lones which they can not pay back with the current level of oil prices and reduced airline business due to a slowing global economy. We’ll see.

    balint01


  1. 1 SkyEurope Airlines Moves Vienna Flights To Bratislava – Temporarily? « Airline world Trackback on August 19, 2009 at 4:49 pm
  2. 2 Flight Tickets Chennai » SkyEurope Airlines Moves Vienna Flights To Bratislava – Temporarily? Trackback on November 4, 2009 at 12:01 pm

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