Abu Dhabi - Belgrade route on Wizz Air’s radar
Wizz Air’s CEO, Jozsef Varadi, has told EX-YU Aviation News the carrier is considering launching services between Abu Dhabi and Belgrade once it opens its base in the Emirati capital towards the end of the year. “Belgrade is certainly on the radar from Abu Dhabi. I can’t confirm when it will be launched, but we are flying from Budapest to Abu Dhabi for example, as well as from Romania and Bulgaria. So, with that, Serbia would be a natural market with a lot of perspective”, Mr Varadi noted. He shrugged off concerns over direct competition with Etihad Airways on the route. “We are not afraid of competition. As a matter of fact, by creating more competition it is certainly good for consumers because they have more choice”. Wizz Air Abu Dhabi will launch with six aircraft, which is double the amount originally planned. The launch date of the new budget airline is going ahead as scheduled for later this year. “We are looking at a larger scale start versus what we originally contemplated. We would be looking at a six aircraft start in the first six months”, Mr Varadi said.
The budget airline, which will station its third aircraft in the Serbian capital next month and launch ten new routes, is mostly satisfied both with current market conditions and its performance, which may result in further expansion. “Belgrade has done well for us and we try to do better for Belgrade as a result and bring new routes and more capacity to the market. Belgrade has been operational for us through the crisis and consumer uptake has been very strong. Even in very difficult circumstances, consumers have been very loyal to Wizz Air and they appreciate our service and decided to fly with us in these difficult times”, Mr Varadi said.
The CEO noted that state protectionism and support for flag carriers is visible across the continent. “The situation in Serbia is not much different than other countries. If you look at Air France or Lufthansa, those airlines are also subject to state subsidies. I think the world is changing. Clearly, we see governments getting more involved in financing airlines, providing capital and providing liquidity. It’s almost as if we are stepping backwards ten or fifteen years. I think the industry was celebrating that we got rid of the governments, in terms of airline equities in many places. Now they are back in the game. This isn’t great for the industry. This is not promoting efficiency. It is preserving inefficient and loss making businesses. I think a good example of that is here in the country [Serbia] as well”.
Commenting on the current situation on the Serbian market, which has a dominant flag carrier in terms of passenger share, Wizz Air’s CEO noted, “Serbia does accommodate low cost airlines. Maybe it is not as clean as some of the other countries. This is the problem when states get involved with airline equity in their home carriers, they become kind of double-minded, because on one hand it is in the interest of the country to have competition on the market and to offer choices to consumers. But, when you are also an equity holder in your national carrier, you are increasingly combating the market. You want to limit competition and you want to cater for the issues of your national carrier. You are seeing that kind of double mindset in Serbia”. Mr Varadi added, “Having said all that, we are in Serbia, we are bringing a third aircraft to Belgrade, we are going to have 15% - 20% market share in Serbia so this is not that bad. I think if the operational and commercial terms can be preserved as they are today, we can do more in the future. I think we will have to see how rational or irrational governments will be in each of the countries, including Serbia. In certain countries, this kind of government support for their national carriers will result in them contracting capacity, to rationalise the business and become a smaller airline, which may create more room for us to grow. But we will have to see, we are at a very early stage of the process. Certainly, we are keeping an open eye in each country. Putting that aside, we are very excited about Serbia. Serbia has done very well for Wizz Air and we are a very simple business. If we can make more money, we will do more, if we can not make money, we will do less. It’s as simple as that”.
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