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'Big Bang' to be followed by a rush of Wizz Air

Wizz Air is on course to make its maiden flight from Katowice Airport in ten weeks' time, immediately after the May 1 'Big Bang' enlargement of the EU from fifteen to twenty-five states.

"Two of those countries, Poland and Hungary, are at the heart of Wizz Air's plans to open up a network of routes across Europe," says Wizz Air CEO Jozsef Varadi, "We will operate on a multi-base principle that will enable us to provide services to millions of customers in the region."

Jozsef Varadi left Malev after serving as the Hungarian flag carrier's CEO. After researching the business models of established low-fare leaders such as Ryanair in Europe and JetBlue in the United States, Varadi has chosen Katowice and Budapest as his first bases.

In a relatively ambitious plan for an unknown start-up low-budget airline, Wizz Air will start operations with a burst of activity. Ten European destinations will be offered, and Wizz Air has completed lease agreements for nine Airbus A320 aircraft, each with 180 seats.

The company has a target of increasing its workforce from 60 to 250 within two years. During the same period, Wizz Air plans to create a fleet of twenty aircraft, which would make it Central Europe's largest operator. This will serve to seriously compete with regional leaders such as LOT and CSA Czech Airlines, while threatening smaller carriers such as Air Polonia, GetJet and White Eagle. "A fleet of this size will enable us to take commercial advantage of the under-developed market for low-fare air travel to and from Central and Eastern Europe," says Varadi. Our network will branch out from our initial bases in Poland and Hungary, opening up routes for many millions of travelers to and from popular European destinations."

However, indicating a move toward cooperation in the sector, a European Low Fares Airline Association (ELFAA) was founded at the end of last month, of which Wizz Air became a member. The objective of this organization is to ensure that low operating costs can be maintained so that a greater number of low fares are available to the traveler. Many established low-cost airlines have shied away from Central Europe because of expensive and inefficient airports.

But Katowice is a new development which, as a late entrant, is able to modify the practices of its competitors, tailoring its services to the needs of the new generation of airlines. Indeed, the new airport will be home to the entire European fleet of the new Wizz airline, which will be serviced and maintained there, raising the profile of Poland's already promising skill base of aircraft technicians, currently bidding for major US investments. With the tourist destination of Krakow an hour away, local authorities look forward to attracting foreign visitors. "Soon numerous shops, car parks, restaurants and hotels will crop up," says Marek Mutke, Chairman of the Board of the Upper Silesian Aviation Group.

European cities on the list of Wizz Air's destinations include Brussels Charleroi airport. "Low-cost travel between Poland and Belgium should undoubtedly have an economic impact and give a boost to our trade relations, especially at the level of SMEs," says Eric De Clercq, the Economic and Trade Commissioner in Warsaw for the Walloon Region.

"It's a great opportunity for our two peoples to get to know each other better and put Poland on the map as an easily reachable and attractive tourist destination for Belgians in the coming months," he adds.

Earlier this month, Wizz Air began its final phase negotiations to secure up to zl.231 million ($60m) of venture capital funding from American and European institutional investors. The board of directors includes Lynn Wotherspoon, former COO of Buzz (the former low cost arm of KLM), and high-ranking employees of regional branches of Procter & Gamble and The World Bank.

"Of all the countries entering the EU, Poland is the largest market and has the most potential in terms of business development," Varadi says. Internet usage, a mainstay of low-fare airlines, is relatively low in Poland and Hungary. Varadi has indicated that this could necessitate cooperation with travel agents, a cardinal sin among low-cost purists such as Ryanair.

(WBJ 23.ii.04)

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