Wizz Air is all set to launch UAE's latest airline on October 1
Wizz Air Abu Dhabi will make its budget presence felt on key European routes
Dubai: The UAE’s latest airline, Wizz Air Abu Dhabi, is on schedule for an October 1 launch… provided all the COVID-19 related restrictions on flights are removed.
That’s according to the CEO of Wizz Air, the Budapest-based budget carrier, which operates the Abu Dhabi joint venture in tandem with ADQ, the Abu Dhabi Government owned investment company.
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If the October 1 plans hold up, Wizz Air Abu Dhabi would join another Abu Dhabi carrier - the joint venture between Etihad and Air Arabia – in launching budget operations. (Air Arabia Abu Dhabi took wings on July 14 with flights connecting Abu Dhabi with Alexandria and Sohag in Egypt.)
“We are the lowest cost producer in the industry and that’s the cost-base that we are putting into Abu Dhabi,” said József Váradi, the CEO. “We are not afraid of competition at all - our business has been tested throughout Europe by various competitors.
“Wizz Air is in the commodities business,” where lower costs translate into wider margins.
Launch plans
It was earlier this year that the Hungarian airline had tied up with ADQ to form UAE’s sixth national carrier. The new carrier, which hopes to tap into the lucrative travel market between the UAE and Europe, has so far announced flights from Abu Dhabi to Georgia, Ukraine, Egypt, Greece, Cyprus and Armenia.
In its home market, Wizz Air flights have been running at around 80 per cent of the pre-COVID-19 capacity - and much higher than the 40 per cent rates seen for other European airlines, Varadi added. It has been adding new flights even as the pandemic forces its rivals to re-think their expansion plans.
“We are reallocating capacity to new markets; we opened 10 new standard operating bases in this period, which will obviously enlarge the footprint of the airline.”
A bigger piece of London
Short-term prospects for the global airline industry will depend on how carriers such as Wizz fare, with its focus on short-haul services and on tight rates. Recently, the airline announced a new base at UK’s Gatwick Airport, its third in the country alongside Luton and Doncaster Sheffield.
Wizz has been angling for more slots from Gatwick for some time, as it maps out a growth strategy that looks far beyond the immediate. According to the CEO, the current passenger numbers on its flights are mostly being driven by essential travel.
Business and leisure travel recovery will take much longer now as “another wave” of restrictions hit the markets, he added.
The prevailing slowdown in the aviation industry will result in “structural winners and structural losers,” said Váradi. “I believe Wizz Air will be a bigger and more impactful business post COVID-19 than prior.”
Apart from being a short-haul carrier with a low-cost strategy, Wizz’s fleet of narrow body aircraft - made up of A320s and A321s - is better suited to the current market and its demand. Investors on the London Stock Exchange, where the airline is listed, seem to have taken note. Since hitting a low in March, shares have surged more than 80 per cent.
India not a priority
But one route Wizz does not have immediate plans for is to India – a lucrative sector for all airlines operating out of the UAE. Right now, Wizz Air is “more focused on the GCC areas and the European market,” said Váradi.
“India is a very attractive, long-term market but we want to make sure that we establish Wizz Air Abu Dhabi properly. Over time we would expand that network and - hopefully - one day we would be touching down in India.”