A year of crisis in review: From forfaiting to racking up big profits

Wizz Air: Low fares are always attractive, but in crises, they are crucial

Hungarian-based Wizz Air had a good performance over the past 12 months, when the carrier took the first spot as the biggest low-fare airline by the number of passengers. Wizz Air has also outstripped Tarom after the first six months of 2009 by the number of passengers carried. “Low fares are always attractive, but in hard times they are crucial to attract new clients. Overall, we manage to generate new demand in the market whether it’s crisis or not”, Natasa Kazmer, communication director at Wizz Air told Wall-Street.

The number of routes operated by Wizz Air from and to Romania increased from 14 in September 2008 to 31 in August 2009. The company has also boosted the frequency of its weekly flights: from 122 in September 2008, to 230 in September 2009.

The number of passengers carried, one of the most relevant metrics when evaluating a carrier’s performance, has also increased: “Wizz Air carried over 7 million passengers over the last 12 months in its entire network, 30% more than year-ago period. In Romania, we carried around 1.37 million passengers, 90% more than the same period of last year”, the company said.

Wizz Air’s good performance reflect among other factors, the problems that other carriers had to face over the past 12 months, such as Sky Europe or MyAir that went bankrupt this summer. “In the early stages of the crisis, we said this period will bring the market closer to a more mature level. Some carriers disappeared, while others are struggling to keep head above water, and we are still far from overcoming the process. MyAir and SkyEurope failed to adapt to market conditions”, said the representative of Wizz Air.

Blue Air misses first spot, increases number of passengers

The long-time leader, Blue Air, glided into the second position earlier this year, being edged out by Wizz Air. Nevertheless, the low-cost airline continued to increase the number of passengers carried. Between September 2008 and June 2009, the carrier reported 940,000 passengers.

In first half this year, the airline carried 540,000 passengers, 27% more than first half 2008.

Despite the fact that it accounts only 30% of the total number of passengers Blue Air projected to carry this year (1.7 million), the company keeps its initial forecast.

Between January-June 2009, the company recorded sales of €56 mln, up 35% from €47.7 mln in first half 2008. “The 27% increase can be attributed to the new destinations Blue Air has introduced this year. The company operates 42 routes, and 20 of which have been added this summer”, said Adrian Ionascu

The load factor at Blue Air aircrafts was 75% in this period, 10% less than Wizz Air.

MyAir-SkyEurope partnership didn�t save them from collapse

In October 2008, when the two airlines agreed on a strategic partnership, MyAir and SkyEurope said the deal was aimed at increasing market share, rather than keeping them afloat. But later, in the summer, their financial instability became public.

The first one to throw the towel was MyAir. On July 22, 2009, the Italian Civil Aviation Authority suspended MyAir’s license.

Apart from 15 Italian cities, MyAir, established in 2004, flew to 15 international destinations, Romania included. MyAir was carrying 3,500 passengers weekly to and from Romania.

The Italian-based company carried around 400,000 passengers last year to and from Romania, a similar level as a year earlier. In the first half 2008, the number of passengers fell 34% to 165,000.

MyAir’s partner, failed to withstand any longer. SkyEurope was officially declared bankrupt on September 1 and suspended all its operations on severe financial instability.