How did the bankruptcy of AeroSvit affect the market? Was the Wizz Air Ukraine airline company able to take advantage of the new opportunities?
When a major player leaves a market, the balance of power in it changes. In January, we were asking what would happen next, what steps the government would take, and what the players on the market would do. Of course, the bankruptcy of AeroSvit also affected us. We saw a large number of routes that were not being served, and we expressed our willingness to operate on these routes. Some of them have been allocated to Wizz Air Ukraine and other carriers over the past five or six months. Therefore, I see some redistribution of the market but at the same time, we are seeing some negative things: the most attractive routes on which only one major Ukrainian airline company operated has gone to another major company. Before the departure of AeroSvit, we had a monopoly of two aviation groups, now we have the monopoly of one. However, despite this, we must give credit to the aviation authorities, who nevertheless allocated these routes not only to the abovementioned company, but also to other carriers. I still expect Wizz Air Ukraine and the other players to receive more lines from the former network of AeroSvit.
Wizz Air Ukraine filed about 20 applications for routes with the aviation authorities. Which of them were approved?
After the events of January, we applied for 18 routes. Out of these, we gained the right to fly from Kiev to Moscow, St. Petersburg, Vilnius, Dubai, and Thessaloniki. There are also flights from Lviv and Donetsk. We are also seeking a number of destinations, and we are hoping to get them soon. In the portfolio of AeroSvit, 10-14 lines still need to be filled.
When will flights to Thessaloniki begin?
It depends on when we will have enough flights to fill a fourth airplane. We currently have three aircraft that are based at the Zhulyany airport, and we planned to start operating the fourth Airbus 320 on the new routes in October. However, we will not be able to fill it because we have not received all the necessary allocations. Therefore, we are still waiting for the decisions of the aviation authorities on a number of applications, and we will be able to speak about launching flights to new destinations and additional capacity after that. It is impossible to state a specific date now, especially considering the fact that when an airline company is launching a new flight it requires at least four - and preferably six - months to start sales and fill airplane cabins.
At what stage is the process of coordination of the launch of operations on the Kiev-Moscow route with Rosaviatsiya?
Under Russian law, it is necessary to submit a large number of documents, which we have done. We are now waiting for a response from the Russian aviation authorities. Each country has its own legal characteristics, but it should not be forgotten that the Russian market is on the verge of major changes: a large number of foreign carriers are seeking to enter the market and the authorities need to respond somehow. It is always difficult to change old rules that have applied for many years and protect only the interests of certain airline companies. There are difficulties in Ukraine and Russia, and these difficulties existed in Central and Eastern Europe before their accession to the European Union.
Is the situation involving Kiev-St. Petersburg flights similar to the one involving Moscow?
Yes, we have received the approval of the Ukrainian aviation authorities and we are waiting for the decision of the Russians.
The company recently announced that it was suspending flights on the Kiev-Simferopol route. Why is that, and when will operations on this route possibly resume? Is an alternative - for example, launch of flights to Sevastopol (Belbek) - possible?
Firstly, I want to say that the domestic market is not a priority for Wizz Air Ukraine. The sizes of our aircraft are too large for performance of flights within Ukraine. Therefore, we are concentrating our efforts on international routes. However, since Kiev-Simferopol flights are in demand, we performed them in the summer. However, the cost of performing these flights has increased this year. In addition to this, as I said, we have too few passengers and destinations for four vessels but enough for three. Therefore, we had to revise our summer timetable and change our priorities slightly. Together with the reduction of the frequency of flights to a number of destinations, we decided to suspend flights on the Crimean route. Of course, we cannot rule out the possibility of resuming them, but it is not on the list of our priorities. We can return to the issue of Crimean flights when we have additional capacity, but only next summer.
In the portfolio of AeroSvit, 10-14 lines still need to be filled
We also negotiated with Sevastopol, but as far as I know, they are not ready to cooperate with us, primarily because of the terminal. Perhaps something has changed, but I have not yet received offers. In addition, services there are not as cheap as they should be at a secondary Crimean airport.
What kind of passenger traffic does the company expect on a Kiev-Vilnius flight? Classic carriers have stated that this route is interesting only from the viewpoint of a transit passenger, and UTair Ukraine has stopped flights due to lack of direct passenger traffic
We know the market well enough because Vilnius is one of the bases for the Wizz Air group, and demand will come not only from transit passengers. We should not forget that the Baltic countries were also part of the Soviet Union. Therefore, families and businesses will use our services, and this has been confirmed by sales results. Yes, this is not the most in-demand route, but we do not see particular problems with direct traffic. The same applies to Sofia. Moreover, as far as we know, customers often switch from one of our flights to another, but, of course, using two different tickets are used.
What is the load in the Georgian direction? Classic carriers have also stated that Georgia is interesting only from the viewpoint of transit passengers, and UTair Ukraine and Airzena have already stopped flying between Georgia and Ukraine
I have a completely different experience. I would like to remind you that we have three flights to Georgia: Kiev-Kutaisi, Kharkov-Kutaisi, and Donetsk-Kutaisi. Each of them is sufficiently filled. Of course, there is one difference between us and other carriers: they fly to Tbilisi, which is a very expensive airport. It is one of the most expensive airports in the region. Until we found a suitable option in terms of cost, we did not launch flights to Georgia despite the absence of restrictions on the country’s aviation market. The Kutaisi airport is very suitably located from our point of view. It is located halfway to the capital and halfway to the sea and resorts, for example, Batumi. Perhaps it is not so suitable for those who are focused on business passengers, but we have a slightly different segment of the market. If things were bad, we would not have increased the number of flights from Kiev and we would not have launched flights to Kutaisi from the regions.
Low-cost airlines have said that it is difficult to offer very low prices in Ukraine because airports receive the bulk of the revenues from fees and services, which are regulated by the government. Has the Infrastructure Ministry’s order that allows airport managers to grant discounts to carriers begun applying in practice? How much has the situation changed since its adoption?
The Lviv and Donetsk airports now offer discounts when new routes are launched. This is probably because they are striving to attract new passengers and fill new terminals. I expect other airports to follow this path.
The length of the runway at the Zhulyany airport does now allow aircraft of the types Boeing 737-800 and Airbus 320 to carry full loads and full tanks of fuel. How will this affect the Kiev-Dubai flights that the company will launch in the fall? Do you see a return to the Boryspil airport?
We are holding talks with many airports, but our base in Ukraine is currently Zhulyany. The runway there is sufficient for our flights, although it is true that certain limitations exist. We will need to take fewer passengers on board, thus allowing is to avoid problems during take-offs and landing. We are pleased with our cooperation with Zhulyany, possibly because of the involvement of private capital in the management of the airport. They respond to our requests and they are open to dialogue and joint solution of problems. There was no such thing at Boryspil. We are in contact with many airports in Ukraine, among them the Boryspil airport, and we will be happy to evaluate them as soon new conditions appear there.
How have the new rules for allocating routes to carriers affected the company's operations?
The main changes that we have faced involve, among other things, the issuance of permits for performance of domestic flights, which did not exist previously. Previously, we could receive confirmation of slots at airports if we were ready and start operations. Now, we have to obtain permission to fly. This also applies to charter flights, which are operated over a long period, for example, over a season. In addition, the right to perform flights to certain destinations is granted for a limited number of years. The Ministry of Infrastructure says that this approach applies to routes with limited numbers of carriers, such as Italy and German regional routes.