Budget airline WIZZ Air plans to launch in May

CEO Jozsef Varadi said central Europe, where eight countries will join the European Union in 10 days' time, lags behind the EU with only three to four percent of the population flying regularly, compared with around 25 percent in the West.

"We've secured over six million euros for the company, and we're just ahead of raising a further several tens of millions of euros," Varadi, former head of Hungarian national airline Malev, told Reuters in an interview.

Budget airlines are mushrooming in central Europe, a region of 75 million people, where treaties protecting national carriers must be scrapped after these countries join the EU on May 1.

"In central and eastern Europe most of the traffic (for low cost airlines) will come from passengers who have never travelled by air before," Varadi said. "We will target people who can afford to travel but have not afforded to fly so far."

WIZZ Air will take off on May 19 from the southern Polish city of Katowice, initially flying to Budapest, London's Luton airport, Rome, Milan, Venice and Berlin.

At a yet unspecified time, but soon after May, it will also fly from Budapest to the biggest urban areas as well as seasonal summer and winter resort destinations.

Unlike competitors, who prefer a gradual expansion in central Europe, WIZZ has opted for a sweeping start.

"Today the competition is so sharp that it does not tolerate a strategy of step-by-step expansion," Varadi said.

WIZZ plans to price its tickets in the middle of the low-cost market, with an average of 50 euros for a one-way trip, Varadi said.

Their price will be above Ryanair's 40-45 euros, but below EasyJet's 65 euros, he said. Ryanair is not present in Hungary, while EasyJet's first flight there is expected in May.

Varadi said earlier it had forecast initial annual passenger traffic of up to two million, compared to Malev's 2.3 million last year, and expected to break even in 2004.

The airline's total financing needs will reach up to 50 million euros, to be raised from international institutional investors whom Varadi declined to name.

WIZZ Air has hired an international staff of around 150 so far from around nine countries, has secured the lease of nine Airbus A320 planes and has contracted Lufthansa Technik for maintenance.



Source: Reuters