Wizz Air Sets Sights on 20-Jet Gatwick Base as Rivals Retreat
(Bloomberg) -- Wizz Air Holdings Plc wants to expand its new base at London’s Gatwick airport from just one plane to 20 within a year if it can secure enough takeoff and landing slots.
While the hub will open with a lone Airbus SE A321 jet in October, Budapest-based Wizz sees scope to quickly expand it to employ 800 people, an operation that would support a further 4,000 jobs, Chief Executive Officer Jozsef Varadi said in an interview.
Wizz is seeking to leverage the European airline industry’s lowest cost base to grab market share in London as the coronavirus crisis pushes other carriers to trim their fleets. Varadi said the plan is being frustrated by the suspension during the pandemic of rules that usually force incumbents to relinquish slots the following year if they fail to use 80% of them.
“If airlines are unable to operate slots they should be returned to a pool so that carriers can access them, bring in revenue and contribute to the local economy,” Varadi said.
Wizz Air shares rose as much as 2.3% in London. The stock is down 5.6% this year, the third-best performance in the 28-member Bloomberg World Airlines Index.
Wizz is lobbying authorities including regulators in both the U.K. and the European Union to drop the waiver as flying resumes, Varadi said. He said in a Bloomberg TV interview that Wizz would consider a transaction to obtain them. He added that the carrier seeks to rehire 1,000 staff in the coming months.
The European Commission has said the slot-rule suspension is temporary and aimed at protecting the industry, while also removing the need for airlines to fly empty planes just to keep flying rights. It is set to expire Oct. 24, though the EU has said it’s considering an extension.
“It distorts the market should the slot waiver get extended into the winter period,” Varadi said. “We think it should firmly end at the end of October and the market should decide who gets those slots.”
While the measure applies across Europe, it’s a particular issue at Gatwick because British Airways, Virgin Atlantic Airways Ltd. and Norwegian Air Shuttle ASA all have suspended operations there, leaving a large number of slots at the south London facility in limbo, the CEO said. EasyJet Plc, the biggest airline operator at Gatwick, has resumed service at a slower pace than Wizz.
Gatwick is operating at about 30% of its year-ago capacity, compared with 70% at Luton airport, Wizz’s original U.K. hub north of London, according to Eurocontrol data.
IAG SA’s British Airways, which has used Gatwick mainly for leisure flights, has begun to reinstate some long-haul trips, though European services won’t resume until November at the earliest.
Norwegian’s Gatwick operations remain suspended with just two service running, from Oslo and Copenhagen. The carrier has said long-haul flights may not resume until April.
Virgin Atlantic has closed its entire Gatwick operation while not ruling out a resumption in the future.
Wizz, Europe’s third-biggest discount airline behind Ryanair Holdings Plc and EasyJet, currently bases 10 planes at Luton with a further 20 flying in from other locations. Gatwick could ultimately support an operation of at least that size, Varadi said.
A higher number of planes would be directly based at Gatwick because the bulk of passengers would be Britons making leisure trips to the continent. That contrasts with Luton, where a majority of passengers are flying in to the U.K. to work or visit friends and family.
Virgin CEO Shai Weiss has said his company might lease out its Gatwick slots until the long-haul market in which it specializes revives. Varadi previously ruled out such an arrangement, saying the investment required to build up a new market is too great not to have certainty over access.
Wizz sought to establish itself as a force at Gatwick last year, when it was a contender for slots from failed Thomas Cook Group Plc. Those were bought by EasyJet, while positions vacated by Monarch Airlines in 2017 went to BA owner IAG SA after Wizz had bid.
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