Wizz Air boss attacks governments’ Covid interventions in aviation industry
He said the desire to save some airlines could lead to more government involvement
The chief executive of low-cost airline Wizz Air has attacked government intrusion he says is designed save preferred airlines at the expense of unfavoured rivals.
Jozsef Varadi said almost every airline in Europe faced uncertainty because of the pandemic but a few were receiving financial help from governments.
“I think this is a protective shield on the underperforming segment of the industry, but once the market starts lifting you will, I think, see the distress flowing through the system,” he said.
Speaking at a meeting of the Capa Centre for Aviation, he gave a grim overview of the picture in Europe.
“Other than probably one or two airlines in Europe, I think everyone is in trouble … the question is, who's going to survive on the basis of state bailout because I doubt most of these airlines will be bailed out by the market.
“Governments seem to be stepping up and protecting their handpicked carriers and they are discriminating those carriers versus the rest of the market.
“So I think it is more down to the governments, who they like, what they want to do, how they are politically motivated when they put … financial resources into the industry.”
He said the desire to save some politically sensitive airlines could lead to increasing governmental involvement.
“The airline industry is becoming a game, the new toy or the world toy for politics and governments. I think the industry was celebrating a few decades ago … but now they are back into the game, even hoarding equities in airlines,” he said.
Mr Varadi said Wizz Air planned to attract post-Covid passengers with fiercely competitive pricing but did not want to entice business fliers.
Much of the travel industry regards business-class passengers as a source of high demand, especially once international flight restrictions are lifted.
But Mr Varadi said such passengers, who pay more but require more space per seat, were a cyclical source of cash that would stop abruptly at the next economic crisis.
He criticised governments for taking control of national airlines and protecting them against market forces.
“We have always assumed that short-term travel is a commodity and lowest-cost experience and basically [the] lowest flyers will be key to the long-term success of the market,” he said.
“The business traveller pays a lot of money in good times and pays nothing in the bad times, if you want to put it that way. So, if there is an economic crisis, the first thing corporates do is cut private budgets.”
“Business travel is great but it's an economic option … it's pretty severe when it comes to an economic downturn.”
He said Wizz Air hoped to establish more destinations and its low-cost model would allow for a quicker recovery.
“We see a lot of doors getting open for us. We are actually seeing a lot more opportunities than capacity … for exploiting those opportunities,” he said.
“I think it is very important that we stay focused on the business we are in. We know how to deliver a very efficient European or short-haul, point-to-point traffic at very low cost by minimising complexities of the execution of the business. And we just need to stick to it.”
Updated: June 9, 2021 09:32 PM