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EDITORIAL
T
he end of 2006 has been paradoxical. On one hand, LCCshave realized great profits, but on the other hand, they havenever been so much criticized. One after another, LCCslaunch their IPO ( 
Air Berlin, Vueling 
…) or plan to do so in a nearfuture ( 
Centralwings 
(p. 10)…). At the same time, consolidation of the market has reached a higher step. Some LCCs succeeded to ac-quire other airline carriers like
Air Berlin 
in Germany (p. 5) or
FlyBe 
 with
BA Connect 
, but others didn’t: like
Ryanair 
and
Aer Lingus 
(p.9). Low-cost carriers are also exploring new markets and expand inEurope to widen current frontiers (p. 2, 7 & 11).Meanwhile, LCCs have never been under so many attacks.
Jet2
, likeother LCCs before, has been caught for misleading advertising by theAdvertising watchdog (p. 8).
easyJet 
’s offices in Paris’ Orly airporthave been raided by French police forces et social security inspec-tors, because the carrier is charged with “concealed work” and “im-peding staff representation bodies” (p. 5).
Ryanair 
is the EuropeanLCC which has faced the most opposition this last month. During the takeover bid for
Aer Lingus 
,
Ryanair 
faced allied opponents(Irish government, European commission,
Aer Lingus 
executivesand employees…) and finally failed (p. 9).
Ryanair 
is largely critici-zed over the web by the website Ryanaircampaign.org, and the car-rier has lost the battle to win the control over this domain name (p.10). More disturbing for the airline are the recent revelations aboutsubsidies received from public taxes and about secret agreementssigned between airports and
Ryanair 
(p. 9). The disclosures of thesedeals with airports could really damage
Ryanair 
’s system to earnessential ancillary money…
Highlights in this Issue
The Ten influential: Who’s Who
 p. 4 
Air Berlin Goes Shopping, But Without TUI
 p. 5 
LCCs In the Nordic Sky...
 p. 7 
End of 2006: Hard Air Pockets for Ryanair
 p. 10
Germanwings Expansion to Eastern Europe
 p. 11 
Air Scoop - January 2007
www.air-scoop.com
The Low Cost Carriers Analysis Newsletter 
Air Scoop Special Search Engine
Air Scoop Team 
has created a search enginededicated to LCCs market. We have selectedthe best of websites news about aviation, andespecially low cost carriers in Europe. Thenyou will find all the information that you arelooking for through our search engine.Use it, it’s free!
Air Scoop - In the AirAIR SCOOP ANNOUNCEMENTS
 
Air Baltic: A New Route toRoma?
The Air Scoop Team Wishes you a Great New Year 2007!
MOL Words of the Month!
“
A lot of lies and misinformation has been  put about by eco nuts on the back of a re-  port by an idiot economist.
”,Michael O’Leary referring to the report of SirNicholas Stern, World Bank chief economist,on the economies of climate change.“
Minister Pearson and other equally foolish  politicians actually tackled the real cause of climate change, which is road transport and power generation 
”, Michael O’Leary re-ferring to Ian Pearson, UK Environment Mi-nister, who attacked Ryanair on environmentissues.
 
BIRD’S EYE VIEW
Air Scoop - January 2007
www.air-scoop.com
2
Exclusive Interview of József Váradi(CEO of Wizz Air)
József Váradi 
CEO of Wizz Air
Could you please present Wizz Air to our readers? What are your speci-  ficities compared to other European LCCs? What do you do better than your competitors? Wizz Air 
is Central & Eastern Euro-pe’s largest low fare – low cost airlineby number of carried passengers. Theairline was launched to coincide withthe EU accession of 10 new countriesin May 2004. The first flight took off from Poland, the largest of these newEU countries on 19 May. Today theairline operates flights from Poland,Hungary, Bulgaria, Croatia, Sloveniaand Romania to many destinationsacross Europe.
Wizz Air 
flies a young fleet of 180 seater Airbus A320 air-crafts. With 32 new A320 aircrafts onorder plus 12 options
Wizz Air 
’s fleetshould consist of up to 53 aircrafts by2012.
Wizz Air 
has carried close to 5million passengers since its start of operations in May 2004.
Wizz Air 
’s key success factor is itscost structure, which is the most ef-ficient in the CEE region.
Wizz Air 
’slowest cost is the key to its long termsuccess.
You recently announced an overall expansion of Wizz Air in Poland.easyJet and Ryanair have also an- nounced the launch of new routes to polish market. How do you plan to manage such competition in this market? What are your advantages on this market? Wizz Air 
has already proven itself asthe leading low cost airline in all itscountries of operation. According tothe latest report of the Polish CivilAviation Authorities published on 19October 2006,
Wizz Air 
strengthe-ned its market position as the largestlow cost carrier and the second largestairline in Poland well ahead of com-petitors, taking 15% of the total mar-ket (4 percentage point up from lastyear’s 11 %).
Wizz Air 
reached 28%share of the low cost sector transla-ting into 8% share of the total marketin Hungary. The share of 
Wizz Air 
inBulgaria, the airline’s new market, hasreached 52% just 6 months after itslaunch in the country.As I mentioned the key focus is onkeeping the costs as low as possibleand offering low fares continuously.The market has been very competi-tive and has shown signs of consoli-dation already, as some competitorshad to withdraw or downsize theiroperations. The key, again, will bethe most efficient cost structure.
“Islanders” (Ryanair and easyJet)need to find new attractive destina- tions to maintain their growth; The- refore Central Europe represents an important market for these LCCs.Who are your most dangerous com-  petitors: ‘Centralers’ (SkyEurope,CentralWings, Estonian Airlines…)or ‘Islanders’: Now? In near future? 
The competition is with other meansof transportation as well as within theairline industry itself. Low costs willbe the key to succeed, as it is vitalto both drive the market growth andsuccessfully compete on the market.Our experience has proven us right:low costs always win. This made usthe market leader in our base coun-tries already and this will keep us inthe top league of European marketplayers.The European Low cost carriersmarket has reached a certain matu-rity which leads to its consolidation.During this transition, what are, foryou, the greatest threats to the Euro-pean Low cost carriers? Fuel rising?Overcapacity? Evolution of airports?Regulation?...There are a number of factors whichrepresent a challenge to further de-velopment and need to be addressedin efficient way. Fuel price is oneof them, however as it concerns all,we have a competitive advantage of flying large (180 seater), very efficient(A320) and new aircraft, while ourcompetitors mostly fly smaller equip-ment losing on the economics of unitcost. Airport infrastructure needs tobe developed in the region, especial-ly from a technical perspective. Andnew market entries are still limitedby regulatory specificity of individualnon-EU countries. However, newmarkets open, but the competitivenature of the business remains withlocal challenges to overcome.
Many LCCs look after extra-re- venues to offset the low price of their tickets. What are the projects of Wizz Air in terms of Extra-reve- nues? 
Ancillary revenue is an area with alot of potential. There are a numberof services already available on wiz-zair.com, such as car rental, accom-modation, insurance, travel packages,week-end breaks, tickets, etc. Thiscircle will be further enlarged as wellas products which are on sale onboard. There are also other servicesand products on consideration to belaunched in the near future, whichare sources of non-ticket revenue.
Do you believe that consolidation of the market will lead to 2-3 main LCCs in Europe, or do you think there will always be many LCCs on niche markets? 
 
BIRD’S EYE VIEW
Air Scoop - January 2007
www.air-scoop.com
3
Find all our exclusive interviews of topLCCs managers on our website
www.air-scoop.com 
Already available online:
As I mentioned the market already shows signs of con-solidation. There is place only for efficient airlines. Themarket will be dominated by 4-5 big players with somesmall marginal players to take the rest.
Are you worried about the shortage of pilots and crew hitting LCC market? 
No.
What are the options for Wizz Air to transform its busi- ness model in order to make more costs savings? Wizz Air 
’s business model does not require transformationas it has been designed to be ultra-low cost from day one.Efficient, new Airbus A320; over 13 hours aircraft utiliza-tion; use of secondary/regional airports; 100% internet sa-les; highly efficient organization (7500 pax/employee/year)and best practices result in the lowest costs. And this to-gether with the continuous benchmark against the best ma-kes
Wizz Air 
the winner on the market.
Maciej Kwiatkowski(CEO of Centralwings)Maunu von Lueders(CEO of FlyNordic)
 
Carlos Munoz(CEO of Vueling)Chris Mandl(CEO of Sky Europe)Bertolt Martin Flick(CEO of AirBaltic)
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