Battle of the budgets

In the two years since entering Poland, low-cost airlines have turned the country's aviation market upside down. According to statistics from the Civil Aviation Office (ULC), 44.5 percent of passengers in Polish airports in the first half of 2006 traveled with low-cost carriers (LCCs). Some 2.8 million out of a total 6.3 million passengers in Poland flew with budget airlines. In the corresponding period of 2005, the budget carriers' market share amounted to 27 percent.

Out of the top 10 airlines in Poland, six are LCCs. Polish national carrier Lot has maintained the number-one position, but its market share has continued to plummet. In the course of one year, since the middle of 2005, it has fallen from 47 percent to 35 percent. In contrast, its budget rivals experienced another bumper year. Hungarian Wizzair remained the largest low-cost airline and the second-largest carrier overall in Poland, with 928,000 passengers - a 78-percent increase year-on-year. This number is likely to further increase in the coming months. The company's president, Josef Varadi, announced that in the summer of 2007 the carrier will operate on 47 routes from Poland, compared to the present 34. "Poland is an amazing market. Every second person flies with low-cost airlines - it doesn't happen anywhere else in Europe," he said.

Leaps and bounds

But in the last 12 months all eyes in the industry have been on low-cost giant Ryanair's first steps in Poland. These turned out to be leaps and bounds as the carrier managed to snatch 10 percent of the market, or 648,000 passengers, in a little over a year. It is still not satisfied.

"In 2007 we want to carry two million passengers in Poland," Ryanair's sales and marketing executive for Central Europe, Tomasz Kułakowski, declares. If that's not enough, the Irish carrier is throwing down the gauntlet to the market leader. "In two years we expect to be larger than Lot Polish Airlines," Kułakowski says.

This declaration will further fuel the heated rivalry between Ryanair and Lot, which recently took the budget carrier to court for its negative PR campaigns against the national carrier. In response, Ryanair started flying from Warsaw's Chopin Airport, which it had frequently complained was too expensive to fly from. "We want to show Lot that we will compete on the market, not in the court. We will compete with them even at this expensive and ineffective airport," Kułakowski explains.

Rising to the challenge

Does Wizzair feel challenged by the rapidly expanding Ryanair and its plans? "This question should be directed to those who are losing market share, not to us," Varadi replies, adding that Wizzair's share in the market grew from 11 percent to 15 percent in the last year. "We will see in half a year," says the airline's corporate communications and public affairs director, Natasa Kazmer.

While the big low-cost airlines are preparing for battle, some carriers are focusing on niches rather than on the whole market. Sky Europe's market share in Poland fell from five percent in H1 of 2005 to four percent a year later, but that doesn't worry the company's CEO Christian Mandl. "Our goal is to be the number-one carrier in Kraków, which we are, and see further growth there," he says. In Mandl's opinion, budget airlines and businesspeople do not have to be at odds. Unlike other low-cost airlines, Sky Europe also flies to convenient airports, not just to cheap ones. "We are flying to bigger airports convenient for business clients," he says.

Michał Pakulniewicz