Easy takeoffs and hard landings
This year has already witnessed some major movements in the skies over the country. Two new names - Air Polonia and Silesian Air - have appeared on the passenger airlines register, while White Eagle Aviation, Central Europe's first private airline, has bowed out of the charter market after five years.
"It was a difficult decision," said Zbigniew Niemczycki, president and co-owner of WEA. "My partner and I decided to suspend charter flights for this year because we were not able to keep prices at last year's level, and those were breakeven prices. LOT, on the other hand, reduced its prices."
Niemczycki said he was particularly disappointed because he had exciting plans for this year, with demand sufficient to keep all four of his Boeing 737-400s in regular charter operation.
Industry insiders, though, are suspicious of his real motives.
"We have recently increased our charter prices by $8-$12 per passenger, depending on the length of the flight," said Leszek Chorzewski, spokesman of LOT Polish Airlines.
The news of WEA's demise came as a surprise to the airline business community, since it had apparently been successful in gaining market share, thanks to its greater flexibility than its sole competitor LOT. As a smaller company, WEA could be more responsive to clients' demands. According to White Eagle, it flew 220,000 passengers in 2001 and 255,000 in 2002. During the same periods, the number of charter passengers flown by LOT fell from 415,000 to 370,000.
LOT and Air Polonia are already at work, taking over WEA's clients, with travel agents TUI and Orbis Travel having already moved into the LOT fold.
"White Eagle representatives have cut our co-operation, explaining that it is no longer profitable for them," said Andrzej Wasiluk, who is temporarily acting as TUI's spokesman. "Too many untaken seats."
"ScanHoliday is negotiating now with other airlines," said Joanna Sosnowska, marketing director at ScanHoliday Polska. Her company learned about WEA's suspension of its charter flights from Hapag Lloyd, co-owner of WEA, on the same day that Niemczycki announced the news to the press. The Business Journal has learned that talks between ScanHoliday Polska and Air Polonia are underway, and they are close to concluding a deal.
Despite the possibility of taking over WEA's business, the company's erstwhile competitors say that they are saddened that it has hit the rocks.
"We are very sorry when a competitor abandons the market because that proves the market is not stable," Chorzewski said.
Anna Wołek, an Air Polonia spokeswoman, agrees. "It is always bad news because competition is the best motivation to provide the best services possible," she said.
Despite its sudden rise to prominence, Air Polonia is not a new brand. For several years it has operated as an airtaxi business. But since being taken over by logistics group Chem Trans Logistic in 2001, it has been carrying out a new strategy and, as of the beginning of April, it will start carrying passengers to Mediterranean resorts. The company has already signed co-operation deals with several travel agents, among them Alfa Star and Eurotramp Sigma Travel.
Air Polonia has recently leased two secondhand Boeing 737-400 jets. Wołek said that passenger flights operating out of the major cities of Poznań, Wrocław, Szczecin, Katowice, Gdańsk and Kraków would be carrying 25% of its passengers; the remaining 75% would be flying into and out of Warsaw. Its two Boeings, at four and eight years old, are among the newest passenger airliners flying in the region.
Wołek does not exclude further expansion for Air Polonia in connection with the European open sky policy.
"It is absolutely usual for successful charter carriers to become regular airlines," she said. "But it is not going to happen tomorrow or the day after tomorrow." Air Polonia will also continue operating as a cargo carrier, providing services to United Parcel Service in central and eastern Europe, and as an airtaxi.
The plans of Tomasz Lipiński, president of Silesian Air, are less ambitious, and also less clear. Lipiński is reluctant to talk about either his business or himself. He even declined to say how he got into the aviation business.
As for his strategy, it differs significantly from that announced by Air Polonia. He intends to use small aircraft, and has leased three turbo-propeller Beechcraft 1900Ds. Beechcrafts have a capacity of 17 passengers and cruise at a speed of 480 kilometres per hour.
Silesian Air intends to operate in three principal areas: regular connections, charter flights and airtaxis. But unlike Air Polonia, the company wants to focus on regular connections, flying between Katowice and destinations in Poland and abroad, initially Brussels, Poznań and Gdańsk. Lipiński stresses that Warsaw is excluded from the strategic planning of Silesian Air.
Chorzewski does not rule out the possibility of co-operation between LOT and Silesian Air.
"Silesian Air could help us in maintaining some connections which are not profitable for us because our smallest aircraft, the ATR-42, carries 48 passengers and is much more expensive than the Beechcraft, with 17," he said.
Lipiński plans to launch Silesian Air's regular connections in the summer if developments in connection with the war in Iraq do not affect his plans. It's for this reason that he declines to reveal details about ticket prices. "We do not know yet what fuel prices will be like, and they affect our calculations," he said.
Silesian Air is a subsidiary of Górnośląskie Towarzystwo Lotnicze, the company that operates Katowice airport. Lipiński is planning to finance his undertaking out of his own pocket and with bank credits.
Despite the flurry of activity, industry insiders insist that this is not a good time for launching a new airline. The international tension caused by the war in Iraq has led to a rise in fuel prices, which are a major factor in the overall costs of airlines. The experts also point out that there is likely to be a fall in overseas travel, particularly to Muslim countries. Among Air Polonia's leading destinations are Turkey, Egypt and Tunisia.
Krzysztof Obłój, a specialist in strategic management at Warsaw University, says that the airline market here is very limited due to the fact that the country is the fourth poorest in Europe. Even so, he is optimistic.
"Still we have some potential," Obłój said. "The lack of road infrastructure is an advantage." He said that he for one would forget about driving from, for example, Warsaw to Wrocław, or even taking the train, if he could get a cheap flight.
Even Niemczycki of WEA maintains a certain amount of optimism.
"Travel agents are always seeking the cheapest option," he said. "So, I believe that if we come up with a good offer, there is still a chance for us to come back."
"It was a difficult decision," said Zbigniew Niemczycki, president and co-owner of WEA. "My partner and I decided to suspend charter flights for this year because we were not able to keep prices at last year's level, and those were breakeven prices. LOT, on the other hand, reduced its prices."
Niemczycki said he was particularly disappointed because he had exciting plans for this year, with demand sufficient to keep all four of his Boeing 737-400s in regular charter operation.
Industry insiders, though, are suspicious of his real motives.
"We have recently increased our charter prices by $8-$12 per passenger, depending on the length of the flight," said Leszek Chorzewski, spokesman of LOT Polish Airlines.
The news of WEA's demise came as a surprise to the airline business community, since it had apparently been successful in gaining market share, thanks to its greater flexibility than its sole competitor LOT. As a smaller company, WEA could be more responsive to clients' demands. According to White Eagle, it flew 220,000 passengers in 2001 and 255,000 in 2002. During the same periods, the number of charter passengers flown by LOT fell from 415,000 to 370,000.
LOT and Air Polonia are already at work, taking over WEA's clients, with travel agents TUI and Orbis Travel having already moved into the LOT fold.
"White Eagle representatives have cut our co-operation, explaining that it is no longer profitable for them," said Andrzej Wasiluk, who is temporarily acting as TUI's spokesman. "Too many untaken seats."
"ScanHoliday is negotiating now with other airlines," said Joanna Sosnowska, marketing director at ScanHoliday Polska. Her company learned about WEA's suspension of its charter flights from Hapag Lloyd, co-owner of WEA, on the same day that Niemczycki announced the news to the press. The Business Journal has learned that talks between ScanHoliday Polska and Air Polonia are underway, and they are close to concluding a deal.
Despite the possibility of taking over WEA's business, the company's erstwhile competitors say that they are saddened that it has hit the rocks.
"We are very sorry when a competitor abandons the market because that proves the market is not stable," Chorzewski said.
Anna Wołek, an Air Polonia spokeswoman, agrees. "It is always bad news because competition is the best motivation to provide the best services possible," she said.
Despite its sudden rise to prominence, Air Polonia is not a new brand. For several years it has operated as an airtaxi business. But since being taken over by logistics group Chem Trans Logistic in 2001, it has been carrying out a new strategy and, as of the beginning of April, it will start carrying passengers to Mediterranean resorts. The company has already signed co-operation deals with several travel agents, among them Alfa Star and Eurotramp Sigma Travel.
Air Polonia has recently leased two secondhand Boeing 737-400 jets. Wołek said that passenger flights operating out of the major cities of Poznań, Wrocław, Szczecin, Katowice, Gdańsk and Kraków would be carrying 25% of its passengers; the remaining 75% would be flying into and out of Warsaw. Its two Boeings, at four and eight years old, are among the newest passenger airliners flying in the region.
Wołek does not exclude further expansion for Air Polonia in connection with the European open sky policy.
"It is absolutely usual for successful charter carriers to become regular airlines," she said. "But it is not going to happen tomorrow or the day after tomorrow." Air Polonia will also continue operating as a cargo carrier, providing services to United Parcel Service in central and eastern Europe, and as an airtaxi.
The plans of Tomasz Lipiński, president of Silesian Air, are less ambitious, and also less clear. Lipiński is reluctant to talk about either his business or himself. He even declined to say how he got into the aviation business.
As for his strategy, it differs significantly from that announced by Air Polonia. He intends to use small aircraft, and has leased three turbo-propeller Beechcraft 1900Ds. Beechcrafts have a capacity of 17 passengers and cruise at a speed of 480 kilometres per hour.
Silesian Air intends to operate in three principal areas: regular connections, charter flights and airtaxis. But unlike Air Polonia, the company wants to focus on regular connections, flying between Katowice and destinations in Poland and abroad, initially Brussels, Poznań and Gdańsk. Lipiński stresses that Warsaw is excluded from the strategic planning of Silesian Air.
Chorzewski does not rule out the possibility of co-operation between LOT and Silesian Air.
"Silesian Air could help us in maintaining some connections which are not profitable for us because our smallest aircraft, the ATR-42, carries 48 passengers and is much more expensive than the Beechcraft, with 17," he said.
Lipiński plans to launch Silesian Air's regular connections in the summer if developments in connection with the war in Iraq do not affect his plans. It's for this reason that he declines to reveal details about ticket prices. "We do not know yet what fuel prices will be like, and they affect our calculations," he said.
Silesian Air is a subsidiary of Górnośląskie Towarzystwo Lotnicze, the company that operates Katowice airport. Lipiński is planning to finance his undertaking out of his own pocket and with bank credits.
Despite the flurry of activity, industry insiders insist that this is not a good time for launching a new airline. The international tension caused by the war in Iraq has led to a rise in fuel prices, which are a major factor in the overall costs of airlines. The experts also point out that there is likely to be a fall in overseas travel, particularly to Muslim countries. Among Air Polonia's leading destinations are Turkey, Egypt and Tunisia.
Krzysztof Obłój, a specialist in strategic management at Warsaw University, says that the airline market here is very limited due to the fact that the country is the fourth poorest in Europe. Even so, he is optimistic.
"Still we have some potential," Obłój said. "The lack of road infrastructure is an advantage." He said that he for one would forget about driving from, for example, Warsaw to Wrocław, or even taking the train, if he could get a cheap flight.
Even Niemczycki of WEA maintains a certain amount of optimism.
"Travel agents are always seeking the cheapest option," he said. "So, I believe that if we come up with a good offer, there is still a chance for us to come back."
