Industry set for crash landing

"The euphoria that came with EU accession has crumbled and many airlines have already been forced to pull back," Varadi said. "The industry's facing big consolidation ... and from Central Europe, only one will survive, the one with the lowest cost base and the one that can become a European and not just a Central European airline."

Poland is set to become a decisive battlefield in the fight for the skies. "The battle is in Poland, and Poland will become a two-player market with Wizz taking half and Ryanair taking the other half. Everyone else will be knocked out," Varadi predicts.

Poland is Central Europe's biggest market and industry group IATA says it and the Czech Republic will be among the world's fastest growing airline markets over the next four years. Lot has failed to capitalize on the growth with passenger numbers rising just 1.7 percent last year, but industry experts predict that low-cost capacity in Poland could even double this summer.

Despite this, Varadi says few will be able to profit from the boom as the market is extremely price sensitive and even Easyjet may struggle to hold on in Poland: "Easyjet came in, probed the market, but their growth has been marginal and they realized that the market just doesn't support their high cost structure."

Industry experts have long predicted a consolidation in the sector, but with Wizz Air and its main local rival Sky Europe yet to turn a profit, its difficult to see who will be the last man standing. Varadi predicted his airline would turn an operating profit this year after a nearly 50 percent rise in passenger numbers in 2006. Sky Europe says it will have an operating profit in 2006 and a net profit in 2007. (Reuters)