Ryanair poised to fly to Poland
Ryanair, Europe's largest low-cost airline, will start passenger service to Central Europe as soon as skies are liberalized in January 2004, according to Michael Cawley, Ryanair's commercial director. "Poland is the largest market in Central Europe," Cawley said. "I think it's the strongest candidate." Poland, which closed two chapters in its accession talks with the European Union (EU) last week, is now looking to reach an agreement on transportation by June. The previous government asked the EU for a transition period until 2006 before opening up Polish skies - a move aimed at protecting LOT Polish Airlines against stronger EU-based competitors - but the Democratic Left Alliance (SLD) relinquished the transition period. The government expects Poland to join the EU by Jan. 1, 2004. "We want to liberalize air transport on the day of accession," said Ewa Haczyk, spokeswoman for government's the European Integration Committee (KIE). "The official position has yet to be changed but that is our stand now."
The EU liberalized air traffic in 1997, spurring a dynamic expansion of pan-European low-cost airlines, which now pose a threat to national carriers. "The 1997 liberalization was an absolute basis for our business," Cawley said. "We can fly to any destination in the EU without interference from any government." Likewise, the expected expansion of the EU to include 10 new countries in 2004 will open up untapped Central European markets to the Ireland-based Ryanair and other no-frills carriers. "Once the EU is enlarged, the air transport market is automatically enlarged," said Yves Panneels, spokesman for the Brussels-based Virgin Express. "We will certainly consider flying to Central Europe."
Limits to expansion But airlines and industry analysts warned that the no-frill carriers' Eastern expansion won't happen on a large scale upon liberalization. "We'll offer one or two services to start with," Cawley said. The preferred option for some carriers is to grow by increasing flights on existing routes rather than adding new ones, according to Michael Stoddart, a transport analyst at ING Barings in London. "Then they will have to look at Eastern Europe because it's the next step." U.K.-based EasyJet is now busy expanding its existing network in Western Europe, according to Samantha Day, EasyJet's spokeswoman, though she said the carrier would consider starting flights to Central Europe when the skies are liberalized. "We fly to destinations where the market is substantial and where there's a monopoly that creates too-high fares," Day said.
The cheapest fares available on the London-Warsaw route, now operated by LOT and British Airways, begin at $240. "We would look to offer substantially lower prices than that," EasyJet's Day said. Ryanair's regular fare on a comparable route from London to Rome begins at a mere GBP 16. Western Europe's low-cost carriers may start one or two services to Central Europe in 2004, but they will concentrate on flying Northern Europeans south and expand elsewhere later, according to Chris Avery, airline analyst at JP Morgan in London. "Eastern Europe remains somewhat unproven, so the bulk of (the low-cost carriers') expansion will be in the standard north-south direction," Avery said. But analysts noted that the no-frills operators would eventually come to Poland.
