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Air Scoop Newsletter December 2006

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Highlights in this Issue No Frills carriers: Revolution or Evolution? p. 4 A Five Forces Analysis of the Central European Market p. 6 World Travel Market Conference 2006 p. 8 LCCs in Russia p. 11 LCCs in Poland p. 13 The Low Cost Carriers Analysis Newsletter AIR SCOOP ANNOUNCEMENTS EDITORIAL Air Blow - News In Brief ast May, Air Scoop made a special issue on Central and Eas- Air France-KLM announced the launch of a tern European LCC markets. These markets are more than new LCC. Lever under heavy competitive pressure (p. 13), especially since Based in Paris Orly Airport, it would be mo- powerful “Islanders” decided to invade them (p. 14). Maciej Kwia- deled on its subsidiary: transavia.com, and tkowski, CEO of Centralwings, Polish LCC, has kindly answered jointly owned by Air France (60%) and tran- to our questions about his company, his market and his competitors savia.com (40%). The French-Dutch legacy (p. 2). These C&E markets are also important as they are conside- carrier wants to benefit from the important red as a step towards far eastern areas, such as Russia (p. 11-12), for leisure market with this medium-haul carrier many European LCCs. Indeed, German LCCs prefers to attack these with “southern” destinations (Morocco, Spain, new markets with currently low LCC penetration rather than wes- Tunisia…). tern European markets (p. 11). Russian airports are also aware of the opportunities and threats created by the development of low-cost Ryanair announced a third base in Spain by carriers in these markets (p. 12). The use of SWOT Analysis or Mi- the end of 2007. chael Porter’s Five Forces framework (p. 6-7) applied to these mar- Ryanair has already two hubs in Spain in Gi- kets is really relevant to understand factors of influence and to anti- rona and Madrid, and is still negotiating with cipate as best as possible future mutations. For instance, Ryanair is five Spanish airports to decide where to settle generally given top billing for generating non-ticket revenue from its its last base. passengers. But another star may steal a portion of the spotlight from Europe’s top low cost carrier (p. 5). A recent study from the Civil Air Scoop - In the Air Aviation Authority (CAA) pointed out benefits of European LCCs, but also revealed that socio-economic profiles of air passengers have not changed (p. 4). The release of this study matched with the World Vueling: a base in Paris Travel Market 2006 in London (p. 8). This was an opportunity to meet some delegates and speakers, like Vojin Vlahovic (Director of Montenegro National Tourism Organisation) and Niko Bulic (Director of Croatian National Tourist Board) and to know their points of view on Low-cost carriers in Europe (p. 9). This event was also a chance to discover smaller carriers, such as Fly Gibraltar (p. 10). As the year 2006 finishes, the whole Air Scoop Team wishes you a merry Christmas and a great new year 2007! We would like to thank all our readers who have made this first year of Air Scoop newsletter such a phenomenal success. See you in 2007 for more LCCs analysis, exclusive interviews of LCCs leaders, full LCCs events coverage, and many new projects yet to come. Ryanair and UAV 737RS Air Scoop - November 2006 www.air-scoop.com BIRD’S EYE VIEW Exclusive Interview of Maciej Kwiatkowski, (CEO of Centralwings) Maciej Kwiatkowski, CEO of Centralwings Could you please present Centra- many attractive destinations all over lwings to our readers? What are your Europe. We know the market and specificities compared to other Euro- we know it well. We want to be as pean LCCs? What do you do better attentive as possible to our passengers than your competitors? needs - offering good quality and best standards. Centralwings has been operating fli- ghts into the UK since February 2005 Ryanair, easyJet and Wizz Air have number of Polish nationals choosing and into Ireland since October 2005. announced the launch of new routes We operate routes into London Ga- to travel for business and occupatio- to Polish market. How do you plan nal opportunities; for tourism; and twick from Warsaw and Krakow; to manage such competition in this Edinburgh from Warsaw, Gdansk and to visit family and friends. We also market? What are your advantages provide visitors to Poland with access Katowice; Shannon from Warsaw; on this market? and Dublin from Wrocław, Gdansk to some of the most beautiful and ex- and Katowice. We have carried over citing destinations, such as Krakow, In addition to the routes mentioned Wroclaw, and Gdansk. 1.9 million passengers since the begin- above, Centralwings has added 11 ning of our operations. Centralwings new routes to its schedule for win- “Islanders” (Ryanair and easyJet) operates nine Boeing 737 400s and ter 2006/7. Centralwings operates 300s. The fleet is serviced and main- need to find new attractive destina- the largest number of the flights on tions to maintain their growth; The- tained at a certified technical base of the Polish market during this season. PLL LOT. refore Central Europe represents an This includes 6 new flights to the UK important market for these LCCs. We offer our passengers all kinds of and Ireland (from Warsaw to London services to make their travel easier, Who are your most dangerous com- Stansted, Gdansk to Shannon, Wro- petitors: ‘Centralers’ (SkyEurope, faster and more low cost. Centra- claw to London Stansted and Cork, lwings gives wide variety of payment Wizz Air, Estonian Airlines…) or Krakow to Cork and Szczecin to Du- ‘Islanders’: Now? In near future? methods, by money transfer, cash or blin). This winter we offer a total of credit card. Our passengers are able to 24 connections. choose their seat at the check in and Poland is the second fastest growing We operate to the UK, Ireland, Ita- air travel market in the world after pay less for any excess luggage then in ly, France (routes to Lille and Paris any other low cost airline. China. Central Europe is very compe- launched this winter) and other mar- titive, with the presence of all the ma- Children aged between 2-16 years old kets. We also offer charter flights and are eligible for a 20 per cent discount jor European players. Even this year, charter-mix products (in the win- there have been new entrants. Cen- when traveling with Centralwings, ter season this year this will feature and there is no charge for infants un- tralwings has just celebrated a second Grenoble - very popular with Polish year of operations during which time der 2-years old. Passengers needing to skiers last year and a successfully check in excess baggage can pre-book it has become third largest player in performing route for Centralwings). the Polish LCC market and achieved a at a discounted rate via the Centra- During the summer seasons we also lwings website. We also offer two op- 17 per cent share of the market. Next operate Mediterranean charters to year, we will build on this strong foo- tions for travel insurance, group rates, holiday destinations in the Greek Is- special offers, car rentals, hotels and ting. Healthy competition is very good lands and Sicily. These are extremely for passengers in terms of pricing and much more. Our Call Centre is availa- popular with Poles. At present we are ble in five language versions and our the wide variety of schedules and ser- a major charter operator within the vices available. We are able to offer Website – www.centralwings.com - is Polish market, with a 33% share of the one of the three most popular websi- attractive discounts and promotions sector. We are able to combine ticket to our customers, offering tickets so- tes in Poland with more than six mil- sales for tour operators with direct lion page views per month. metimes for as little as 1 euro, pound online sales through charter-mix. or zloty. We are the only Polish low cost airline Currently the most important stra- operating from seven regional airports tegic markets for Centralwings are in Poland, carrying people to and from the UK and Ireland, due to the large 2 Air Scoop - November 2006 www.air-scoop.com BIRD’S EYE VIEW The European Low cost carriers the different kinds of activities that Are you worried about the shortage market has reached a certain ma- the airline undertakes. Our onboard of pilots and crew hitting LCC mar- turity which leads to its consolida- sales are working well and continuing ket? tion. During this transition, what to develop. We offer a special menu are, for you, the greatest threats during flights as well as duty free There are concerns which all airli- to the European Low cost carriers? service available during flights out- nes will need to address, due to the Fuel rising? Overcapacity? Evolu- side the EU (charter flights). There dynamics of the growth in the LCC tion of airports? Regulation? is a special offer for children who fly sector. As the market grows, more with Centralwings - the Captain pilots are needed. Centralwings has As a Polish low cost airline operating Bear menu. Toys and gadgets are a highly qualified group of pilots and from a large number of Polish regional available to keep youngsters amused is in a strong position to deal with airports, we see operational efficiency during the flight. Passengers also have this challenge. as paramount. Some airports struggle a unique opportunity to send a post- to keep pace with the growth of the card from onboard the plane, with What are the options for Centra- market and the increased traffic, and greeting courtesy of Centralwings.
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