Wizz Air hits wall in bid for London Gatwick growth

Bloomberg

Wizz Air Holdings Plc has a chance to become a force across Europe, using its low-cost
structure and financial clout to capture a bigger share of the market when the coronavirus
finally lets up.
The Hungarian discount carrier has snapped up airport capacity in Italy, Germany, Norway and the UK during the pandemic, but the westward push has been slowed by measures meant to stabilise an industry hard hit by the outbreak.
Authorities in the UK and the European Union have extended a waiver of rules that force airlines to relinquish unused takeoff and landing slots — shielding them from rivals targeting expansion at hubs like London Gatwick. Wizz Chief Executive Officer Jozsef Varadi argues that the measures are protectionist, and that airports starved for fees would welcome fresh tenants.
“Airports are firing people as a result of incumbent airlines stopping flights,” Varadi said. “We could revive those airports but we’re being blocked out.”
Controlling more slots would help Wizz capture a bigger share of the travel rebound when it arrives. Varadi has modeled the company after Ireland’s Ryanair Holdings Plc, Europe’s biggest discount carrier.
Both airlines have signalled that they’ll keep taking plane deliveries and opening new bases in preparation for the upturn. In a market unlikely to return to 2019 levels for several years, any gains they make will come at the cost of others.
Varadi has been particularly frustrated at Gatwick, where British Airways, Norwegian Air Shuttle ASA and Virgin Atlantic Airways Ltd have gone into retreat. Wizz wants to base 20 planes at the hub south of London, where it would take on EasyJet Plc. So far it’s only been able to place one. Wizz says it’s also struggled to expand in France, Italy, the Netherlands, Portugal and Poland.
“I can see both sides,” said John Strickland, who runs London advisory firm JLS Consulting. “On one hand, you have an airline that wants to grow in what is currently an almost empty airport. On the other, you have airlines that have invested time on building up the value of a portfolio of slots.”
US discount carrier JetBlue Airways Corp has also sought to expand into Gatwick and London Heathrow to open up trans-Atlantic flights. Last month it complained to the US Department of Transportation of “ongoing challenges” obtaining slots in the UK, even as Richard Branson’s
Virgin Atlantic ceased operations at Gatwick and Norwegian Air exits the long-haul business based there. In normal times, airlines must use at least 80% of their takeoff and landing slots at European airports or face losing them the following year, a requirement that has been suspended through winter.
Wizz, Europe’s third-biggest discounter behind Ryanair and EasyJet, says it needs permanent airport rights to justify the investment at Gatwick, where it envisions employing 800 people.