Ryanair and Wizz Air Wrestle for Eastern European Dominance

18.10.2023 - 10:23 / skift.com / Wizz Air

Ryanair is aiming to double its business in the fast-growing Polish market and expand across eastern Europe over the next decade, executives said, taking on rival Wizz Air and opening a new front in the battle of the budget airlines.

As part of its strategy, Ryanair, whose low fares have helped it dominate markets in Ireland, Italy and much of western Europe, aims to beef up its presence at eastern European airports.

It already operates from more than a dozen Polish airports, including nine bases, CEO Michael O’Leary told Reuters, often negotiating special deals to secure lower fees – crucial in the contest to keep costs down, and fares too.

“Whenever we come up against Wizz, we tend to have significantly lower fares and have much lower costs,” he said.

As an example of the strategy, he cited Albania, where Ryanair plans to open 25 new routes this winter to take on Wizz in its eastern European heartland.

But Hungary-based Wizz is not standing still.

It plans to operate at least twice as many planes as it currently has in central and eastern Europe by 2038 and is shortly set to announce 35 new aircraft in Poland alone, Chief Executive Jozsef Varadi told Reuters.

“We’re looking at double-digit growth year-on-year, over the next seven or eight years” in the region, Varadi said.

With nearly 40 million people, Poland is by far emerging Europe’s biggest country, where rising disposable incomes have fuelled a demand for travel that makes the region an attractive prospect as western European markets mature.

“All these people are getting richer. And when you get richer, you fly more, especially if you start from a base of not flying very much,” said Jamie Lindsay, an investor at Artemis Investment Management LLP, whose funds own Ryanair shares.

According to data analysis firm IBA, low-cost carriers have over 59% of the aviation market in Poland, up from 31% in 2021.

That figure is expected to continue growing as more Poles travel for tourism and work rather than migration, said Michal Kaczmarzyk, the CEO of Buzz, Ryanair’s low-cost charter and budget subsidiary based in Warsaw.

He added that Buzz and Ryanair were mainly focused on regional airports, like Modlin outside Warsaw or Katowice near Krakow.

That contrasts with Wizz, which mostly flies from Warsaw’s main Chopin airport and, according to Kaczmarzyk, means no one “could replace Ryanair’s offer in Poland”.

Ryanair’s Polish push comes as the Irish-based company faces headwinds in Italy, where it is the largest airline in the market, and France, as regulators seek to impose minimum ticket prices to curb short-haul flights – whether due to environmental reasons or to protect bus and train companies.

Poland and eastern Europe’s lighter regulatory