The only low-cost airline, operating in Ukraine, ceases its activity. “From April 20, 2015 onwards, Wizz Air Hungary will run only eight flights to and from Ukraine – Budapest, London, Cologne, Dortmund, Hamburg, Katowice, Larnaca, and Munich. Passenger who bought tickets for these flights on dates after April 20 need to rebook them through Wizz Air Hungary,” written in the official company statement. At the same time, lines to Barcelona, Valencia, Kutaisi, Moscow, Milan, Naples, and Venice will be closed. The company will return the full ticket price to the passengers who booked flights in those directions.
Serhii Pidhorodetsky, director general of Atlasjet Ukraine, thinks that Wizz Air’s departure happened due to State Aviation Agency altering the rules in benefit of one particular player – UIA. Each airline, Pidhorodetsky says, chooses a particular market niche, organizing its business in a way to compensate the losses. It was important for Wizz Air to secure the lines to Budapest and Bucharest, where their air bases are located. Yet, line distribution sometimes yields strange results – it is said that UIA has free lines to Poland, which the company does not use and is reluctant to open for use by other players. Pidhorodetsky is certain, that Wizz Air was simply barred from fulfilling their plans in Ukraine.
On the other hand, Denys Antoniuk, head of State Aviation Agency, sees no agency’s fault in what had happened. “We have no further information on Wizz Air’s plans, but we did not create any obstacles for them, all the roads were open. Apparently, the decision is a commercial one,” he says.
Aron Maiberg, Chairman of the Board and co-owner of UIA, also rejects the allegations of market monopolization. “The reason behind the company’s departure is that our market is very weak. Last year it went down by 40 percent – and the number of foreigners that wanted to fly to our country went down even more than by that amount. Most probably, they evaluated the risks and realized that investing in this situation would bring no profit.” According to Maiberg, the market will not be affected by this move – ticket cost depends on oil price and dollar exchange rate. But it will be a serious blow for Zhuliany airport.
However, other players in the market, like Mykola Marchenko, chairman of Ukrainian Airlines Association, disagree. Taking into account the new rules for rearranging the lines imposed by State Aviation Agency, which are tailored for a specific player, says Marchenko, the road is open for monopolization, artificial ticket price, and reduction in market competition.
“The principal goal of our Ministry for Infrastructure is to visit the UK and Spain and talk them into signing the Open skies agreement with Ukraine. Then the major players, such as Lufthansa and British Airways will come to our country and the real competition will start,” say Viktor Bondar, MP and ex-minister for transportation. According to him, this will stimulate the increase in the number of flights, including domestic ones. “Today, a regional airport usually receives from five to ten flights per day, and it is impossible to cover all the expenses with such a meager amount,” says he. Why does EU hesitate to open the skies? According to Bondar, the answer is simple: “our companies would take away a share of their market, because a Ukrainian flight ticket is cheaper than European.”
