Hungary

After Malev's grounding, Hungary could become large LCC market with Wizz Air and Ryanair moving in

Low-cost carriers, in particular Wizz Air and Ryanair, stand to benefit the most from the 03-Feb-2012 suspension of services at Hungarian flag carrier Malev. Budapest-based Wizz Air was already the second largest carrier in the Hungarian market and has now become the country’s largest carrier. Ryanair, which only late last month unveiled plans to resume service to Budapest, will become within a few months the second largest carrier in Hungary in the post-Malev era.

Lufthansa, as the largest remaining legacy carrier in the Hungarian market, is also poised to benefit from Malev’s grounding. Malev had accounted for a 47% share of capacity (seats) in its home market. Most of this share will be absorbed by LCCs although total traffic at Budapest Liszt Ferenc International Airport, which is owned by a private consortium led by Germany’s Hochtief, will likely decrease as its status as a transit hub is lost. Malev had been pushing to raise Budapest’s profile as an international hub, focusing on east-west connections. Malev's collapse saw oneworld overnight drop from the leading alliance in Hungary to the third largest after Star Alliance and SkyTeam.

Hungary’s Malev closes in on profitability

Hungarian Government-owned flag carrier Malev has seen a significant improvement in its financial situation over the last several months as it looks to a potential re-privatisation in 2012.

Restructuring work began at Malev in Feb-2010, when the Government renationalised the highly unprofitable carrier, and as reported in June was approaching conclusion, with aims be back in the black in 2012. Malev chief commercial officer Otto Gergye told CAPA last week that Malev’s financial performance has improved significantly over the last three months and “we’re definitely on the right track”.

Europe’s airlines press European Commission to ensure Single European Sky targets are met

There are few subjects that Europe’s airlines can agree on, but the lamentable state of the European air traffic control system is one of them. This week, industry bodies representing all sectors of the European air transport market blasted the efforts of European member states and their air navigation service providers (ANSPs) on reducing costs and increasing efficiency for falling short of where they should be.

Air traffic inefficiency and the high costs associated with Europe’s patchwork air traffic management (ATM) system are estimated to cost the European aviation industry between EUR4 billion and EUR5 billion p/a. The delays and inefficient routings punish both passengers and airlines, increasing flight times and distances and driving up fuel burn and greenhouse gas emissions, a particularly galling situation given the entry of aviation into the EU Emissions Trading Scheme next year.

Middle Eastern LCCs driving growth into Eastern Europe, Russia and CIS

Russia, the CIS nations and Central and Eastern Europe have been receiving a great deal of attention from Middle East-based carriers in recent months. Full service and low-cost carriers have announced or added a flurry of routes into Eastern European destinations over the past few weeks. Airlines in the Middle East are looking to tap into the underserved region, which is still showing strong economic growth despite troubles in several European markets and strong growth in business and tourism traffic.

Homegrown LCCs Air Arabia and flydubai are leading a push into the regions, but so too is Qatar Airways. Additionally, Oman Air plans to launch services to Moscow. While Middle Eastern carriers have long dominated traffic into western Europe, they now comprise the majority of traffic between the Middle East and central Europe, eastern Europe, Russia and CIS.

Europe's fringe carriers look for partners to overcome financial crisis; Cyprus Airways latest

Airlines on Europe's southern and eastern periphery are becoming more precariously positioned, but are looking for for partners to help overcome the growing financial crisis. Cyprus Airways is the latest such carrier, and reported a widening in first half losses in the six months to 30-Jun-2011, as lower top-line revenue fell and higher fuel costs squeezed the airline in the period. Cyprus Airways is also turning to implementing a raft of measures aimed at stemming operating losses.