Wizzair Launches 14th Base

Wizzair announced earlier this week that the carrier is to launch its 14^th base in the Lithuania capital Vilnius. The Hub analyses its decision.

Wizzair has announced it is to open its 14^th base in Europe in the city of Vilnius. The carrier currently has 12 bases across Eastern Europe including: Budapest, Katowice, Sofia, Gdansk, Timisoara, Bucharest, Kiev Borispol, Warsaw Frederic Chopin, Pozan, Cluj, Prague and Luton.

New Eastern European Bases

The carrier last month announced that it is to launch a new base in Belgrade from April 2011. In the same month, Wizzair is now also going to base an aircraft in Vilnius. The carrier will base one Airbus A320 in Vilnius and start services to London Luton, Rome Fiumicino, Milan Bergamo, Barcelona, Stockholm Skavsta, Cork, Eindhoven and Doncaster-Sheffield all existing markets that are currently served by Wizzair from other bases.

Wizzair will view Vilnius as a market that is underserved, with limited competition and a market that can be further stimulated through cheaper fares. Lithuania has failed to build a successful based carrier of its own, with Flylal (previously Lithuanian Airlines) going bust in January 2009 and that has left a void for Latvian carrier Air Baltic to fill. Air Baltic announced just over one year ago that it was to open five new routes from Vilnius for the summer 2009 season and has built it presence to be the largest carrier in the Lithuania market. According to Flightbase (week beginning October 25^th) Air Baltic now has 31% of weekly frequencies from Vilnius, serving five destinations including Copenhagen, Paris Charles de Gaulle, Rome Fiumicino, Riga and Tallinn.

Existing Weekly Frequency from Vilnius

Source Flightbase 25-31OCT

Wizzair will have a lower cost base than Air Baltic and therefore be well positioned to reduce fares and stimulate the market, as well as capturing market share on routes that are already served. Vilnius has a strong potential to develop its inbound tourism market replicating growth in inbound tourism that has happened in Estonia and Riga. The Lithuanian market is not currently served by easyJet and Ryanair and therefore the carrier will view getting a first mover advantage over the two major European low cost carriers. Although Ryanair has recently announced that it is to base aircraft in Tallinn from summer 2011.

Competition

Of the eight markets that Wizzair has announced half of these are not currently served including Barcelona, Cork, Eindhoven and Doncaster-Sheffield, (according to Flightbase 25^th October). London is current served by Star1 Airlines 8 weekly, Rome is served by Air Baltic thrice weekly, Milan is served through Malpensa rather than Bergamo again with Star1 and Stockholm through Skavsta by Estonian Air. So the only two routes where there will be direct competition to the same airport will be on Stockholm Skavsta and Rome Fiuimicino.

Opening a base at Vilnius appears to be a smart move for Wizzair whom will be able to compete aggressively on price, stimulate the market and capture market share. Lithuania is the largest of the three Baltic counties in terms of population size and its GDP per capita looks to be between Tallin and Riga, but the airport of Vilnius has less air lift than the other two airports in Tallinn and Riga with passenger traffic marginally less than it's rival Tallinn perhaps an indication of the opportunity at Vilnius.