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One euro is the price that Wizz Air charges for a plane ticket in Italy. It can also be very cheap here when they start flying on Norwegian domestic routes, believes the aircraft analyst.
ON THE PROFIT: Controversial low-cost carrier Wizz Air is pursuing an aggressive pricing strategy to win over airline customers on domestic routes in several European countries.
Patrick Pleul, DPA / ZB
Published:
The Hungarian low-cost airline has so far invested in two domestic routes in Italy. They are both from Milan Malpensa and from two destinations in Sicily.
Some airline tickets cost 10 crowns (1 euro), writes Flysmart24.
Winair’s aviation analyst Hans Jørgen Elnæs believes prices like this may appear when Wizz Air starts its new company in Norway.
– I’m not surprised if they test the market here with it. It can also happen pretty quickly hitting Christmas traffic, he tells E24.
Elnæs has experience with Ryanair and worked strategically with the aviation markets in Europe.
According to him, the ticket price represents 55 percent of Wizz Air’s revenue. The rest comes from everything you have to pay in addition to the trip itself.
– Nine out of ten who buy a ticket for one euro probably buy some of the additional services, such as luggage, seat selection, etc. Wizz Air is the best in its class.
Read on E24 +
Analysis: Why Wizz Air came to Norway (+)
VINGESLAG: Aircraft analyst Hans-Jørgen Elnæs believes it could be a fierce battle for domestic customers in Norway when Wizz Air begins flying on the busiest routes in November.
Marius Lorentzen / E24
Price war in the billion class
The low-cost giant has around NOK 17 billion in cash on the books, according to its latest accounts.
The company arrived in Norway in 2006 and offers routes to 11 Norwegian cities. They fly 48 routes to 12 countries from Norway, but now they will increase to 51 more routes, from and within Norway.
Although they will be flying domestically through Oslo, there is no full Norwegian base for Wizz Air to start with. This means stricter requirements on the part of the authorities.
– There will be two planes that will be able to park overnight at Oslo airport. The cost is small, and therefore there will be no high risk, Elnæs emphasizes.
“The Wizz Air expansion is definitely not a stroke of mercy for SAS, but it comes at a terrible time,” aircraft analyst Jacob Pedersen at Sydbank wrote in a note after the Norwegian investment became known.
In Norway, the company started the price war with its first domestic flights on November 5. Now they sell individual tickets for 109 crowns.
This comes suddenly to Norwegian and SAS. Both have been fighting since before and have responded by lowering their prices.
– Then they go directly to the trap of József Váradi (CEO of Wizz Air), says Elnæs.
He warns established airlines not to get carried away.
– Norwegian and SAS should rather trust their own product and their dominance in Norway. What Wizz Air does with its few routes shouldn’t affect its prices, the aircraft analyst believes.
also read
Analysts believe Wizz Air will put pressure on SAS and Norwegian: – It will come at a terrible time
In open conflict with the peaks
There are far more than competitors reacting to the low price giant’s Norwegian investment.
After the head of Wizz Air made statements that the company “is an airline without unions”, Erna Solberg announced a boycott.
“I will not fly with a company that refuses to organize,” the prime minister told the Storting.
Solberg was praised for this by various organizations, who also boycotted the company.
Elnæs believes that Wizz Air manages to make money despite the crown and criticism. Preferably setting extremely low prices.
– If you want to test the market in Norway and check public opinion, you can run ten kronor bills. They have very little to lose. Politically, it is not the room rental, and they will receive a backlash against it, but those of us who follow this see that consumers respond positively to being able to travel at low prices, he says.
Although they will be flying domestically through Oslo, there is no full Norwegian base for Wizz Air to start with. This means stricter requirements on the part of the authorities.
– They get two planes that don’t get a base, but they stay to sleep. The cost is small and therefore there is no high risk.
The company currently has bases in several countries outside Hungary, including Italy, the UK, Germany, Ukraine and Russia, and will soon open a subsidiary in Abu Dhabi.
Flysmart24: Fight in new markets with tickets for 10 crowns
