Wizz Air’s Budapest base expansion evaluated by FareWatch

Wizz Air’s Budapest base expansion evaluated by FareWatch 18 September 2019

Wizz Air is adding six routes to its Budapest base over the next few months, using the new FareWatch analysis tool, we evaluate the country markets.

Already the ULCC’s largest second base in terms of weekly seats ─ only its London Luton operation which is served by Wizz Air Hungary (W6) and Wizz Air UK (W9) is bigger ─ Budapest is set for further network expansion from October onwards as the carrier begins services to Kazan (twice-weekly, 30 October), Odessa (twice-weekly, 2 November), Edinburgh, (three times weekly, 21 December), Brussels (six times weekly, 1 June 2020), Kharkiv (twice-weekly, 1 June 2020) and Lviv (twice-weekly, 3 June 2020). Using Aviation Analytics’ new fare analysis tool FareWatch, we investigate the rationale, in terms of route profitability at least, behind this network expansion from the Hungarian capital.

FareWatch has been launched this week to replace Network Grandstand, with a crisper presentation style with several new dashboards (see below). It features a simple filter system to allow the use to select time periods, origins, destinations and carriers, all with enhanced data refresh speeds. As well as still providing a network-wide route profitability and fare data on Europe’s biggest LCCs, FareWatch now includes fare data for 30 additional airlines, including amongst others legacy carriers like British Airways, Air France, Lufthansa, KLM, SAS and Turkish Airlines.

In the run-up to World Routes, Aviation Analytics has unleashed its improved fare analysis tool known as FareWatch, replacing its existing Network Grandstand product. Slick and responsive, users of FareWatch will get all the benefits of the existing system – like more fare observation points that its competitors – coupled with a crisper presentation across its multiple dashboards. FareWatch’s market view (pictured above) gives the user an immediate snap shot of seat share by carrier, fare evolution from six months prior to departure, fare seasonality and route margin summaries.

Russian fare revolution

Wizz Air already flies to Moscow Vnukovo (10 times weekly) and St. Petersburg (five times weekly) in Russia from Budapest. According to FareWatch, for the 12 months ending in September 2019, the carrier’s Russian routes delivered a healthy profit per seat (PPS) of €23 ─ no wonder the ULCC is considering adding another destination in the country. As Kazan is currently unserved by any carrier from Budapest, unlike Moscow, where Wizz Air indirectly competes with Aeroflot’s four times daily service to Moscow Sheremetyevo, the 2,251-kilometre sector is anticipated to deliver a robust financial performance. With three new services, the Ukraine is clearly an appealing market for Wizz Air. The carrier already flies to the capital’s Zhulyany airport five times weekly with the operation providing Wizz Air with respectable PPS of €8 over the last year, according to FareWatch.

Drilling down into the data, using the Detail View, allows the FareWatch user to analyse any LCC/airport combination for a rolling year-on-year comparison up to the current processed month and looking out six months ahead. Its easily-discernible colour coding means that profitable, marginal or loss making routes and country markets can be identified quickly and easily, aiding airports in gathering network performance intelligence prior to account meetings with their airline partners.

UK top of the pile

When the ULCC begins its seventh service to the UK just before Christmas, as the Scottish capital joins the likes of Birmingham, Doncaster Sheffield, Glasgow, Liverpool, London Gatwick and London Luton, this country will become the stand alone most important (in terms of destinations served) market for Wizz Air. This new sector means that the UK moves beyond the Italian market which also has six airports served from Budapest ─ namely Milan Malpensa, Rome Fiumicino, Bari, Catania, Naples and Bologna. In terms of PPS, the airline’s UK routes are presently marginal, recording a rate of €0 since October 2018. One would presume that the airline is hoping that by serving another major airport in the UK that its yield performance will improve from its current position.

These yield improvement aspirations are perhaps echoed in the ULCC’s last new route decision from Budapest, its six times weekly service to Belgium’s busiest airport, which will operate alongside its existing 11 times weekly flights to Brussels Charleroi. Aviation Analytics’ FareWatch airline route performance analysis tool has observed a marginal PPS rate of -€5 on Wizz Air’s only route to Belgium in the period ending September 2019. It is worth noting that five out of the 12 months deliver a positive PPS on the Charleroi route, so if the carrier was able to improve its performance in two other months then it may have been able to turn the 1,128-kilometre sector from a marginal loss to a marginal profit. That might be a difficult task, given Wizz Air’s decision to operate to Brussels’ other airport 70 kilometres away.

For further details on FareWatch and its capabilities, including a demonstration and free trial, contact the Aviation Analytics team.

All reference schedule data is for week commencing 17 September. All links to airport websites are to B2B airline pages.

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