Wizz Air intends to extend its operations to the Middle East. The European low cost carrier announced plans to establish Wizz Air Abu Dhabi in partnership with the government investment arm Abu Dhabi Development Holding Company PJSC (“ADDH”). The new operation will be Wizz Air’s first airline established outside of Europe.
We are proud that our first airline to be established outside of Europe is in Abu Dhabi, the capital of the UAE. ADDH’s deep rooted knowledge of the local market, support and navigation in a new market for Wizz is invaluable and will boost the successful development of this low-cost airline. Wizz Air Abu Dhabi will be an incremental path of growth for Wizz Air, built on our successful ultra-low cost business model, bringing affordable travel to ever more customers. We believe the new airline has the potential to be a significant player in the region.– József Váradi Chief Executive Officer of Wizz Air Holdings
The plans are tentative at this point, but the two partners are working toward completing all of the necessary steps to realize the goal. These include progressing from this “agreement in principle” to a definitive joint venture contract between Wizz Air Holdings and ADDH and receipt of an Air Operator’s Certificate from the UAE General Civil Aviation Authority.
Building a UAE market
Wizz Air intends to use its A321neo fleet at the Abu Dhabi base, carrying 239 seats each. The new JV will target European strongholds of Wizz Air’s existing operations, connecting to the Abu Dhabi market. At the other end of the network the company expects to expand into the Indian subcontinent, Middle Eastern destinations and Africa. Wizz Air will leverage the local knowledge of ADDH, a government investment vehicle of the UAE, to help build markets and grow into the region.
One key factor in the planning is that the new carrier must either break from the existing Wizz Air model or truly build its focus in Abu Dhabi. Wizz Air only sells point-to-point flights currently. This applies for bookings with other carriers or wholly on Wizz Air.
Wizz Air does not operate connecting flights and cannot facilitate the transfer of passengers or their baggage to other flights (whether operated by Wizz Air or other carriers). For this reason, we cannot accept liability for any missed onward flights.
If you book several Wizz Air flights on the same day, they are not considered as connecting flights. You will need to pick up your baggage, exit the transit area, go to check-in, drop the baggage, proceed to security, immigration again for the next flight. Make sure to have valid travel documents for all the countries you arrive in/depart from.
Translating this into the new Abu Dhabi operation means skipping over the main value proposition that the GCC-based airlines have benefitted from since their launch. The hub airports in that region are well suited for connecting traffic between Europe or Africa to the west and Asia to the east. The local demand for travelers destined to Abu Dhabi is tiny compared to the transit traffic flowing through its airport. While this does leave room for Wizz Air to “contribute to the continued growth of Abu Dhabi as a world-class cultural and tourist destination” it also presents challenges for the business model.
The new Wizz Air Abu Dhabi will also face LCC competition from Air Arabia and Etihad. That duo intends to launch their Air Arabia Abu Dhabi LCC operation in early 2020.
The LCC segment represents only 17% of capacity in the region, according to Air Arabia, so growth is feasible. But the lack of a connecting operation could hamstring Wizz Air’s plans more than the competition likely will.