Budget airline Wizz Air ramps up operations at Luton airport

LONDON (Reuters) - Budget airline Wizz Air WIZZ.L, which has withstood the pressures in the aviation sector better than many of its rivals, said on Monday it would offer new routes from London's Luton airport to Cyprus, Slovakia, Estonia, Ukraine and Albania.

FILE PHOTO: A Wizz Air plane at Chopin airport in Warsaw, Poland October 12, 2017. REUTERS/Kacper Pempel/File Photo

Budapest-based Wizz Air set up a base in Luton in June - its first in Western Europe - and in October it applied for a UK Air Operator’s Certificate, to guard against the uncertainty over a Brexit aviation deal.

The airline’s exposure to central and eastern Europe has shielded it from the fiercest competition on Mediterranean and Western European routes, which contributed to the demise of the likes of Monarch [MONA.UL] and Air Berlin.

As well as offering new routes from Luton, Wizz said on Monday that it would increase its frequency on routes from Luton to Israel, Romania and Kosovo, which are seeing strong demand, and would allocate four more planes to its fleet at Luton by June 2018.

“Part of our rationale for the UK base, the UK airline, is a Brexit contingency, but equally it’s a commercial opportunity,” Chief Corporate Officer Owain Jones said, saying Britain would remain vital to Wizz after Brexit.

The aviation industry has been in turmoil this year, with Alitalia [CAITLA.UL] also entering administration, following intense price competition in Europe due in part to budget operators such as Wizz.

After Monarch went into administration, Wizz said it was interested in acquiring the UK airline’s slots at Luton.

However, Jones said that while the decision to expand was not linked directly to the fate of Monarch’s airport slots at Luton, the availability of space at airports was helping Wizz Air to meet strong demand for its routes.

Monarch was in court on Monday in a bid to appeal a decision to strip it of its right to valuable slots at Luton and Gatwick.

“The increase in demand for Wizz Air flights comes from our growing economies of our home countries. So that’s what we’re responding to here. But if there’s available airport capacity for us, then that enables us to serve even better that growing demand in central and eastern Europe,” Jones told Reuters.

Wizz Air shares have hit all-time highs this year, and earlier this month it reported a recorded summer and upgraded its profit outlook.

The extra Airbus A320s will create 150 jobs at Luton, the airline said, and will bring its fleet size at Luton to five.

“Britain has always been a very important part of our business... We’re responding to the strength of our growth through Luton, and we’ll deal with whatever comes after,” Jones said, referring to Brexit.

Reporting by Alistair Smout; Editing by Kate Holton and Susan Fenton