LIVERPOOL John Lennon Airport (JLA) announced a five year deal with Hungary-based low-cost airline Wizz Air this week.
The deal cements a partnership that began in 2004, but, more importantly, signals a commitment to the region by the biggest low-cost airline in Central and Eastern Europe amid some of the most challenging and competitive business conditions in decades.
A combination of the economic downturn and the impact of the Government’s Air Passenger Duty tax has affected the air travel sector, resulting in a dog-eat-dog market for airports desperate to secure long- term commitments from airline operators in the hope of a swift return to a long-awaited upturn.
Wizz Air currently operates four routes from JLA – to Gdansk, Warsaw and Katowice in Poland and Vilnius in Lithuania – but it plans to increase routes and frequencies when it boosts its fleet from 39 planes to 50 by the end of 2014, securing potential for real growth in routes and passengers.
With the likes of Manchester Airport sniffing around Wizz Air, keen to persuade it to relocate from Liverpool when its current agreement with the airport ended, it was even more imperative for JLA to convince Wizz Air that it was the more attractive proposition.
Now the deal has been clinched, JLA believes it underlines a recognition by the industry that it is a credible base for a wider range of operators in a time of flux, as traditional budget airlines such as Easyjet and Ryanair ramp up their operations at Manchester.
Matthew Thomas, commercial director for JLA owner Peel Airports, welcomed the Wizz Air contract as proof that the operator not only recognises JLA’s ultra-competitive cost base, but also the investment Peel has made to improve and enhance the customer experience and transform the airport into more than just a hub for budget airlines.
Mr Thomas told The Post: “This is really good news and an exciting time in the development of the airport.
“We have invested a lot in improving the terminal experience at the airport, but economic conditions have really tightened and it is a commercial situation we are in. We need to have the best service levels so customers want to fly from here again.
“This deal is a coming together of these things – aggressive commercial terms have been agreed but we have confidence in our cost base and the experience we can give customers.”
Mr Thomas denied JLA adopted an “at-all-costs” approach to secure the Wizz Air deal in the face of competition from Manchester.
He said: “As soon as you cut costs too deeply the customer experience is impacted and planes won’t leave on time. Buying business for the sake of buying business – we are not in that game.”
And he insisted Wizz Air can become a key operator at JLA, just as Easyjet and Ryanair have. He said: “We have done a good job with being on the right horses for the past few years and we have a good understanding of the Eastern European market and its customers.
“So, with this agreement in place, we can see there will be growth opportunities in the next five years.”
Mr Thomas said passenger growth is a two-way street, adding: “The key part of this agreement is stimulating the market at both ends.
“We understand the Liverpool market and Wizz Air understands the East European end.
“It is a really good deal for Liverpool. It is going to open up more routes and we think there will be more to come. We are very pleased with this deal.”
A key plank in JLA’s business plan in the face of the downturn, Mr Thomas said, has been to reposition the airport as a passenger-friendly business in terms of both efficiency and punctuality and the pre-flight experience.
He said: “Liverpool ranks as one of the best performing airports in the UK. On-time performance is critical to people like Easyjet and Ryanair.
“But we have worked hard to transform the offer, with our teams and with retailers, and it feels like we are getting these things right.
“This deal reflects that we have the most efficient cost base, but it is not enough on its own and people need to enjoy the restaurants and shops we have here.”
Daniel de Carvalho, corporate communications manager for Wizz Air, said the carrier recognises the benefits Liverpool has to offer, which ultimately ruled out a move to Manchester.
He admitted: “We had been approached by Manchester a while ago and had been in talks with them.
“Manchester may not have been a bad option, but Liverpool could deliver the same fees and services, so there was no need for change.”
He acknowledged JLA’s attractive cost base, saying: “Our agreement is locking in the conditions and value of the airport fees and service levels we have been having.
“That is relevant because costs are rising everywhere.”
Wizz Air currently operates from four UK airports – JLA, its sister airport in Doncaster, Glasgow, and Luton, where it is the second-biggest carrier with 3m passengers.
Mr de Carvalho pledged its commitment to those four airports and said when fleet capacity increases in 2014 they will almost certainly benefit from extra routes and flights.
“We will have more planes and that will translate into more routes and frequencies,” he said.
“It is not decided yet, but it is likely they will benefit the airports we are already dealing with here.”
And he reiterated the opportunities for inbound tourism to Liverpool: “Central and Eastern Europe are thirsty for travelling. There’s an increase in the middle classes there and we will do joint advertising for Liverpool in Lithuania and Poland.”
He said business travel on the JLA routes is also rising.