Wizz Air (W6, Budapest) is, in principle, interested in taking over slots at Frankfurt International which Lufthansa (LH, Frankfurt International) will have to relinquish in return for state aid but only if the German airport lowers fees, Chief Executive József Váradi said during a quarterly earnings call.
"In principle, yes, we could have an interest, but you need to put things in context... We are not going to chase high-cost opportunities just because they get freed up by airlines. But we look at this opportunity. I think our interest is significantly conditioned on scalability and cost if those issues can be addressed effectively, yes, maybe we would further look at it," he said.
He added that the airline may be interested in returning to Frankfurt if it had growth opportunities at the German airport. But the number of slots Lufthansa is due to release is too small to provide such an opportunity, Váradi stressed.
"Lufthansa would still own, so to say, 98% of strategic slots at Frankfurt and Munich, and they would give up around 2%. So what kind of a level playing field is it?... So I think we need to make an assessment of whether or not it makes any commercial sense. And certainly, you would need to look at it from a longer-term scalability perspective, what it really means. So I would almost say that it would need to be followed through with the scalability agreement or something similar that we should be able to get access to growth at the airport," he said.
The Hungarian LCC terminated all of its operations at Frankfurt on April 30 following the end of a three-year period of eligibility for airport fee discounts for new entrants.
Given this development, it is unclear if Wizz Air could be treated as a "new entrant" for the purposes of taking over Lufthansa's slots.
According to terms negotiated with the European Union, Lufthansa will have to release 24 slot pairs at Frankfurt and Munich airports in return for a EUR9 billion euro (USD9.9 billion) bailout. However, the slots will be auctioned to the highest bidder, not transferred for free. For the first 18 months, the slots will only be available to European airlines which do not currently serve either airport and which have not themselves received a significant public bailout. These conditions effectively limit the number of eligible larger carriers to almost zero. Only after 18 months, should the slots still be with Lufthansa, will they be offered to other airlines.
Wizz Air, easyJet (London Luton), and Norwegian (Oslo Gardermoen) are currently the largest European airlines that do not serve Frankfurt. however, the Nordic LCC would not be eligible for the initial auction of slots given it received around NOK3 billion kroner (USD320 million) in support from the Norwegian government.
