The long expected shake-up of Europe's low-cost market appears to be gathering pace with Italy's Volare Group and Poland's Air Polonia the latest to be grounded.
The Volare Group, which includes its low-cost arm Volareweb and leisure carriers Air Europe and Volare, suspended operations in mid-November, while Air Polonia was grounded on 6 December. They are the latest failures in the past three months, with Dutch carrier Vbird stopping flights in early October. All are working on rescue plans to secure new funding and restart services, but the chances appear slim.
The Volare Group is easily the largest to stumble to date. Its three carriers had a fleet of 21 Airbus A320s, two A330-200s and a Boeing 767-300ER. It entered the low-cost market in March 2003 with Volareweb rapidly expanding its route network from Milan Malpensa and Venice. Despite a cash injection of c120 million ($160 million) in March, by September it was seeking a further c90 million. This was not forthcoming and it suspended all flights two months later.
The carrier is talking to Italian civil aviation authority ENAC about a possible resumption of service. If this is to occur, it would have to be centred around low-cost activities as Italian tour operators have already made alternative arrangements for their long-haul business, says David Jarach, professor of air transport marketing at SDA Bocconi University in Milan. Volare would also have to rationalise its network of several bases in Italy to concentrate on Milan Linate, he argues.
However, easyJet and Ryanair have moved quickly to capitalise on the void left by Volare. Ryanair has immediately launched a Paris Beauvais-Venice service, effectively to replace Volareweb's Paris Orly-Venice route. EasyJet, meanwhile, has boosted its Italian presence and is interested in taking over some Volare slots at Orly.
Air Polonia's grounding came a year after it relaunched itself as a low-cost carrier. It operated three Boeing 737s on routes from Poland and had been seeking a $20 million capital injection.
These failures have been predicted by low-cost and network carrier bosses. Ryanair chief executive Michael O'Leary warned of a "bloodbath" among low-cost carriers this winter. Soren Belin, SAS Group executive vice-president, is also predicting a shake-out. "The sooner the better for us at least," he says.
MARK PILLING LONDON
Source: Airline Business
