“The race for consolidation has started in low cost air travel”

Lhe aviation world is conducive to acrobatics, drama and surprises. The dramas are periodic and almost existential. The attacks of September 11, 2001 in New York cast doubt on the future of such a vulnerable mode of transport. The 2020 global pandemic brought the sector to its knees, in a context of unfavorable climate mobilization, suggesting that the boom in aviation was coming to an end. However, each time, as in the meetings of our childhood, the acrobat emerges from the clouds more sparkling than ever.

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This is what seems to be taking shape at the end of 2021, at least for some. “This crisis is the biggest opportunity for expansion that I have seen for thirty-five years”even boastful Michael O’Leary, the boss of Ryanair. His low cost company quickly emerged from the crisis. Its market capitalization of 17 billion euros is four times that of Lufthansa and seven times that of Air France-KLM. However, it is not from him that the surprise of the moment comes, but from an even more daring acrobat, from Hungary.

When the Hungarian government ousted Jozsef Varadi in 2003 from the head of the national company Malév, he did not make the smartest decision in his life. A year later, the ambitious man launched the company Wizz Air with the contribution of American capital. Ten years later, Malév was liquidated and Varadi’s company became the low cost champion in all of Central Europe.

Tender Offer Rejected

In September 2021, the company tried to buy out easyJet, number two in Europe behind Ryanair. The British company strongly rejected the offer, but hastened to announce, Thursday, September 9, the raising of more than 1 billion pounds on the stock market for “Take advantage of strategic opportunities”.

The race is on, but it won’t be for everyone. The generous public subsidies which prevented Air France-KLM and Lufthansa from sinking prevent them from participating in any European consolidation. And sometimes force them to give up slots at their airports. This is why Wizz Air is feeling its wings growing. Its return to better fortune is faster than its competitors, analysts predict it could surpass its 2019 level of activity by the end of this year. As a result, its market capitalization exceeds 5.8 billion euros, or 2 billion more than its predecessor easyJet.

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