Wizz Air Says Conditions Too Tough for Hungarian Startup Solyom
Jozsef Varadi, chief executive officer of Wizz Air, Eastern Europe’s biggest budget carrier, said it’s a bad time to establish a new Hungarian airline, days after startup Solyom Airways announced plans for flights.
Solyom Air said this week it has leased six aircraft and opened an office at Budapest airport as it works on plans to fill a gap left by the collapse of flag-carrier Malev Zrt.
“There’s no growth in Europe and oil prices are near all-time highs,” Varadi said today in Budapest. “That affects profitability and the amount of available funding.”
Malev, founded in 1946, ceased flying in February 2012 with debts of 60 billion forint ($266 million) after the Hungarian government became one of the first in Europe to decide it could get by without a national carrier. Discount airlines led by Wizz and Ryanair Holdings Ltd. (RYA) have filled the gap on the most viable routes, though available connections remain below prior levels.
Varadi, who was previewing Wizz’s new Budapest-Moscow route, which commences in September, declined to comment on a potential initial public offering, calling reports of a planned sale “press rumors.” The Budapest-based company will announce such steps in time, should a decision be made, he said.
Wizz has appointed Barclays Plc., Citigroup Inc. and JPMorgan Chase & Co. to prepare an IPO in London, people familiar with the matter said this month. The sale may happen as early as the second half of this year, one of the people said.
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