Wizz Air Founder & CEO Jozsef Varadi: Cyprus has the potential to become an aviation gateway

The global aviation industry has faced numerous challenges in recent years, from the COVID-19 pandemic stalling operations to geopolitical crises causing instability in various regions.

There has also been an uptick in the call for airlines to begin meeting green targets in the push to deal with climate change.

Wizz Air CEO Jozsef Varadi recently discussed these issues and more with GOLD, explaining how the airline has overcome challenges and is now looking to the future with optimism as it plans to grow and remain competitive in an ever-changing market.

Jozsef Varadi sees Wizz Air as a point-to-point airline rather than a connection model but, in an interview with GOLD, he shared his belief that Cyprus has the potential to be an aviation gateway, thanks to its location between Europe and the Middle East. “Cyprus, strategically, is more than just a member of the European Union,” he said, “because it is clearly a bit of a crossroads and a gateway between geopolitical boundaries. I think that it has stepped up as a market, especially with regard to the wars in Ukraine and the Middle East.”

Commenting on Wizz Air’s investment in the Cyprus market, he noted that the airline had originally looked at the country as “a European idea” but it has since come to understand that the island offers more than many other EU countries, which translates into having the potential for more investment. In this respect, the airline currently has three aircraft based in Cyprus and is planning to add another one next summer.

The airline's investment in Cyprus

In the context of its investment in Cyprus, Varadi said that Wizz Air was looking to take advantage of the European Open Skies Agreement, which allows any EU airline and any US airline to fly between any point in the EU and any point in the US. He remains hopeful that the EU will expand this regime to more destinations.

“I'm almost certain that the European Union will continue to engage with third countries to put them into a similar Open Skies regime, through horizontal agreements or whatever regulatory framework they choose, and that will create new opportunities for Cyprus. When I think of Cyprus, I think about going eastwards as well as westwards,” he said, noting that, in the past, Wizz Air had predominantly been looking at westbound traffic but has now expanded its view, taking into account the success of certain markets like Israel and the Caucasus.

Commenting on the island’s still limited connectivity, Varadi said that the airline already connects the island to a large number of countries. “So far, however, what we have been building in Cyprus is more of a skeleton framework,” he said, adding that “We can put more meat on the bones going forward. We certainly want to work together with the Government to make sure that its agenda is aligned with ours and vice-versa. We would welcome any initiatives that aim at reducing the present level of seasonality.”

He also pointed out that greater frequency of flights could be introduced and hinted at further developments regarding the company’s business model.

“I think we are strategically very well positioned for stimulating market growth, because we have an efficient business model and, very importantly, we have the assets and an order for 300 more aircraft, which will help realise that ambition,” he told GOLD

Global aviation industry challenges

As regards the challenges facing the global aviation industry, Varadi pointed out that not all airlines have been facing the same issues. Wizz Air, he said, had been affected differently, partly due to what he described as “significant ‘black swan’ events” in the last few years: the war between Russia and Ukraine and the outbreak of the crisis in the Middle East. “Originally, 13% of the company’s model was dedicated to Ukraine and Russia,” he explained, “while before the Middle East crisis, ours had been the largest non-base carrier to Israel. The combination of these two factors caused the company to lose almost 20% of its mature capacity.” As if that was not trouble enough, it was coupled with another crisis: the GTF engine problem, which impacted numerous airlines and thousands of engines and led to the grounding and inspection many fleets. For Wizz Air, it meant an overall loss of 40%. However, Varadi remains optimistic that growth is coming. “From a period of problems, we are now moving towards a period of opportunities and looking at 20% growth in the near future,” he said.

Elaborating further, he referred once more to the 300 aircraft that the airline has on order. “We are one of the few airlines with the ability to grow, thanks to those 300 aircraft, over the next six or seven years,” he stated. “No-one else is in that kind of a position.”

Varadi also spoke about flight cancellations in Cyprus, which has been a serious issue for many travellers. He admitted that there had been a time when operations were not optimal but said that this had led to significant investments by the airline, “to have more spare aircraft more people on standby to backfill operational hiccups.” He added that Wizz Air has redesigned some of its flight scheduling “to create less stretch in the system.”

However, he pointed out that the root cause of many flight delays and cancellations was the European air traffic control system. Off peak, he said, there are almost no issues, while during peak times, there are problems because the system stops functioning. “Those are the times when the European air traffic control system basically just stops functioning properly due to staff shortages and a lack of coordination. You may recall a European initiative – ‘Caesar’ – which aimed to make the air traffic control system efficient and economically sustainable. It failed because national air traffic control organisations couldn’t collaborate and coordinate among themselves.”

Embracing greener technologies

Discussing the ongoing changes in the aviation industry, especially regarding greener technologies as the world tries to find efficient ways to deal with climate change, Varadi proudly expressed the view that Wizz Air is actually the most sustainable airline around, given its operational efficiency and the technology it uses. “We fly 239 passengers, while some competing airlines fly 150, which makes us more efficient as regards our carbon footprint,” he said, adding that some 60% of the Wizz Air fleet has already been renewed for new engine option (NEO) technology – the highest rate in Europe.

He also noted that Wizz Air is collaborating with partners to create newer technologies and sustainable aviation fuel (SAF). “We are funding two projects to ensure that we are actively pushing for innovation and the greater availability of SAF,” he explained. He highlighted the fact that it is not widely available at present and described the problem as “an ecosystem challenge, which involves not only airlines but manufacturers, governments and others. We are hearing big statements but the whole ecosystem needs to be prepared to accept, produce and use sustainable aviation fuel.”

This interview first appeared in the December edition of GOLD magazine. Click here to view it.