Wizz Air boss says EU aviation rules risk creating a ‘decaying economy’

Wizz Air’s boss has warned that Europe’s leaders are jeopardising the region’s economy by imposing restrictions which threaten the competitiveness of its aviation industry.

József Váradi, the low-cost carrier’s chief executive officer, said policymakers were ignoring the potential of air travel to contribute to growth, putting them at a disadvantage to rivals such as Gulf airlines.

“I don’t think in Europe [that] aviation is seen as strategic as it used to be,” he told the Financial Times, warning the region risks a “decaying economy” unless it changes tack. 

Váradi’s comments are the latest from European airline executives who are increasingly concerned about the competitiveness of the sector as it is forced to comply with costly regulations such as those requiring airlines to boost their use of sustainable aviation fuel.

Europe’s leaders need to see “aviation as an economic engine for long term growth”, he said.

“The question is what Europe stands for in the long run. In 50 years, we will be the only one talking [about principles], and the whole world will be somewhere else. We have to think carefully about how we maintain competitiveness against China, the US or the Middle East.”

The bosses of Air France-KLM and Lufthansa on Wednesday called for European carriers to have a “level playing field” with Gulf rivals, particularly on schemes to cut overall emissions. 

The industry has been especially critical of a requirement for European airlines to use sustainable aviation fuel as part of their mix, while carriers based in the Gulf are able to avoid using such fuels when connecting to Asia. 

Ryanair group chief executive Michael O’Leary recently said a requirement to pay for an emissions trading scheme — or ETS — on flights within the EU generated “gross distortions” that disadvantage European holiday destinations. 

“A family of four going from Brussels to Spain [and then] to the Canaries pay ETS at the rate of about €120 for four people, whereas if they go to neighbouring Morocco . . . that package is €120 cheaper,” he told a press conference this month.

The sector has also been locked in a battle with regulators over rules that dictate how many bags passengers can take on board a plane before paying extra. A Spanish ruling that passengers be allowed to take two bags was struck down earlier this month.

Airlines have argued that allowing passengers to pay extra for additional bags helps keep overall ticket prices lower. 

“You cannot have two bags [for every passenger], it’s just impossible,” Váradi, who co-founded Wizz Air in 2003, said. “I do not know who the people are who come up with this idea. It’s just impossible, you can’t do it.”

Wizz, which launched as a Hungarian rival to Ryanair and now flies to 200 airports in 55 counties, has suffered setbacks that have pushed its shares down by a fifth this year.

These include the grounding of its aircraft over Pratt & Whitney engines, and pulling out of its Abu Dhabi partnership that it had hoped to use to tap into the Asian market. 

As a result, Váradi said the airline’s future growth would now come from within Europe.