Wizz Air quit Gulf after Abu Dhabi went back on deal, boss says

Telegraph

5 hours ago

Wizz Air's decision to quit the Middle East was triggered by a row with its Abu Dhabi government partner over alleged favouritism shown to the Gulf state's airline, its chief executive has said.
The budget airline last week suspended all flights from its Abu Dhabi hub, blaming the 'hot and harsh' climate, as high temperatures and sand particles degraded its engines.
But Jozsef Varadi, chief executive of Wizz Air, told The Telegraph that the move was also driven by curbs imposed on its local division by the Abu Dhabi authorities.
These included a refusal to let Wizz Air Abu Dhabi – a joint venture between Abu Dhabi and the airline – fly to India and Pakistan as previously agreed, despite the two countries having granted it access rights.
Mr Varadi said the move was probably designed bolster Abu Dhabi's airline, Etihad, which is owned by the Gulf state.
'Six years ago, Abu Dhabi was booming and the whole system was supportive of bringing in an ultra-low-cost carrier,' he said.
'Everyone was contributing, without any discrimination between the home airlines. But that changed and it became a case of Etihad first, with everyone else subordinated.
'That is not what we agreed when we made a commitment to invest in Abu Dhabi and it's not a game we're prepared to play. We said at the beginning that we would not be coming to be a second-class citizen.'
Wizz last week said it was abandoning the joint venture, which was established with the Abu Dhabi's sovereign wealth fund ADQ in 2019.
Mr Varadi said the launch of flights to the Indian subcontinent had always been the venture's ultimate goal, with the region accounting for 60pc of the travel market from Abu Dhabi.
He said: 'We all had an understanding that we would be accessing markets like India and Pakistan. It was specifically mentioned in our investment memorandum.
'We got designated by Abu Dhabi and we started working with India and Pakistan and both of them approved our designation.
'But at that point Abu Dhabi changed its mind and they decided to remove our designation and hand that over to Etihad. So we were excluded from more than half of the market. That is not acceptable and not how we do business.'
Mr Varadi said the change in attitude coincided with the deepening of government efforts to focus Etihad more on local travel needs, rather than have it compete in global markets with Emirates and Qatar Airways.
Etihad slashed its aircraft order book and cut long-haul routes as a result of the rethink, and in October 2022 came under the ownership of ADQ, which also held a 51pc stake in Wizz Air Abu Dhabi, to Wizz's 49pc.
'People don't like flying over war zones'
The chief executive said the escalating conflict in the Gulf has also influenced the decision to quit the region, with a quarter of Wizz flights forced to divert in the past 12 months, increasing costs and putting off travellers.
He said: 'Demand is a lot weaker than before. People don't like flying over rockets and war zones, and this has become a regional conflict. It's no longer local.'
Wear and tear issues with the Pratt & Whitney engines on Wizz's jets, which grounded 20pc of the fleet, were a further factor, being more acute in the 'hot and harsh' environment of Abu Dhabi and nearby destinations such as Saudi Arabia.
He said: 'The engines were degrading three times faster, so it became incredibly punitive from an engine lifetime and cost perspective.'
Mr Varadi said Wizz, which is due to provide an earnings update on Thursday, will delay orders from Airbus as it falls back on core European markets, where it competes with Ryanair and EasyJet. While based in Budapest Wizz is listed in London and has major bases at Gatwick and Luton.