GEOFF PERCIVAL: Scandinavian Airlines to set up base in Ireland

Scandinavian Airlines (Sas) is to use Ireland as a launch pad from which to expand its services aimed at leisure travel passengers, in a bid to compete more directly with rival Norwegian Air.

Sas yesterday announced it plans to register planes in Ireland and set up bases in London and Spain to serve more leisure travellers at a lower cost to compete with expanding discount carriers including Norwegian Air Shuttle.

Sas is seeking an air-operator certificate in Ireland with sites in London and Spain that will initially provide a small number of departures to complement existing services starting next winter, the Stockholm-based company said.

The Irish unit will hire locally, while its cost advantage is more likely to come from lower social security expenses and taxes rather than from reduced wages, spokesman Fredrik Henriksson said.

Services will begin with “a handful of aircraft,” with the same livery and service offering as Sas’s existing fleet.

Elsewhere, Ryanair yesterday announced an expansion of its services between mainland Europe and Israel.

The airline last week said it is close to signing a transatlantic connectivity deal with either Norwegian or Aer Lingus in the next few months. It is adding seven new routes from various European destinations to Tel Aviv and eight new routes to Eilat.

Meanwhile, Wizz Air has cut its full-year profit estimate, citing pressure on fares in the industry. However, it said it would press ahead with plans to expand aggressively to build market share.

Wizz Air’s London-listed shares fell more than 9%, yesterday, their steepest decline since the aftermath of last June’s Brexit vote.

The group has felt the effects of pricing pressures after larger low-cost rivals Ryanair and Easyjet put more seats on to the market to take advantage of previously low oil prices and to try to capture market share.

Budapest-based Wizz lowered its underlying net profit guidance yesterday to a range of €225m to €235m for the year to the end of March, from a previous forecast of €245m to €255m.

Underlying net profit for the third quarter was €13.5m, a year-on-year decrease of 21.5%, which Goodbody Stockbrokers described as disappointing. 

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