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Poland’s OLT Express plans international expansion

7-May-2012

Poland’s OLT Express is gearing up for international expansion with a range of new destinations to be launched from winter 2012/13, tripling its network. The airline will also be almost doubling its fleet in order to serve its new Western European network. The international expansion will be aimed at taking market share from LOT Polish Airlines from secondary cities in Poland which have traditionally been served through LOT’s Warsaw hub.

OLT Express has been in operation since 2001, originally under the name of Jet Air. From winter 2005/06 until mid-2007 the airline operated domestic services for LOT Polish Airlines on low density routes. JetAir’s regional feeder partnership with LOT ended in 2007 and the carrier began to operate services under its own name. OLT Express’ sister carrier, OLT Express Poland, was formerly a Polish charter operator which commenced operations in Apr-2011, serving regional Polish destinations on behalf of tour operators.

From Oct-2010 until May-2011 Jet Air operated on behalf of Ostfriesische Lufttransport (OLT Express Germany) from Bremen to Nuremburg and Brussels. In late 2011 Polish building society Amber Gold took over OLT Express Germany, Jet Air and Yes Airways. In Feb-2012 Jet Air was relaunched as OLT Express while Yes Airways was relaunched as OLT Express Poland. Under Amber Gold ownership, OLT Express and OLT Express Germany will continue to operate scheduled services while OLT Express Poland will continue to operate as a charter carrier. In Apr-2012 Amber Gold also took over part of the insolvent Cirrus Airlines, based in Saarbrücken, and was merged into OLT Express Germany.

OLT Express officially launched in mid Feb-2012 and began operating 10 domestic routes in Poland from 02-Apr-2012. This will expand to 23 domestic routes by early Jul-2012. The airline is based in Gdansk, though Warsaw will become its second main hub with its upcoming international expansion. Lodz, Rzeszów and Bydgoszcz will become secondary hubs.

OLT Express plans for significant fleet increase in 2012

In Apr-2012 the airline announced large expansion plans for its network from 29-Oct-2012 for the winter 2012/13 schedule. These plans included the launch of 17 new routes from Warsaw; 13 routes from Gdansk, five routes from Lodz; seven routes from Rzeszow and 12 routes from Bydgoszcz. In total, these 54 routes will add 182 frequencies to the carrier’s operations, effectively tripling its network size.

New Warsaw routes for OLT Express from 29-Oct-2012

Route

Frequency

Competitors*

WAW-AMS

Daily

LOT Polish Airlines / KLM

WAW-BRU

Daily

LOT Polish Airlines / Brussels Airlines  

WAW-CGN

Daily

 

WAW-HHN

Three times weekly

LOT Polish Airlines / Lufthansa to FRA

WAW-GOT

Three times weekly

 

WAW-HAM

Daily

LOT Polish Airlines

WAW-LGW

Daily

LOT Polish Airlines, British Airways to LHR / Ryanair to STN (summer 2012)

WAW-LYS

Three times weekly

 

WAW-FMM

Daily

LOT Polish Airlines, Lufthansa to MUC

WAW-BGY

Three times weekly

LOT, Air One Smart Carrier to MXP

WAW-FMO

Twice weekly

 

WAW-ORY

Three times weekly

LOT Polish Airlines, Air France to CDG

WAW-FCO

Three times weekly

LOT Polish Airlines / Alitalia

WAW-SCN

Twice weekly

 

WAW-STR

Daily

 

WAW-VCE

Twice weekly

Air One Smart Carrier

WAW-VRN

Twice weekly

 

Wizz Air and Ryanair will also be competing on some of OLT Express’ new Warsaw routes but from the new Warsaw Modlin Airport, which is to open in Jul-2012. Wizz Air Warsaw routes which will be in competition with OLT Express will be to Paris Beauvais Tillé, Brussels South Charleroi, Gothenburg City, London-Luton, Milan-Bergamo and Rome Fiumicino. Meanwhile, Ryanair will operate from Warsaw Modlin to Brussels South Charleroi, Frankfurt Hahn, London Stansted, Milan Bergamo and Rome Ciampino among other destinations (which at this stage are not in competition with OLT Express).

New Gdansk routes for OLT Express from 29-Oct-2012

Route

Frequency

Competitors*

GDN-AMS

Daily

 

GDN-BRU

Daily

 

GDN-CGN

Daily

Wizz Air

GDN-HHN

Three times weekly

LOT Polish Airlines, Lufthansa to FRA

GDN-HAM

Daily

Wizz Air

GDN-LGW

Daily

Wizz Air to LTN / Ryanair to STN

GDN-MRS

Twice weekly

 

GDN-FMM

Daily

Lufthansa to MUC

GDN-ORY

Twice weekly

Wizz Air to BVA

GDN-KEF

Weekly

 

GDN-FCO

Three times weekly

Wizz Air

GDN-VCE

Twice weekly

 

GDN-VRN

Twice weekly

 

New Lodz routes for OLT Express from 29-Oct-2012

Route

Frequency

Competitors*

LCJ-BCN

Weekly

 

LCJ-EDI

Weekly

Ryanair

LCJ-HHN

Twice weekly

 

LCJ-ORY

Twice weekly

 

LCJ-FCO

Twice weekly

 

New Rzeszow routes for OLT Express from 29-Oct-2012

Route

Frequency

Competitors

RZE-AMS

Three times weekly

 

RZE-DTM

Three times weekly

 

RZE-HAM

Twice weekly

 

RZE-FMM

Twice weekly

 

RZE-OSL

Twice weekly

 

RZE-ORY

Three times weekly

 

RZE-FCO

Three times weekly

 

New Bydgoszcz routes for OLT Express from 29-Oct-2012

Route

Frequency

Competitors*

BZG-LGW

Twice weekly

Ryanair to STN

BZG-NCL

Twice weekly

 

BZG-EDI

Twice weekly

 

BZG-LPL

Twice weekly

 

BZG-BRS

Twice weekly

 

BZG-ORK

Weekly

 

BZG-HHN

Three times weekly

 

BZG-DTM

Twice weekly

 

BZG-FMM

Twice weekly

 

BZG-FCO

Twice weekly

 

BZG-BGY

Twice weekly

 

BZG-ORY

Twice weekly

 

Focus on Western Europe

Aside from OLT Express’ domestic services in Poland, the entirety of its international network announced thus far is for Western European destinations. OLT Express Germany’s network is also solely focused on Western Europe, with a network connecting Germany, Switzerland and Denmark. While the Polish carrier could expand further into Western Europe if it sees positive results, it could consider a move into Eastern Europe. If OLT Express was to create more of a hub operation in either Warsaw or Gdansk, it would be in a prime position, considering Poland’s location, to carry connecting traffic from Western to Eastern Europe and vice versa, strengthening its operation.

While operating to a number of secondary airports, including Frankfurt Hahn, Munich Memmingen, Milan Bergamo and Paris Orly, the majority of OLT Express’ services will operate into primary airports where it will face competition from both full service carriers including LOT Polish Airlines and Lufthansa and low-cost carriers including Ryanair and Wizz Air.

In Feb-2012 OLT Express board member Rafał Orłowski stated the airline “does not aim at biting into LOT’s or Eurolot’s customer base, but wants to attract people, who would otherwise have used rail or road transport”. Mr Orłowski also said part of the airline’s strategy is to offer direct links from secondary Polish cities rather than have all traffic fed through Warsaw which traditionally has been the case.

But OLT Express is reportedly planning to adjust its domestic network as it nears the launch of its summer schedule in order to increase connectivity between domestic and international services. Gdansk is expected to see 10% of its traffic from connecting passengers. LOT Polish Airlines feeds the majority of its international traffic via its main Warsaw hub – from where it operates to 60 destinations across Europe, Asia and North America.

Aside from OLT Express’ growing Warsaw hub, from where it will offer 17 international destinations, the carrier will be offering 13 international services from Gdansk compared to LOT’s three. From OLT Express’ secondary hubs in Rzeszow, Bydgoszcz and Lodz, LOT only offers services to Warsaw from Rzeszow and Bydgoszcz while it does not operate into Lodz at all.

LOT’s regional subsidiary, EuroLOT, which currently only operates a limited domestic network, will not be able to fend off OLT Express in its current state. A move by LOT to develop EuroLOT into a small international carrier, operating point-to-point European routes from secondary cities, may be an option for LOT in order to retain some market share from these smaller areas. However, this may not be viable unless EuroLOT’s fleet, which now consists of turboprop aircraft, is upgraded.

Fleet to almost double by winter 2012

OLT Express currently operates a fleet of 15 aircraft consisting of two ATR 42-300s, five ATR 72-200s, two A319s and six A320s. By the start of the winter schedule for 2012, the airline will take delivery of six more A319s and five more A320s, almost doubling its fleet to 26 aircraft.

According to PlaneSpotters.net, the airline received one A320 in Mar-2012, followed by four more in Apr-2012. These aircraft were all second hand with previous operators including Air Malta, Koral Blue, Air Arabia, airberlin and NIKI. The airline is also reportedly due to receive an A319 from easyJet.

The A319 and A320 aircraft will be used to operate the airline’s international network, the A319s configured with 156 seats while the A320s will be configured with 180 seats. Using just the A319 seating capacity, with 182 additional frequencies operated from winter 2012/13, the airline will offer at least 28,000 seats per week, internationally, from Poland. Based on current capacity data, this would place OLT Express as the fifth largest carrier, internationally, from Poland and the second largest Polish international carrier, following LOT Polish Airlines. As stated on OLT Express’ website, its charter operation, OLT Express Poland, operates three A320 aircraft.

Top 10 international airlines in Poland (seats per week): 30-Apr-2012 to 06-Apr-2012

Rank

Airline

Total seats

1

FR

Ryanair

115,668

2

W6

Wizz Air

111,240

3

LO

LOT Polish Airlines

97,925

4

LH

Lufthansa

42,914

5

DY

Norwegian Air Shuttle

13,528

6

U2

easyJet

9414

7

SK

SAS

7712

8

AF

Air France

7282

9

KL

KLM Royal Dutch Airlines

5880

10

SU

Aeroflot

5038

While offering a full service product, OLT Express has some elements of a low-cost operation. OLT Express offers traditional full service carrier amenities inclusive in all fares such as full meal and beverage services and checked baggage. However the airline’s recently launched network resembles a low-cost operation with point-to-point services from secondary Polish cities. Also, despite offering business fares, it appears the airline’s aircraft are configured in a single-class layout with the airline’s A320 aircraft to be configured with 180 seats.

OLT Express will be shaking up Poland’s aviation industry from winter 2012/13, with full service carrier LOT Polish Airlines and LCCs Ryanair and Wizz Air to be most affected by its plans. With both an extensive domestic Polish network and a growing international network, OLT Express is sure to gain a larger share of the Polish market, at the expense of both full service and LCCs.

However, at least for now, the Eastern European networks of LOT and Wizz will remain safe from the rising Polish airline. Considering the large number of routes already announced and its rapidly growing fleet, an announcement of a move by OLT Express into the Eastern European market could be imminent. To combat this LOT Polish Airlines in particular will need to reconsider its options.


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